KL firms get nod to develop oil palm estates

KL firms get nod to develop oil palm estates

JAKARTA (JP): Four Malaysian companies have been given the
green light to develop oil palm plantations in the country, a
minister said yesterday.

State Minister of Investment Sanyoto Sastrowardoyo said
yesterday the companies had met the investment criteria for the
oil palm plantation sector. He declined to give details about the
companies.

He said they were the first group of foreign companies allowed
to open oil palm plantations in the country since the government
opened up the sector to foreign investors recently.

This, he added, was because companies were required to fulfill
the various criteria.

"This includes the spatial planning and land feasibility
criteria," he told media following a meeting with Coordinating
Minister for Economy, Finance and Industry Ginandjar
Kartasasmita.

He said the land slope must be not more than 25 percent;
annual rainfall between 1,750 mm and 4,000 mm; and temperature
between 24 degrees Celsius and 29 degrees Celsius.

Last year, 10 foreign companies were reportedly outraged by
the government's decision to freeze new licensing to foreign
investment in the country's oil palm plantation sector.

The companies, which were said to have made initial
investment, planned to open a total of two million hectares of
plantations.

Many considered the halt in new licensing was based on the
country's ambition to overtake Malaysia as the biggest crude palm
oil producer in the world.

But under the economic reform program sponsored by the
International Monetary Fund, Indonesia has been forced to once
again open its oil palm plantation sector to foreign investors.

As of January last year, the total foreign investment in the
country's palm oil plantation sector was US$3.3 billion on 2.1
million hectares of land. Of this, 1.5 million hectares was
under Malaysian companies.

Local investors accounted for 6.6 million hectares. (rei)