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)