Riau to develop Indonesia’s first crude palm oil downstream industry
With a plantation area of 1.6 million hectares and production capacity of 5.1 million tons per year, Indonesia’s Ministry of Industry has identified Riau as an ideal place to develop the country’s first downstream industry cluster for the palm oil industry.
It also expects the region to take a central role in making Indonesia a leading producer of palm oil-derived products. According to Heriyan Saleh, Head of the Riau province's trade and industry agency, the availability of infrastructure is also another reason why the province is ideal for cluster development.
Together with the Bogor-based Institute of Agriculture (IPB), the Riau regional government had organised a workshop to with the aim of coming up with incentives, infrastructure, and support measures needed to develop such an industry.
Indonesia has about seven million hectares of palm plantations, mostly in Sumatra and Kalimantan, and total production of about 18 million tons per year, surpassing Malaysia, which produces more than 15 million tons.
But unlike Malaysia, Indonesia's palm oil exports are about 65 per cent in the form of crude palm oil (CPO), and only 35 per cent as processed products. On the other hand, Malaysia currently exports about 30 per cent of its palm oil production in the form of CPO and the other 70 per cent in the form of intermediary and finished products.
The intermediary products include fatty acid, fatty alcohol, glycerine, and methyl ether, while the finished products include surfactant, pharmaceutical and cosmetic products, food products and soap.
It also expects the region to take a central role in making Indonesia a leading producer of palm oil-derived products. According to Heriyan Saleh, Head of the Riau province's trade and industry agency, the availability of infrastructure is also another reason why the province is ideal for cluster development.
Together with the Bogor-based Institute of Agriculture (IPB), the Riau regional government had organised a workshop to with the aim of coming up with incentives, infrastructure, and support measures needed to develop such an industry.
Indonesia has about seven million hectares of palm plantations, mostly in Sumatra and Kalimantan, and total production of about 18 million tons per year, surpassing Malaysia, which produces more than 15 million tons.
But unlike Malaysia, Indonesia's palm oil exports are about 65 per cent in the form of crude palm oil (CPO), and only 35 per cent as processed products. On the other hand, Malaysia currently exports about 30 per cent of its palm oil production in the form of CPO and the other 70 per cent in the form of intermediary and finished products.
The intermediary products include fatty acid, fatty alcohol, glycerine, and methyl ether, while the finished products include surfactant, pharmaceutical and cosmetic products, food products and soap.