Transforming Palm Oil to Multiply Its Economic Value Dozens of Times
The government is initiating a new chapter in the national downstreaming programme. Thirteen strategic projects with a total investment value of Rp116 trillion, backed by consolidated financing through the Badan Pengelola Investasi Daya Anagata Nusantara (Danantara), are officially entering the construction phase this year.
In the plantation sector, the implementation of the second stage of downstreaming is becoming evident through the construction of palm oil processing facilities in the Sei Mangkei Special Economic Zone (KEK) in Simalungun Regency, North Sumatra.
Technically, the facilities being built in Sei Mangkei encompass food and energy industries within a single integrated zone. This project is being undertaken by the sub-holding PTPN III (Perseo) and PTPN IV PalmCo, as part of the national palm oil industry transformation.
Director of Business at PTPN III (Persero), Ryanto Wisnuardhy, stated that developing downstream palm oil industries is a crucial step to reduce dependence on imported energy, particularly diesel fuel.
“Our diesel needs remain very substantial. Through palm-based biodiesel, we aim to strengthen domestic supply. These needs are expected to increase with the planned implementation of the B50 biodiesel blend programme in the near future,” he explained.
Meanwhile, the President Director of PTPN IV PalmCo, Jatmiko K Santosa, explained that the oleofood factory will produce margarine and shortening with a capacity of 35,000 tonnes per year, as well as around 25,000 tonnes per year of cocoa butter substitutes.
In addition, a biodiesel factory with a capacity of 450,000 tonnes per year is also under construction and is targeted to commence commercial operations in 2028. According to him, processing palm products domestically can significantly increase added value compared to selling raw materials.
“If processed, the economic value can increase up to dozens of times. Downstreaming not only boosts production but also transforms the economic structure from upstream to a more modern downstream. This certainly opens up employment opportunities,” he said.