InfoSAWIT, JAKARTA – Former Minister of Industry, Saleh Husin focused on palm oil downstream industries as integral part of palm oil industrial development which becoming the key to escalate economy and welfare of the people of Indonesia.
In his doctoral promotion open senate session at Makara Art Center, University of Indonesia (UI) Depok, West Java, last Saturday, Saleh Husin who now gets his doctoral degree from Sekolah Kajian Strategik dan Global UI told that having downstream industries is a must.
“It would spend many investments, need efficient production, and optimally manage the exports,” he said, as InfoSAWIT quoted from Antara, Monday (26/2/2024).
In his dissertation, simulation done showed that by having decreasing upstream sectors up to three percent, and having increasing downstream exports up to five percent, the revenue of Indonesia could be increasing US$ 7 billion per year, and gross domestic products would escalate as the indicator of increasing economy.
Downstream industries would make palm oil as direct material for consumers’ goods, such as, cosmetics and soap that other vegetable oils could not substitute. Saleh also emphasized the unique characteristic of palm oil makes it easier to be applied for other derivative products.
Besides, the plantations needed to develop palm oil are relatively narrow and the production costs could be cheaper than other vegetable oils.
Having downstream industries could escalate independent smallholders’ plantation productivity which is now much less than the big companies’ productivity or about 2 - 3 tons per hectare per year.
"Palm oil needs for industries made standard palm oil price get escalated. It forces the smallholders to escalate their plantation productivity,” Husin said.
Having downstream industries would reinforce Indonesia, not only as the biggest palm oil producer in the world but also would weaken palm oil buyers that dominated the international level – trade for all these years.
It means, having downstream industries should be the strategy to enable Indonesia reduce export dependence to other palm oil buyers without reducing the production in national scale. (T2)
