InfoSAWIT, JAKARTA – Over the past two decades, palm oil has remained a cornerstone of Indonesia’s economy. As a strategic commodity, palm oil not only fulfills demands for food and non-food products but also serves as a renewable energy source and a key contributor to foreign exchange earnings through high-value-added exports.
Director General of Agro Industry at the Ministry of Industry, Putu Juli Ardika, highlighted the success of Indonesia’s palm oil downstream program, measured by two key indicators: the growing variety of downstream products and the improved ratio of raw material to processed product exports.
“In 2010, there were only 54 types of downstream palm oil products. By 2023, this number surged to 193. Moreover, the export ratio of raw materials to processed products shifted dramatically from 40:60 to 7:93 in the same period,” Putu explained during a seminar in Jakarta on Thursday (21/11/2024).
The palm oil processing industry has had a significant impact, creating jobs for 17 million people directly and indirectly, contributing 3.5% to the national GDP, and accounting for 11.6% of non-oil and gas exports. In 2023, palm oil exports reached a value of IDR 450 trillion, with the sector projected to generate IDR 775 trillion in 2024.
“This industry has also driven economic growth beyond Java, with development in areas such as Sei Mangkei (North Sumatra), Tarjun (South Kalimantan), and Bitung (North Sulawesi),” added Putu.
Despite its progress, the palm oil sector faces challenges such as declining plantation productivity due to crop diseases, climate change, and the need for replanting. Additionally, downstream processing still heavily relies on crude palm oil (CPO) as its primary raw material.
To address these issues, the Ministry of Industry has prioritized three strategic steps, Ensuring Raw Material Supply – Securing sufficient CPO availability for downstream processing, Technology Injection – Enhancing processing efficiency and sustainability through innovative technologies. And Expanding Sustainability Practices – Promoting eco-friendly technologies such as the Steamless-POMELess Palm Oil Technology (SPPOT), which improves energy efficiency, reduces carbon emissions, and minimizes liquid waste. This technology also enables modular, small-scale plants that farmers can own under a Build-Operate-Transfer (BOT) scheme.
The Ministry is optimistic that these efforts will support the “Golden Indonesia Palm Oil Vision 2045.” By 2029, the goal is to produce 240 types of downstream products and achieve an economic value of IDR 1,146 trillion.
“Sustainable downstream development can enhance global competitiveness while improving community welfare,” concluded Putu. (T2)
