InfoSAWIT, SAMARINDA – The government of East Kalimantan Province (Kaltim) is leveraging the palm oil sector as a new economic pillar for the region amidst declining mining activities. Through the Plantation Office, the provincial government is preparing a strategy to attract more investors, both domestic and foreign.
"The government is assessing measures to bring investors into the palm oil industry, especially in East Kalimantan. The hope is that this program can continue to run," said the Acting Head of the Kaltim Plantation Office, Andi M. Siddik, as quoted by InfoSAWIT from Kaltimpost, Wednesday (20/8/2025).
Plantation Office data shows that Kaltim has approximately 220 palm oil companies with 110 processing mills. East Kutai is the area with the largest palm oil plantations, reaching 400 thousand hectares, followed by Paser and North Penajam Paser Regencies. "These three areas are indeed the main centers for palm oil development in East Kalimantan," Andi explained.
In addition to relying on large corporations, the provincial government is also preparing a major project to develop smallholder palm oil. This program aims for farmers to not only be suppliers but also to manage their businesses and even own their own mills. "The hope is that farmers can become independent and elevate their status," he added.
Despite its vast potential, the downstreaming of the palm oil industry in Kaltim is considered slow. One of the obstacles is the dominance of company ownership, with most owners based on Java. "The company owners are mostly in Java, so the development of further industries in Kaltim has not been maximized," he revealed.
To strengthen competitiveness, the provincial government is encouraging synergy among palm oil companies through membership in the Indonesian Palm Oil Association (GAPKI). Currently, only about 77 of the 220 companies in Kaltim are members. "The governor's hope is that more companies will join GAPKI so that their performance can be more focused," said Andi.
With this strategy, the Kaltim provincial government is optimistic that it can make the region a palm oil industry hub that is not only strong in the upstream sector but also advanced in downstream processing and attractive to world-class investment. (T2)
