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Five Advantages to Palm Oil Downstream Development in Indonesia



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Five Advantages to Palm Oil Downstream Development in Indonesia

InfoSAWIT, JAKARTA – Head of Sub Directorate of Non – Food Plantation Product Industry, Ministry of Industry, Lila Harsya Bahtiar said that palm oil industries are labor intensive industries that hire 4,2 million direct workers and about 12 million indirect workers both in upstream and downstream sectors.

The industries can nationally support energy security. Biodiesel mandatory program 30% or known as B30 had been used for about 8,6 million kiloliters in 2020. The industries also potentially produced plants from palm oil mill effluent (POME) from 821 mills within 38.908 tons of fresh fruit bunch (FFB) per hour capacity or equal with 1.828 megawatt (MW). “The realization until now reaches 23,5 MW from mills within 500 tons FFB/hour capacity,” she said.

Lila also mentioned, according to national palm oil downstream roadmap, Indonesia is the number one palm oil producer and downstream product consumer in the globe that could be crude palm oil (CPO) price setter globally.

By having downstream industrial development, Lila continued, at least, there are five advantages to get. The first is, it will mobilize productive economy by industrialization to realize import substitution and export promotion/exchange. The second is, it will make good trade balance in our country and better exchange rate of rupiah.

The third, it will realize food and energy sovereignty through palm oil fuel which derives from economic security nationally. The fourth is it will become the motor of regional development in palm oil plantation centers and in national scale, namely in the outermost, lagging, and remote areas,

“The fifth, it can control emission through fuel usage and environmental, sustainable industries,” she said.

For there are many palm oil downstream product consumers globally, they could realize the aspect of sustainability which means, sustainable palm oil products will become value determiners to win the markets.

Ministry of Trade Indonesian Republic is now arranging Indonesian Sustainable Palm Oil (ISPO) Supply Chain Palm Oil Downstream Product or Rantai Pasok – Industri Hilir Kelapa Sawit, in the form of draft of Minister’s Regulation that will deal with government in the sectors as ISPO regulation pair in the upstream sector according to Regulation of Minister of Agriculture No. 38 / 2020 to regulate sustainable palm oil from upstream to downstream sectors. (T2)

Source: InfoSAWIT, September 2021