Oil Palm to Dominate Plantation Investment for the Next 5 Years

  For the plantation itself, the investment target for the next 5 years will reach Rp 1.567, 1 trillion. The details are, oil palm (oil palm-cattle-corn integration) 70 percent, sugarcane 26 percent, tobacco 1 percent and others (rubber, coffee, cocoa, spices) 3 percent.

“It is still dominated by oil palm, followed by sugarcane with the development of 15 Sugar Mills (PG) that will be directed outside Java Island with a total value of Rp 45 trillion,” said the Director General of Plantations, Ministry of Agriculture, Kasdi Subagyono, in an official statement received by InfoSAWIT, Thursday (19/9/2019).

Investment in the plantation sub-sector, said Kasdi, is indeed directed to its downstream industry because its value will be much higher than just an upstream. “It depends on where investors can afford. Whether to the upstream, especially seeds or downstream. But from our side (Dirjenbun), we will direct it to the downstream because the results are much higher than just the upstream,” explained Kasdi.

Kasdi admitted that investment is still small compared to exports. This is due to policy problems (permits). In order for the investment process in Indonesia to run smoothly, several policies are cut or merged, so that the permitting process is much easier, without being complicated. “Actually, the requirements are not difficult, having capital and commitment, can run immediately," he said.

Meanwhile, referring to data from BPS, it indicates that the plantation's contribution is 97.4 percent to the export volume of the agricultural sector and contributes 96.9 percent to the export value of the agricultural sector. It is only natural if the plantation sub-sector becomes the largest contributor of foreign exchange from the agricultural sector.

In order for the export value of plantations to increase, it is necessary to accelerate investment. Data from the Investment Coordinating Board (BKPM), investment in agriculture during 2009-2013 was still low, which was only Rp 96.1 trillion. Then in the period 2014-2018 it increased by 150.7 percent or Rp 240.8 trillion.

“Based on our data, for the time being there are 514 potential investors who are interested in investing in the plantation sub-sector. The value is quite high, which is around Rp 313 trillion,” he said, during the Plantation Sector Investment Acceleration, Get-together and Consolidation event in Jakarta. (T2)

Source: InfoSawit.com