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INDONESIAN PALM OIL DOWNSTREAM INDUSTRY Original Text & Photograph By : InfoSAWIT Magazine
www.infosawit.com Komplek Bukit Permai, Jl. Anjasmoro G2 No. 1 Cibubur, Jakarta Timur - Indonesia
2 2011,
Copyright protected by laws Prohibited quote or reproduce all or part of the contents of this book without written permission publisher
TABLE OF CONTENTS
4 Greetings Ministry of Industry 7 Chapter I, Indonesian Oil Palm Plantation Industry a. Indonesia Oil Palm Plantations b. The Spread of Oil Palm Plantations c. Productivity d. Indonesian Palm Oil Production e. Palm Oil Mills f. CPO Exports per Country and Its Derivatives 11 Chapter II, Palm Oil Downstream Industry a. Refinery b. Oleochemicals c. Biodiesel 3 15 Chapter III, Industrial Area a. Sei Mangkei b. Dumai, Riau c. Maloy Chapter IV, 21 Government Support
MESSAGE OF MINISTER OF INDUSTRY OF THE REPUBLIC OF INDONESIA on INVESTMENT PROMOTION FOR NATIONAL PALM-OIL BASED INDUSTRY YEAR 2011
Indonesia is now the worlds largest Crude Palm Oil (CPO) producer with an estimated production of 20 million tons in 2010 and it will keep growing due to the expansion of oil palm plantation and land productivity improvement. From year to year, oil palm plantation area has increased by 11,8% with a total range of 8,1 million ha in 2010 and CPO production level has also increased by 12% per year in the last 10 years. However, it should be noted that the CPO exported is in raw form which means that the added value of production such as oleo food and oleo chemical is still enjoyed by other countries. With the vast potential availability of raw materials such as CPO and CKPO (Crude Palm Kernel Oil), Indonesia is very likely to be a key player in the CPO derivatives industry (oleo food and oleo chemical). The growth in oleo food and oleo chemical industry will be able to increase the national economic dynamics which leads to increase in peoples welfare. The effort to increase the CPO downstream industries is initiated by investment promotion so that it will draw Foreign Direct Investment for the development of the industry. The aim of the investment promotion itself is to promote the industry potential, filtering investment potential and expand the marketing network of Indonesian oil palm derivative products. This is very important in order to bring Indonesian CPO products to the international market network and increase foreign capital inflow to Indonesia. The Indonesian government has designed several programs concerning oil palm derivative industries to integrate the chain between the downstream and upstream industries which have the potential to increase the competitiveness of oleo food and oleo chemical industries in the global stage. Some clusters which are ready to be offered for potential investors are Sei Mangkei North Sumatera, Dumai and Kuala Enok Riau, and Maloy East Kalimantan. In the future, the location of oil palm derivative industries will expand to West Kalimantan, Central Kalimantan and Papua. I welcome and support the 2011 National Oil Palm Industry Promotion Event. With this event, I hope that Indonesian CPO products will be more well-known internationally so that in the future we can expect more investments dedicated to the development of oleo food and oleo chemical products. I hope that this event will bring out valuable contribution to the development of palm oil based industries in Indonesia. MINISTER OF INDUSTRY
MOHAMAD S HIDAYAT
Oil palm plantation from year to year increase, was recorded in 2009, the Indonesian oil palm plantation area reached 7.9 million ha with an average annual growth of 11.8%. In 2010, oil palm plantation area in the prediction of 8,1 million ha, which an ownership composition of 43% of farmers, country states 8,5% and the remaining 48,5% large private estates.
Source : Ministry of Agriculture Republic of Indonesia, Gapki, InfoSAWIT Data Center, 2011.
Explanation
2000 4,158,079
2001 4,713,435
2002 5,067,058
2003 5,283,557
2004 5,284,723
2005 5,453,817
2006 6,594,914
2007 6,766,836
2008 7,008,000
2009 7,900,000
2010* 8,100,000
Jambi : Plantations: 454,771 Ha CPO: 898,640 Ton North Sumatera : Plantations: 1,026,644 Ha CPO: 3,200,673 Ton
West Sumatera : Plantations: 305,871 Ha CPO: 839,640 Ton Papua : Plantations: 25,926 Ha CPO: 56,738 Ton
C. PRODUCTIVITY
Productivity of Indonesian CPO reached an average of 3 tons/ha/year, quite stable in 2009. Currently the government is working to improve the productivity of Indonesian CPO by applying best management practice in oil palm plantations, in addition to continue to produce oil seeds.
Indicator Productivity Unit Kg/Ha 2000 2,78 2001 2,84 2002 2,91 2003 3,05 2004 2,83 2005 2,93 2006 3,50 2007 2,99 2008 2,74 2009 2,94 2010* 2,98
Source : Ministry of Agriculture Republic of Indonesia, Gapki, InfoSAWIT Data Center, 2011.
*) Prediction
Indonesias CPO production during the last ten years continues to increase with growth of about 12% each years.
Source : Ministry of Agriculture Republic of Indonesia, InfoSAWIT Data Center, 2010.
*) Prediction
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9 9
5,500,000 5,000,000 4,500.000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 Bangladesh China European Union India Pakistan USA Others
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OLEIN
AMINO ACID
PFAD
Vit. A,E
CAROTEN
STEARIN
ICE CREAM
LIPASE
SOAP CHIP
FATTY ACID
COOKING OIL
SALAD OIL
SHORTENING
METIL ESTER
WASH SOAP
FAT POWDER
COSMETICS SHORTENING SOAP VEGETABLE GHEE VANASPATI COCOA BUTTER SUBSTITUTE (CBS)
SURFACTAN
ESTER ASAM LEMAK: PALMITAT/PROPAND STEARAT METIL ESTER SULFONAT OLEAT/GLYCOL PROPYLENE GLYCOL
METALIC SALT: OLEAT / Ba PALMITAT STEARAT / Ca, Zn STEARAT / Ca, Mg STEARAT / Al, Li OLEAT / Zn, Pb
POLYETHOXYLATE DERIVATIVES: PALMITAT/ETHYLENE PROPYLENE OXIDE STEARAT/ETHYLENE PROPYLENE OXIDE OLEIC ACID DIMER ETHYLENE PROPYLENE OXIDE
FATTY AMINES : SECONDARY C16 & C18 / ETHOXYLATED BETAIN C16 & C16 / ETHOXYLATED
OXYGENATED FATTY ACID / ESTER : EPOXY STEARIC / OCTANOL ESTER EPTHIO STEARIN MONO & POLYHYDRIC ALCOHOL ESTER
FATTY ALCOHOL C16 & C18 ALCOHOL / SULPHATED C16 & C18 ALCOHOL / ESTERIFIED WITH HIGHER SATURATED FATTY ACID C16 & C16 ALCOHOL / ETHOXYLATION MONOGLISERIDA ETHOXYLATION
FATTY ACID AMIDES : STEARAMIDE ALKANOLAMIDES SULPHATED ALCANOLAMIDE OF PALMITAT, STAERIC & OLEIC ACIDS OLEAMIDE
GLICEROL
FOOD EMILSIFIER
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B. OLEOCHEMICAL
Photo by: PT Smart Tbk.
A. REFINERIES
In addition to being the largest palm plantations in the world, Indonesia also continues to develop refined palm oil industry, one of whom oleochemical industry. Until recently, in Indonesia recorded nine basic oleochemicals manufacturer that produces fatty acids, fatty alcohols and glycerine. The installed capacity of fatty acids reach 986,000 tons/year, fatty alcohols reaching 490,000 tons/year, and glycerine to reach 141,700 tons/year.
Every year, cooking oil processed by refineries often requires raw materials of CPO around 4 until 5 million tons. Currently, Indonesia has 94 refineries spread across 19 provinces.
Item of Factories (Unit) 2 13 3 8 2 5 4 8 8 5 9 1 11 2 5 1 5 1 1 94
No 1 NAD
Province
1 PT Ecogreen (Medan & Batam) 2 PT Sumiasih, Bekasi 3 PT SOCI MAS, Medan 4 PT Flora Sawita Chemindo, Medan (Bakrie Group) 5 PT Musim Mas, Medan 6 PT Domba Mas, Kuala Tanjung (Bakrie Group) 7 Wilmar Group, Gresik 8 PT Nubika Jaya, Kisaran 9 PT Ciasadane Raya Chemical, Tangerang Total
2 North Sumatera 3 West Sumatera 4 Riau 5 Jambi 6 South Sumatera 7 Lampung 8 DKI Jakarta 9 West Java 10 Central Java 11 East Jawa 12 Banten 13 West Kalimantan 14 East Kalimantan 15 North Sulawesi 16 Central Sulawesi 17 South Sulawesi 18 Gorontalo 19 West Papua Total
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C.BIODIESEL
Fossil-based energy sources, are now experiencing environmental constraints and faced increasingly with the depletion of reserves, then the worlds find out for the alternative energy of fossil fuels, one of biodiesel from oil palm (fatty acid methyl esters). Facts palm biodiesel is significantly lower emissions than fossil oil. In Indonesia recorded there are about 20 manufacturers carrying palm biodiesel with a total installed capacity reached 3.07 million tons / year.
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In order to form a government of national industries to develop six economic corridors, including production centers, crops and granaries in the national energy corridor centered on Sumatra. While the production and processing of mining products focused on the corridor of Borneo. Then to the center of agricultural production and food processing, farming and fisheries enter the corridors of Sulawesi, North Maluku. Corridor of Java, Bali and Papua, each one for corridor industry supporters and national service, national tourism gateway and processing of natural resources. In order to smooth the distribution of the corridor system the government to develop industrial park to integrate between the upstream and downstream industries. Especially for developing region-based oleochemical industry, the government established thee strategic industrial area, namely Sei Mangkei in North Sumatra, Dumai in Riau and Maloy in East Kalimantan.
Sources : Ministry of Industry Republic of Indonesia, 2011
Summary Themes of The Economic Corridor Development Indonesia Centers of Production and Processing of Crops and Granaries
Central Production and Processing of Mining Products and Barns National Energy
Production Center and Food Processing for Agriculture, Plantation and the National Fisheries
Corridors of Sumatera
Production and Processing of the Abundant Natural Resources and Human Resources Prosperous
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making it easier in the process of distribution of raw materials. Until now POM in Sei Mangkei capable of producing until 569 tons of FFB/hour. While for the loading and unloading of CPO was centered in the Port of Kuala Tanjung as exports dock from industrial area Sei Mangkei. From 3 dock in that port, dock B and C are used as a place of delivery of the CPO. Recorded dock B has a length of 150 m, width 19 m and a depth of 6 M.LWS. Meanwhile, dock C has a length of 80 m, width 30 m and a depth of 11 M.LWS. Infrastructure currently has been built is the availability of water and electricity supply, road access to cluster industrial areas and near with the city.
Sources : PT Plantation Archipelago III, 2011.
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Road Infrastructure
Drainage
2013 - 2014
- industry based to other oleochemicals. - Develop oleochemical derivatives
2011 - 2012
Develop industry of Biodiesel, surfactant, betacarotene and fatty alcohol
2012 - 2013
Develop industry of Biodiesel, surfactant, beta-carotene and fatty alcohol
2009 - 2010
- Infrastructure Development . - Development of Oil Palm Mill Capacity 75 ton FFB/ hour .
2010 - 2011
- Build Two Biomassa Power Plant Each with Capacity. - 400 tpd kcp. - Build of Biogas Power Plant the capacity.
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1 District Upstream Rokan 2 District Downstream Rokan 3 Pekanbaru 4 Dumai City 5 District Bengkalis
6 District Siak 7 District Pelalawan 8 District Downstream Indragiri 9 District Upstream Indragiri 10 District Kuansing 11 District Kampar
Sources: Official Plantation of Riau, InfoSAWIT Data Center
Potential Land
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Infrastructure Support
The local government has also allocated 5,000 ha industry, but currently only used 300 ha by private parties. Port of Dumai can stop off at the boat weighing 20-30 thousand DWU and loading and unloading of CPO reached 6 million tons/ year. While Dumai Port Industrial Area has a depth of 14 m and accommodate ships weighing 50 thousand DWT
Investment in Riau :
Has a strategic position on the path Malacca. Dumai area of security is relatively good condition. Located in the coastal areas with relatively high economic growth (8.65% per year). Hinterland oil palm plantations in Riau area, based on statistics plantation 2007, a total of 1.612.382 ha, crude palm oil production of 5.119.270 tons, is produced from 130 POM with a capacity of 5.645 tons of FFB /hour. Center of the largest oil producer in Indonesia. As the exit and entrance, toward the center of business in the region and international. Has four industrial estates, one of them is private industry area which operates with an area of 1.000 ha of land, equipped with supporting facilities and infrastructure. Availability of ports and infrastructure (road, telephone and water supply). There was an area of 5.084 ha a separate industry from residential area.
PT Sari Dumai Sejati (CPO Refeneri capacity 2.500 tons day) and PKO plant expansion and a Special Port (Pelsus) PT Semen Padang (Pelsus) PT Ketam Putih (Pelra & Warehouse) PT Indo BioFuels (Biodiesel Factory) PT Pacific Inter Link (CPO Refineries Stamp 3.000 ton/day) PT Berlian Laju Tankers Tbk (Port and Container) PT Dumai Refinery PT BKR (Expansion)
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Catalyst Activity
Revised PP 62 by adding palm oil downstream industries that have not entered the list of specific industries that have facilities Tax Allowance.
Indicator
1 Rules
Target
2011 - 2012
PIC
Ministry of Economic, Ministry of Industry, Indonesia Investment Coordinating Board Indonesia Investment Coordinating Board, Ministry of Economic Ministry of Economic, Ministry of Finance
1 Rules
2011 - 2012
Volume
Land of 100 ha
Target
2011 2015
PIC
Ministry of Transportation, Indonesian Ports, Local Government
1 Rules
2011 - 2012
Port
PIC
Ministry of Industry, PT Plantation Archipelago III, Indonesia Investment Coordinating Board Ministry of Industry
150 km
Railway
2012 2015
Ministry of Transportation, PT. KAI, Investment Coordinating Board, Local Government Ministry of Public Works, Local Government
Cooperation between Integration of CPO processing industry industry CPO and and its derivates its derivatives with industrial / institutional support / related Diversification of oleochemical products of high added value through increased R&D Increase guarantee of supply CPO to domestic industries Investment Promotion Increasing in new investment and expansion of new businesses based CPO Fulfillment of domestic needs Increased investment in Indonesia
Road
Balikpapan Samarinda Maloy (2010 2014, @84 km) Muara Wahau Sp Perdau Maloy (2010 2014, @39,4 km) Access Port Road (2013) PLTA Lubuk Ambacang PLTU Peranap/Cerenti PLTU Pekanbaru Electric Transmission Dumai Electric Transmission Tj. Buton Electric Transmission Kuala Enok Other infrastructure : - Source of clean water - Power plant - Dam and raw water transmission - Public facilities, school of oil palm.
2011 2015
2011 2013
2011 2015
Power Plant
Ministry of Industry, Ministry of Agriculture Ministry of Industry, Indonesia Investment Coordinating Board, Local Government Ministry of Industry, Indonesia Investment Coordinating Board, The Indonesian Institute of Sciences
1 Package
2011 2015
Others
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Local Government, Ministry of Energy and Mineral Resources, Ministry of Public Works, Ministry of National Education
2013 2015
Targets Development Industry Processing CPO Medium-Term (2010 -2014) Ensure availability of raw materials CPO is quality. Increase and optimization of industrial capacity utilization. Development industry cluster. Formation CPO processing industrial cluster and its derivatives in Sumut and Riau. Development of port facilities storage tank and infrastructure development. Creation climate of business and investment that is conducive. Increase inter cooperation and intercluster. Increase of institutional functions. Development of a pilot project of indigenous sources of technology and licensing products deep processing.
Targets Development Industry Processing CPO Long-Term (2015 -2025) Expand the development of downstream products. Formation center of Exellence oleochemical industry. Market Control. Stabilization of industry insightful environmental. Integration of the industry of refined palm oil in East Kalimantan, West Kalimantan, Central Kalimantan, and Papua.
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In order to achieve the plan of CPO processing industry development, the government has compiled the main points of the action plan, which consists of the principal medium-term action plan (2010-2014) and long-term plan the principal action (2015-2025), as follows :
The principals plan of medium-term action (2010-2014) Increasing productivity of crops with the procurement of quality seeds, fertilizers and plantation revitalization. Increase the quality of palm oil with the implementation GAP. Capital assistance to farmers. Increase human resource capacity. Increase the quality of infrastructure to improve industrial performance. Export controls by imposing PE/BK for CPO and its derivatives. Modernization of production technology and machinery. Ease of access to bank credit. Socialization to the industrial cluster development and institution. Supporting Industries Formation of cluster development cooperation forum. Cooperation between the industry of CPO and its derivatives with industria/institutional support/related : Integration of CPO processing industry and its derivatives. CPO industrial development towards industrial derived surfactants, lubricants, and biodiesel. Cooperation between higher education research institutions and industry. Increase product quality in accordance SNI. Develop industrial machinery equipment and to develop industry auxiliary materials. Improving the quality of human resources through the preparation and implementation of the oil palm industry SKKNI chemical based. Encouraging the role of financial institutions in the provision of credit services and capital with low interest. Encourage the role of institutions in marketing investment promotion. Infrastructure development. Increasing coordination and synergy of related agencies in setting policy. Incentive policies to support industrial development. Elimination of regulations that hamper industrial development. Formation the body of authority development of investment. The Principals plan of long-term action (2015-2025) Diversification of oleochemical product of high value-added. Product innovation and technology through improved R&D. Providing incentives for actors of R&D development of derivatives palm oil products. Strengthening linkages between small and medium-sized companies with large industries in the context of technology transfer. Encouraging market research activities (market research) in order to seek new orientation and target markets and high added value. Increase in the activities of industrial technological research and product engineering integrated chemical derivative of palm oil. Fulfillment in the domestic market and export market expansion. Provision of promotional and marketing facilities. Technology development process efficient and environmentally insightful. Application Management Impact handling of Safety, Security, Health and Environment (K3) in palm oil-based chemical industry.
In order to accelerate the development of downstream oil industry, the government will improve the supporting infrastructure elements such as the construction of port facilities and storage tanks (including in Papua and East Kalimantan), credit incentives for small farmers, and providing tax incentives for new investment during the first 3 years.
Sources : Ministry of Industry Republic of Indonesia, 2011
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Regulation is the operationalization NSWi : 1. BKPM chief Regulation No.11 Year 2009 on the Procedures for Implementation, Development, and Reporting Services at the One Stop Capital Investment. 2. BKPM chief Regulation No.12 Year 2009 on Guidelines and Procedures for Investment Application. 3. BKPM chief Regulation No.13 Year 2009 on Guidelines and Procedures for Implementation of Investment Control. 4. BKPM chief Regulation No.14 Year 2009 on Information Service System and Licensing of Electronic Investment. Function of NSWi : NSWi serves as a liaison and facilitator for the stakeholders with respect to investments in Indonesia. Currently, the parties are connected and can utilize NSWi among others; investors (investors), public, central government agencies, Integrated Services One Team (PTSP), Section Promotion and Investment Co-operation and Investment Section Control Implementation.
SPIPISE has the following purposes : 1. Stimulating the creation of a conducive business climate for investment in Indonesia 2. Increased promotion of cooperation and investment services with the main partner countries. 3. Improving services, facilities, and advocacy related to investment in Indonesia. 4. Increasing the role of institutional investment and investment information system (SPIPISE). SPIPISE useful as : 1. Single submission of data & information. 2. Single and synchronous processing of data and information. 3. Single Decision-making for investment information & licensing process. 4. Ease of licensing process tracking. Process Flow Services : The flow process of information services and investment services in general are described in the following diagram:
Source : http://www.nswi.bkpm.go.id
STIMULATION
DIVISION OF INVESTMENT IMPLEMENTATION CONTROL
INVESTOR
Continuing the roll out to an area covering 70% of the total investment value in Indonesia, Includes all permissions in all business sectors in Indonesia
PUBLIC
2
Pilot project: BATAM & CENTER for the type of permit and non permit investments that are served by Center of BKPM.
PHASE 3
PROMOTION
WHY NSWi?
SERVICES
PHASE 2
NSWI
CENTRAL GOVERNMENT
PHASE 1
Roll out to a potential area that covers 30% of the total investment value in Indonesia, covering the entire license in 4 main sectors: (1) manufacturing, (2) trade, (3) plantation, (4) construction
COLLABORATION
PTSP CENTRAL / PROVINCIAL / DISTRICT / CITY
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