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Increase in CPO supply contributes to rise in cooking oil production.

In the wake of the 1997's crisis, the country's cooking oil industry grew rapidly. In the 1998-2002 period, the production of cooking oil increased 21.6% annually on the average--from 2.19 million tons to 4.63 million tons. The surge in cooking production was recorded mainly in the production of CPO_based cooking oil.

An increase in CPO exports will not affect supplies on the domestic market. The price remains stable despite growing demand ahead of religious festivities like Idul Fitri and Christmas.

Previously, weak purchasing power of the people and deep slump that hit the food manufacturing industry caused a decline in the domestic consumption of cooking oil. In 1998, the domestic consumption fell to 2.12 million tons. Lately the domestic consumption has increased.

An official record of the industry and trade ministry said the country has 46 CPO-based cooking oil producers scattered in 11 provinces with an annual production capacity of 7 million tons. The ministry has not issued new license as the capacity is considered sufficient. In addition, the capacity is not included that of small producers, not properly registered at the ministry. They generally produce and sell cooking oil in bulk without brand.

The stability of rupiah against the U.S. dollar makes exports less attractive. The government, therefore, has cut the export tax on CPO and derivatives. The export tax has been reduced gradually from 60% to 40% to 30%, to 10%, to 5% and to 3% in February, 2001.

Process of producing cooking oil

Cooking oil is produced from animal and vegetable oils. Vegetable oils include crude coconut oil (CCO) and palm oil--crude palm oil (PKO) & palm kernel oil (PKO), soybean oil, groundnut oil, sun flower seed oil, kapok oil and corn oil. In Indonesia, cooking oils are produced from coconut oil and palm oil.

In the process of producing cooking oil from CPO, first there is fractionation of stearin from olein. Olein is used as the basic material for cooking oil and other products like shortening, margarine, salad oil, confectionery fat, and biscuit fat. Stearine if mixed with fatty acid could be used to produce soap, resin, crayon, candle and surface active agent. Stearin is also used to produce shortening, bakery fat, dough fat, head fat, and pastry fat if being fractionated and hydrogenated.

Cooking oil from CPO is produced through two phases namely refinery process and fractionation process. The two phases are used by turn.

It is called wet process when fractionation comes first and dry process when refinery process comes first.

Production by wet process will turn out cooking oil (RBD olein) around 58.5%, RBD stearin 31.5% and free fatty acid (FFA) making up the rest. Production by dry process will turn out more RBD olein 67.7%, crude stearin 25% and FFA 5%.

In order to have a clear cooking oil with soft smell, RBD olein is processed further through three phases--neutralization, bleaching and deodorizing. First olein is refined through neutralization with weak alkali chemical.

The neutralization process is to remove contents of phosphatides. The second process or bleaching is to remove colorants that the cooking oil looks clearer. The deodorizing process is to remove unpleasant odor.

Coconut cooking oil is processed from copra, which is dried coconut meat. The desiccated coconut meat is ground to turn out crude coconut oil (CCO). CCO will be refined again to turn out good quality and clear cooking oil with soft odor.

North Sumatra industrial center

The country's production of cooking oil is dominated by one produced from palm oil (CPO). North Sumatra is the largest producer with 18 factories with an annual production capacity of 2 million tons of cooking oil from CPO.

North Sumatra has the largest oil palm plantations. Jakarta has 6 factories each with larger annual production capacity of 144,000 tons.

According to an official record of the industry and trade ministry, the country has 46 CPO-based cooking oil factories scattered in 11 provinces with an annual production capacity of 7 million tons, not including small factories producing cooking oil without brand for local consumption

The country also has a number of factories producing CCO-based cooking oil. However, limited supply of basic material has dragged down the growth of the industry. Based on the record of Data Consult, the country has 90 factories producing CCO-based cooking oil with an annual capacity of 937,774 tons.

Producers and capacity

Large company groups dominate cooking oil industry such as the Salim Group, Sinar Mas Group, Hasil Karsa Group, Musim Mas Group. Hasil Karsa Group has 4 cooking oil factories with an annual production capacity of 961,675 tons. Its holding company PT Hasil Karsa Perdana was established in 1964 with the name of CV Hasil Karsa. The company, which operated as importer of cement, caustic soda, baby cart and paper started investment in cooking oil industry in 1974. It built a cooking oil factory under PT Hasil Abadi Perdana. Later it built three more factories respectively under PT Singamas Jaya Perdana, PT Asap Abadi, and PT Hasil Kesatuan. The group uses the brand of Vetco for its cooking oil.

The Musim Mas Group has 5 factories with a total annual capacity of 1.76 million tons. The company group was founded by Anwar Karim in 1972 in Medan, North Sumatra with main products soap, glycerine, CPO, and cooking oil. The company group has 4 cooking oil factories respectively run by PT Musim Mas and PT Siringo-ringo in Medan, PT Bina Karya Prima in Bekasi, West Java and PT Mega Surya Mas in Sidoarjo, East Java. The group uses the brand of "Musim Mas".

The largest producer of all were the Sinar Mas group and the Salim Group. The two company group jointly established PT Sayang Heulang However, in 1991, the Sinar Mas Group divested its shares in the joint venture company and established its own cooking oil subsidiary PT SMART Corporation in Surabaya, East Java.

PT SMART Corp., (Sinar Mas Agro Resources And Technology Corporation) is the holding company for all agribusiness subsidiaries of the Sinar Mas Group. Its original name was PT Maskapai Perkebunan Sumcama Padang Halaban established in Jakarta in 1962. In 1991 it began to expand business in palm oil industry producing CPO and derivatives. Its main products are cooking oil, margarine, and vegetable fats. The company also has tea, coconut and banana plantations and tuna fish cannery.

In Dec. 1991, SMART took over from PT Supra Veritas control of PT Mulyorejo Industrial Company which produced cooking oil, margarine and vegetable fat. In 1992, it acquired a cooking oil factory, PT Kunci Mas Wijaya, also from PT Supra Veritas. Later it wholly took over the shares of PT Kunci Mas Wijaya, 49% of PT Inti Gerak Maju, a hybrid coconut and oil palm plantation company and 49% of PT Taipan Nadenggan, an oil palm plantation company. Later again it acquired 50% of PT Sinar Meadow International Indonesia, a producer of cooking oil, margarine and vegetable fat, and PT Sinar Pure Foods International Indonesia, a tuna fish canning company. On Oct. 15 in 1992, the company went public selling 30 million of its shares to the public. Currently the company is 51% owned by PT Purimas Sasmita, 5.48% by Norbax Inc. and 43.52% by investing public.

PT Ivo Mas Tunggal was established by the Panin Group in 1978 with the name of PT Indonesia Vegetable Oil Factory. In 1985, the company was taken over by the Sinar Mas Group. The company has two factories respectively located in Medan and Surabaya. Now the company has an annual production capacity of 312,400 tons. Its products are known with the brand names of "Filma", "Obor", "Kunci Mas", "Paloma", and "Meadolli".

The country has 8 large producers of CCO-based cooking oil with an annual production capacity of 938,000 tons altogether. The capacity utilization of the factories, however, is low because of the limited supplies of copra from the regions.

Cooking oil production rising

The country's production of cooking oil has continued to increase. A robust 21.6% growth was recorded annually in the past five year--from 2.19 million tons in 1998 to 4.63 million tons in 2002. The fast growth was attributable mainly to rising production of CPO-based cooking oil--from 2.3 million tons in 1998 to 4.2 million tons in 2002.

Basic materials

CPO and PKO as cooking oil basic materials are available locally. CPO and PKO are also used as basic material for oleochemicals such as margarine, soap and pharmaceuticals. CPO is used mostly as the basic material for cooking oil. CCO is used only in small portion because of the scarcity of CCO supplies. Few investors interested in expanding coconut tree plantations because of the low grade.

The price of cooking oil from CCO is more expensive partly because of the government policy, which is always linked to security in domestic supply of cooking oil. Meanwhile, supply of basic material for CCO-based cooking oil is getting scarce.

In 1998, the country's production of CPO dropped 9% because of a export tax of more than 40%. The export tax discouraged exports as the profit margin for the grower was no longer attractive. In addition the price in export market was falling.

In 1999, the production resurged by 30.1% to 7.3 million tons. The increase followed growing exports after the government cut the export tax to 10%. The production rose further in the following years to reach 9.98 million tons in 2002--or annual growth of 15.9% in the five years period.

More processing factories needed

The government has issued a regulation requiring every plan to expand oil palm plantation to come with the plan to build CPO processing factory. Currently the capacity of the processing facilities is not proportional with the plantations. More factories are needed to process flesh fruit bunches especially those produced by farmers who could not afford to build a factory.

Lack of processing capacity causes a potential loss of Rp 6.5 trillion a year based on assumption that the cost of tending 1 ha of oil palm plantation is around Rp20 million that the total fund invested by farmers will reach Rp20 trillion. Most of farmers' plantation cultivated in 19961997 are financed by farmers using plasma credits.

In West Sumatra oil palm plantations covering a total area of 162,150 hectares are highly productive. Unfortunately, there are not enough processing factories for fresh fruit bunches they produce. Frustrated farmers have threatened to set fire on their plantations if no factories would buy their fresh fruit bunches in harvest time The regional administration has asked formers not to expand their plantations as no new factories had been planned. Therefore, different from the previous years, in 2001, investment in this sector was more for building new processing factories than for expansion of plantations. Projection for additional capacity for FFB in 2001-2003 was only 331,8 tons smaller than the production capacity of 660,400 tons for CPO and 201,600 tons for PKO in the 2001-2003 period. In 1999-July in 2002, the additional production capacity for TBS was projected at 1.15 million tons. In the 1997-1998 period projection for additional capacity for FFB was even larger namely 50.4 million tons.

Interest in investing in the palm oil sector remains strong. In March 1997, the government closed the sector to foreign investment to give domestic investors opportunity to expand. The policy drew protest from Malaysian investors who are more aggressive than other foreign investors to expand business in oil palm plantations in the country. Lately in line with the economic liberalization policy adopted by the government, new foreign investors have been allowed again to operate in the sector. The decision to lift the ban was issued with a presidential instruction No 6/1998 on January 21 in 1998.

Based on Data Consult's record, BKPM approved new 105 investment projects in this sector in 1997. In 1998, approvals dropped to 21 projects as a result of the crisis. In 1999-2000, interest in investing in the oil palm plantations and palm oil industry dropped further. There were only 9 projects approved during that period including 2 foreign investment projects (PMA). In 2001-Feb., 2003, BKPM approved 13 domestic investment (PMDN) and 2 foreign investment (PMA) projects.

Investment in oil palm plantations and palm oil processing industry to produce CPO and PKO remained significant. In 2001 through 2003, BKPM licensed at least 19 prospective investors to build new oil palm plantations and palm oil processing factories. Two of the projects were owned by PMA companies. Only five of the factories to be built were to be integrated with plantations. One of them was that of PT Aditarwan, a PMDN company located in Lahat, South Sumatra. The company planned to invest Rp 111 billion in its project that was expected to produce 178,850 tons of FFB, 44,690 tons of CPO and 8,938 tons of PKO annually.

Foreign investors planning to build integrated projects are PT Inti Gerak Maju and PT Parit Sembada, with an investment of US$ 3.5 million and US$12.7 million respectively. The two projects will have an annual production capacity of 61,992 tons and 95,000 tons of FFB. Inti Gerak Maju plans to produce PKO with an annual capacity of 3,410 tons. A PMA project plans to invest US$ 11 million on the average with an annual capacity to produce 42,000 tons of CPO and 9,000 tons of PKO. The largest among the PMDN projects is that of PT Wanasawit Subur Lesatari in Kotawaringin Barat, Central Kalimantan, planning to invest Rp 257.41 billion. The company plans to have an annual capacity to produce 58,000 tons of CPO and 16,000 tons of PKO. The second largest is that of PT Laguna Mandiri in Kota Baru, South Kalimantan. The company plans to invest Rp 249.2 billion with an annual capacity to produce 53,000 tons of CPO and 12,000 tons of PKO.

The regional administration of Aceh and investor from Malaysia plan to build a palm oil factory in Lhokseumawe, Aceh, with processing capacity of 60 tons of FFB an hour. The joint venture project is estimated to cost Rp 100 billion. The district administration of Rokan Hulu also plans to build two palm oil factories in cooperation with Duritama Perkasa Engineering, also from Malaysia. The two factories will cost around Rp 80 billion and each will have a processing capacity of 60 tons of FFB an hour.

With plantations totaling around 4 million hectares, the government plans to stop issuing license for new plantations. The existing plantations were considered sufficient to meet domestic market and export. In addition, land is not longer easily available in western part of the country. Investment in Irian Jaya, however, is still allowed.

CPO export tax 3%, export benchmark price unchanged

The export benchmark price (HPE) is set on which export tax is calculated. The export tax to be paid by exporters is a multiplication of export tax tariff and HPE. Export tax is used to discourage export when supply on the domestic market is not yet sufficiently met.

The government has reduced export tax on CPO and derivatives to boost exports. The rupiah stability at around 8,500 per U.S. dollar was also a reason for reducing the export tax.

In early June, 1999, the government reduced export tax from 40% top 30%. On July 2, 1999, based on a decision of the finance minister No. 360/KMK.017/1999 the export tax was reduce further to 10%. The forestry and plantation minister even asked the industry and trade minister to reduce the export tax to zero. Finally, on Sept. 11 in 2000, the industry and trade minister issued a decision reducing the export tax to 5% on CPO and 2% on crude olein, 3% on refined bleached deodorized palm olein.

In February, 2001, the export tax on CPO was still 3% but the export tax was abolished on 7 other products namely branded RBD-olein in 5 kg packaging, crude stearin, RBD stearin, crude PKO and RBD PKO, crude coconut oil (CCO) and RBD CO.

The reduction of the export tax was aimed at boosting export. The production cost of palm oil in the country is relatively cheap. Therefore, the call for abolishing the export tax of 3% is not necessary and the government seems set to maintain the export tax especially as the HPE has not been changed although the price has risen in the world market.

The HPE is US$ 35 per metric tons on oil palm seeds, US$ 160 per ton on CPO, US $175 on RBD palm oil, US$ 165 on crude olein and US$ 190 on RBD palm olein.

CPO export rising

CPO exports have continued to increase since 1999. In 1998 exports totaled 1.48 million tons valued at US$ 745.3 million, up to 6.33 million tons valued at US$ 2.09 billion in 2002.

CPO is major export commodity for the country. The country exports most of its CPO production.

In Indonesia, around 85%-90% of CPO supply is used to feed cooking oil, margarine and shortening industries. The rest is processed further to produce oleochemical.

India largest buyer

Indonesia exported CPO to 98 countries in 2002. The largest buyers were India, China, the Netherlands and Spain. In 1997, exports were made to only 50 countries.

CPO and PKO are exported not only to other Asian countries and Africa, but also to Europe and the United States. Exports to India totaled 1.77 million tons valued at US$ 997.7 million in 2002.

Prices resurging

Growing demand from Europe, China and India pushed up the price of CPO. The price of CPO in mid 2002 was around US$415 per ton and rose further to US$ 440 in international market later. In February, 2003, the price in Rotterdam was US$ 452 per ton after peaking at US$ 4607 that month. The price, however, was still far from 1974's peak of US$ 900 per ton. The price of CPO has a ten year cycle. In 1974, for example, the price peaked at US$ 900 per tons, and the next peak of US$ 800 per ton came ten years later in 1984 after diving to as low as US$ 300 in 1979. Ten years later in 1994, the price was US$ 700 per tons but toward the end of that year the price dropped to US$ 550 per ton. In early 1998, the price fell again to US$ 500 before rising slightly to US$ 519 in March, 1999, but in the following months the price continued to decline to reach US$ 375 per tons in July.

The price fall followed large supplies as a result of a surge in production including in Indonesia. Meanwhile, production of soybean also rose weakening demand for CPO in the world market.

Currently demand tended to rise but the price hovered around US$ 440 per tons despite optimism shown by Gapki that the condition would improve in the coming years.

The price of CPO in the domestic market follows the international price with price references in Rotterdam, Kualalumpur Commodity Exchange (KLCE) and Chicago. CPO producers always monitor CPO prices in the three major market. As the world's largest producer, Malaysia contribute to setting the price in the world market.

Exports and import of cooking oil

Exports of CPO-based cooking oil in bulk are not clearly recorded by BPS as such exports are included in tariff category of HS 1511.9.0000 (other palm oil). It was estimated, however, that cooking oil exports are one third of CPO exports every year. Exports in 1998. Therefore, in 1998, exports of cooking oil were estimated to reach 369,800 tons, up to 1.58 million tons in 2002. Exports of CCO-based cooking oil are included in the category of other copra oil, the exports of which totaled 123,500 tons in 1998, down to 57,300 tons in 2001.

Some times the country imports cooking oil to cope with shortage in domestic supplies. Imports are used to maintain price stability on the domestic market. The government policy is to export CPO after domestic requirement is fully met.

Distribution and marketing

Some of cooking oil supplies on the domestic market are in bulk without brand. Many retailers buy cooking oil in drums to be sold without brand. Branded products, however, are dominant such as those of Sinar Mas and Salim because of their intensive promotional drives. They sell cooking oil in 14-kg--20-kg jerrycans and tins and in 0.6 liter-2 liter plastic bottles. Othe brands in plastic bottles include, Sunrise, Delisis, Barco, Happy Salad, Troficana Slim, Vetco, and Filma. The last two brands are the products of the Sinar Mas group.

After the government put an end to the monopoly of Bulog in CPO distribution and marketing on may 25, 1998 the distribution and marketing are handled by the Joint Marketing Office (KPB) that sells CPO directly to cooperatives in various cities. Previously KPB and plantation companies sold CPO to refineries to be processed into cooking oil, and the refineries sold the cooking oil to Bulog to be distributed in the market. Through a decision of the industry and trade minister No. 505/MPP/Kep/10/1998 issued on Oct. 29 in 1998, the monopoly held by Bulog was ended.

Distribution of CPO from state plantation companies (PTP) is handled by KPB. Distribution of CPO in North Sumatra, West Sumatra, Lampung and part of Java made through CPO storage tank & Deli Installation Belawan in Deli, North Sumatra. In Java particularly in the Jakarta Greater area distribution is made via Tanjung Priok storage tank, North Jakarta. Some private plantation companies distribute their production via KPB, but generally they handle their own distribution directly to consumers.

Domestic Consumption

The country's consumption of cooking oil dropped 6.1% to 2.5 million tons in 1997 and fell again to 2.12 million tons in 1998 as a result of the crisis. The decline was caused by a surge in exports and a sharp decline in the people's purchasing power.

Lately, the price of cooking oil is stable and demand on the domestic market was stronger.

After the crisis, the per capita consumption of cooking oil in the country has increased rapidly in the past six years--up from 10.7 kg in 1998 to 15 kg in 2002. The consumption included around 1 million tons for food processing industry.

Conclusion and Prospects

Price stability has contributed to a 10.6% increase in the domestic consumption of cooking oil to reach 3.14 million tons in 2002. The consumption is predicted to continue to be on the rise to follow the growing per capita consumption now 15kg a year including consumption for food processing industry. Excluding consumption for food manufacturing industry the per capita consumption is estimated at only 10.5 kg a year.

Despite the increase in the domestic consumption of cooking oil, exports of CPO would not be expected top affected as CPO production has also continued to increase from year to year. The country's production of CPO is expected to rise in the coming years as more young trees will begin to yield. In addition, the government has opened the sector widely to foreign investors. With production close to 10 million tons Indonesia is expected to soon overtake Malaysia as the world's largest producer. Currently, Malaysia produces around 11.5 million tons of CPO and its production is not expected to increase significantly in the coming years because of limited availability of land for oil palm plantations.

The world's production of cooking oil totaled 23.5 million tons in 2002 and the production was completely used up. In 2003, the production was estimated to rise to 24.5 million tons. Limited supply of CPO-based cooking oil will push up the price of cooking oil in the world market, but the market is also determined by supply of cooking oils from soybean, groundnut and sun flower seeds.

The accession of China to the World Trade Organization (WTO) has opened the market of vegetable oils the wider. With China in WTO, Malaysia and Indonesia, the world's largest and second largest producers of CPO, have stronger bargaining power in the CPO and cooking oil market. China is a major vegetable oil market accounting for 10% of the world consumption as against Europe's 13% and India' 10%. Indonesia and Malaysia are also large consumers accounting for 12% and 7% of the world's total consumption.

Indonesian exports of cooking oil to India are expected to increase in the coming years after it cut the import duty on that commodity to 70% from 92.4% earlier and the import duty on CPO is maintained at 65%.
Number of factories producing CPO based cooking oil
and capacity, 2002


Location Number of Production
 Factories Capacity

North Sumatra 18 1,986,212
Jakarta 6 864,455
East Java 8 1,019,928
West Java 3 689,000
Riau 3 1,496,250
Lampung 2 237,000
South Sumatra 2 531,000
Central Java 1 90,000
West Sumatra 1 33,000
West Kalimantan 2 55,355
Total 46 7,002,200

Source: Department of Industry and Trade/Data Consult

CPO-based cooking oil factories by groups, 2002

Company Location Capacity Share
 (tons/annum) (%)
CPO-based cooking oil
Musim Mas
Musim Mas, PT Medan, North Sumatra 539,000
Inti Benua, PT Riau 420,000
Bina Karya Prima, PT Bekasi, West Java 500,000
Mega Surya Mas, PT Sidoarjo, East Java 210,000
Siringo-ringo, PT Medan, North Sumatra 90,000
Sub total 1,759,000 25.5

Bukit Kapur Reksa
Multimas Nabati Asahan, PT Medan North Sumatra 450,000
Sinar Alam Permai, PT Palembang 396,000
Bukit Kapur Reksa, PT South Sumatra 478,000
Sub total Riau 1,324,000 19.2

Hasil Karya
Asa Abadi, PT Jakarta 370,025
Singamas Jaya Perdana, PT Medan, North Sumatra 325,000
Hasil Kesatuan, PT Jakarta 147,875
Hasil Abadi Perdana, PT Surabaya, East Java 118,800
Sub total 961,700 13.9

Sinar Mas
Ivo Mas Tunggal, PT Medan North Sumatra 312,400
Smart Corporation, PT Surabaya, East Java 361,200
Mulyo Redjo Surabaya, East Java 118,800
Sinar Meadow Int'l Indonesia Jakarta 30,000
Sub total 822,400 11.9

Intiboga Sejahtera, PT Jakarta and Surabaya 330,000
Sayang Heulang, PT Jakarta 216,000
Sawit Melinda
 Edible Oil Ind. Medan, North Sumatra 24,000
Sub total 570,000 8.3

Raja Garuda Mas
Asianagro Agung Jaya, PT Medan, North Sumatra 71,020
Asianagro Agung Jaua, PT Jakarta 275,280
Sub total 337,280 5.0

PT Perkebunan
Agrintara, PT Riau 360,000
PTP III West Kalimantan 25,355
Sub total 385,355 5.5
Other producers -- 833,345 10.7
Total 7,002,200 00.0

Source: Department of Industry and Trade/Data Consult

CCO-based cooking oil factories in Indonesia, 2002

Company Location Capacity (tons/year)

Kunci Mas Wijaya, PT Surabaya, East Java 72,000
Gunung Slamet Indah, PT Jakarta 60,000
Bitung Manado Oil, PT Manado, North Sulawesi 13,815
Minyak Goreng Barco, PT Jakarta 12,000
Cengkareng Jaya, PT Jakarta 12,000
Bonanza Mega, PT Semarang, Central Java 9,000
Sinar Laut, PT Lampung, Lampung 9,000
Obor Megar, PT Semarang, Central Java 2,800
Total 937,774

Source: Department of Industry and Trade/Data Consult

Indonesia's production of cooking oil, 1993-1998


 Year CCO CPO Other Total Growth
 based based vegetable oil (%)

 1998 114,485 2,072,600 105,091 2,292,176 --
 1999 100,449 2,400,000 151,069 2,651,518 15.7
 2000 200,328 3,534,918 174,484 3,909,730 47.5
 2001 220,360 3,887,400 191,932 4,299,692 10.0
 2002 231,200 4,197,960 200,550 4,629,710 7.7
Average growth 20.2

(*) Revised

Source: Department of Industry and Trade/Data Consult

Indonesia's production of CPO and PKO,1998-2002

Year CPO PKO Total Growth

1998 5,096,000 544,154 5,640,154 --
1999 6,500,000 838,400 7,338,400 30.1
2000 6,900,000 850,900 7,750,900 5.6
2001 7,200,000 901,600 8,101,600 4.5
2002 8,862,000 1,118,000 9,980,000 23.2
T-Average growth 15.9

Source: Industry and Trade Ministry/Data Consult

Investments in palm oil industry and oil palm plantations
approved by BKPM,1997-2003

Projects Units 1997 1999/ 2001/
 2000 (*) 2003
P M D N :
--Number of projects Unit 126 9 17
--Investment Rp billion 19,106.4 1,129.8 2,024.5
--Areas '000 ha 3,237.6 -- --
--Capacity FFB '000 tons 49,694.5 1,154.0 557.9
 CPO '000 tons 9,344.4 332.0 762.4
 PKO '000 tons 2,353.0 79.0 233.3

P M A :
--Number of projects unit 5 2 2
--Investment US$'million 421.0 23.0 16.2
--Area '000 ha 92.0 -- --
--Capacity FFB '000 tons 2,752.0 -- 156.9
 CPO '000 tons 405.0 83.0 --
 PKO '000 tons 131.0 17.0 3.4
--Total projects Unit 131 11 19
--Investment Rp 'billion 19,106.4 1,129.8 2,024.5
 US$'million 421.0 23.0 16.2
--Area '000 ha 3,434.7 -- --
--Capacity FFB '000 tons 50,446.5 1,154.0 714.8
 CPO '000 tons 9,749.4 415.0 762.4
 PKO '000 tons 4,484.0 96.0 236.7

Note: FFB = fresh fruit bunches;

(*) January 1999-July 2000

Source: Investment Coordinating Board (BKPM)/Data Consult

New projects and expansion projects in palm oil sector, 2001-2003

Name of company Status Location (Ton/year)

--Aditarwan, PT PMDN Lahat, TBS 178,850
 Sejahtera, PT South Sumatra CPO 44,690
 South Sulawesi PKO 8,938
--Bahana Nusa PMDN Indragiri Hulu CPO 43,560
 Interindo, PT Riau PK 9,900
 PKO 4,158
 PKE 4,950
--Jambi Sejahtera PMDN Tanjung Jabung, CPO 136,080
 Palm Oil PT Jambi
--Torus Ganda, PT PMDN Rokan Hulu, CPO 72,000
 Riau PKO 12,600
--Jambi Oil Jaya PT PMDN Muara Jambi, PKO 33,500
--Cornila Permata PMDN Muara Jambi CPO 64,800
 Samudra, PT Jambi PKO 16,200
--Sinar Agro PMDN Pelalawan, CPO 43,560
 Raya, PT Riau PK 9,900
 PKO 4,158
 PKE 4,950
--Indoguna PMDN Muara Jambi PKO 63,000
 Inticornela, PT Jambi PKE 81,000
--Indomakmur Sawit PMDN Riau CPO 43,560
 Berjaya, PT PKO 4,950
--Agro Makmur PMDN Bitung CPO 82,500
 Raya, PT North Sulawesi PKO 67,500
--Sibadihon Sawitta PMDN Labuhan Batu CPO 12,600
 Torop Lestari North Sumatra PKO 2,700
--Sultan Oil & PMDN South Lampung, PKO 30,000
 Chemicals Lampung RPO 12,000
 Industry, PT
--Tunas Sawerma, PT PMDN Merauke CPO 54,000
 Papua PKO 13,500
--Inti Gerak maju PT PMA Kota Baru, TBS 61,992
 East Kalimantan PKO 3,410
--Parit Sembada, PT PMA Belitung, TBS 95,000
 Bangka Belitung
--Mega Agung PMDN Indragiri Hikir, RBDO 333,000
 Perkasa, PT Riau RBDS 85,500
 PFAD 22,500
--Dutamulti Intiagro PMDN Labuhan Batu, CPO 56,700
 Plantation, PT North Sumatra PKO 12,150

--Pulau Rupat Sawit PMDN Natuna, Riau TBS 144,000
 Rayatama, PT CPO 28,800
 PKO 6.480
--Sajang Heulan, PT PMDN Tanah Bumbu, TBS 235,000
 CPO 16,500
 PKO 4,000

 Investment Scheduled
Name of company (Rp 'million) to Operate

--Aditarwan, PT 111,000 Jul.'05
 Sejahtera, PT

--Bahana Nusa 64,500 Jul.'04
 Interindo, PT

--Jambi Sejahtera 199,360 Aug.'04
 Palm Oil PT
--Torus Ganda, PT 88,763 Jul.'04

--Jambi Oil Jaya PT 40,025 Sep.'03

--Cornila Permata 78,750 Oct.'04
 Samudra, PT
--Sinar Agro 64,500 Nov.'04
 Raya, PT

--Indoguna 71,905 Jan.'05
 Inticornela, PT
--Indomakmur Sawit 64,500 Feb.'06
 Berjaya, PT
--Agro Makmur 101,940 Mar.'03
 Raya, PT
--Sibadihon Sawitta 25,103 Mar.'05
 Torop Lestari
--Sultan Oil & 4,000 *) Sep.'04
 Industry, PT
--Tunas Sawerma PT 48,000 Sep.'05

--Inti Gerak maju, PT US$ 3.5 mill. *) Dec.'06

--Parit Sembada, PT US$ 12.7 mill *) Dec.'05

--Mega Agung 221,000 Aug'06
 Perkasa, PT

--Dutamulti Intiagro 111,237 Sep'05
 Plantation, PT

--Pulau Rupat Sawit 145,000 Sep'08
 Rayatama, PT

--Sajang Heulan, PT 152,962 Sep'08

*) Production includes coconut oil, soap and detergent

Source: BKPM/Data Consult

HPE and export tax on CPO,1999-2002

Period (US$/ton) (US$/ton)

July 1998 610 60%
February 1999 535 40%
June 1999 365 30%
July 1999 260 10%
September 1999 190 5%
February 2001 160 3%
June 2002 160 3%
February 2003 160 3%

Source: Data Consult

CPO and PKO exports by Indonesia, 1998 - 2002


Year CPO PKO Total

1998 1,479,278 347,009 1,826,287
 745,278 195,447 940,725

1999 3,298,986 597,842 3,896,828
 1,114,242 347,975 1,462,217

2000 4,110,027 578,824 4,688,851
 1,087,279 239,120 1,326,399

2001 4,903,218 576,272 5,479,490
 1,080,906 146,259 1,227,165

2002 6,333,700 580,000 6,913,700
 2,092,400 150,000 2,242,400

Source: CBS/Data Consult

CPO exports by countries of destination, 2002

Countries of Volume Value
destination ('000 tons) (US$'000,000)

India 1,766.6 585.2
Netherland 997.7 310.3
Pakistan 269.4 88.8
German 200.7 60.4
Italy 34.0 11.5
United Kingdom 25.9 8.1
USA 7.3 2.5
Japan 4.4 1.2
Other countries 3,027.7 1,024.4
Total 6,333.7 2,092.4

Source: CBS/Data Consult

Averageper ton

Year CPO price per ton

1974 US$ 900
1984 US$ 800
1989 US$ 300
1994 US$ 730
1998 US$ 650
2000 US$ 308
2002 US$ 440

Source: Data Consult

Estimate of exports of CPO-based cooking oil,

Year Volume Value
 tons (US$'000)

1998 369,819 186,318
1999 824,746 78,561
2000 1,027,507 271,820
2001 1,225,805 270,227
2002 1,583,425 523,100

Source: CBS/Data Consult

Estimate of cooking oil consumption,

Year Consumption Growth

1998 2,117 --
1999 2,426 14.6
2000 2,882 18.8
2001 3,075 6.7
2002 3,140 2.1
Average growth 10.6

Source: Data Consult

Table - 14
Estimate of cooking oil consumption per capita,1998-2002

Year Total domestic Population
 (000' tons) (000)

1998 2,117 198,000
1999 2,426 200,700
2000 2,882 203,400
2001 3,075 206100
2002 3,140 210,000

Year Per capita Change

1998 10.7 --
1999 12.1 13.1
2000 14.2 17.4
2001 14.9 4.9
2002 15.0 0.7

Source: Data Consult
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Title Annotation:Industry Profile; crude palm oil
Comment:Increase in CPO supply contributes to rise in cooking oil production.(Industry Profile)(crude palm oil)
Publication:Indonesian Commercial Newsletter
Geographic Code:9INDO
Date:Jan 27, 2004
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