Jl. Gatot Subroto No. 44Jakarta 12190, PO. Box 3186Indonesia.

p. +6221 5292 1334 f. +6221 5264 211www.bkpm.go.id e. :info@bkpm.go.id

PALM

OIL

INVESTMENT

GOVERNMENT PROVISIONS AND SUPPORTS

Negative Investment List - Presidential Regulation No. 39 of 2014 Investment in the business field of plantation is open widely for with up to 95% foreign investor for an areas sized 25 Ha or more, with or without processing unit.

Investment Incentives

Indonesia Investment One Stop Service (OSS) Centerand Marketing OfficerIndonesian President, Joko Widodo, officially launched the Integrated One Stop Service Centre (PTSP) at Indonesia Investment Coordinating Board (BKPM) in early January 2015. This service aims to smoothen and simplify licensing procedures for investment projects. From now on, investors will not need to visit various ministries or government agencies to obtain necessary permits but can simply turn to the BKPM's one-stop service centre. In addition, currently the BKPM has established what so called Marketing Officers (MO) who will take care any investment interest to explore investment opportunities in the country. The contact of MO is Directorate of Sector Promotion, BKPM (Phone: [62-21] 525-2008 Ext: 3568, Fax: [62-21] 5288-0390, Email: info@bkpm.go.id).

Local PartnerA host of organizations supporting Indonesia's agriculture sector are growing in prominence, are academic centers of excellence.

A Major, Skilled Workforce in Key CropsMore than 21 million skilled workers work in Indonesia's tree crop estates. This gives Indonesia an unrivalled agricultural labour force in the ASEAN region

Palm Oil Manufacturing Plant Labour Costs (USD) By job type and countryAccording to the Financial Times, many of the average labour costs per head in a typical food and beverage manufacturing plant are cheaper in Indonesia than the other four major ASEAN countries, including: Production Mangers and Unskilled Production Operatives

www.bkpm.go.id

Indonesian Palm Oil AssociationWebsite: www.gapki.or.id

Indonesian Food and Beverage Producers AssociationWebsite: www.gapmmi.or.id

Bogor Agricultural UniversityWebsite: www.ipb.ac.id

he agricultural sector of Indonesia comprises Tlarge planta�ons (both state-owned and private) and smallholder produc�on modes. The large planta�ons tend to focus on

commodi�es which are important for export products (palm oil and rubber), while the smallhold farmers focus on rice, soybeans, corn, fruits and vegetables.

WHY INDONESIA?Palm oil is one of the world's most produced and consumed oils. This compe��ve and highly stable product is used in a wide variety of food/ cosme�c and hygiene products, and can be used as source for bio-fuel or biodiesel. Most palm oil is produced in Asia, Africa and South America because the trees need warm temperatures, sunshine and plenty of rain in order to maximize produc�on. Global palm oil produc�on is dominated by Indonesia and Malaysia. These two countries together account for around 85 to 90 percent of total global palm oil produc�on. Indonesia is currently the largest producer and exporter of palm oil worldwide.

Palm oil industry has shown a robust growth during the last 15 years in Indonesia. This growth is visible in the country's produc�on and export numbers as well as in the expansion of its palm oil estate areas. Driven by increased global demand and

PALM OILINVESTMENT

higher yields, palm oil cul�va�on has been expanded significantly by Indonesian farmers and conglomerates.

The majority of Indonesia's palm oil produc�on is exported (see table below). The most important export des�na�on countries are China, India, Malaysia, Singapore and the Netherlands.

According to data from the Indonesian Ministry of Agriculture the total area of oil palm planta�ons in Indonesia is currently around eight million hectares; a number which is twice as much as in the year 2000 when around four million hectares of Indonesian soil were used for palm oil planta�ons. This number is expected to increase to 13 million hectares by 2020.

MARKET OPPORTUNITIESŸ By 2020, it is es�mated that palm oil produc�on will reach 40 million

tonnes. While the es�mated world consump�on will reach 60 million tonnes. At this rate, Indonesia will be able to fulfill 80% of the world's demand.

Ÿ Palm oil industry of Indonesia is predicted to have a strongth growth in the future, it is because palm oil commodity demand keep increasing. The addi�on demand of vegetable oil could reach by 6 million ton each year, 2 million ton for Indonesia market and 1,5 million ton for Malaysian market.

Ÿ There are 3,5 million tonnes of market opportuni�es to suplly palm oil industry. It is promising prospect because Indonesia s�ll possess abundant land to be developed to support the increasing ac�vity of palm oil industry.

Investment on Downstream Industry of Palm Oil Foreign Direct Investment on Agribusiness sector (CPO and Cooking Palm Oil) reached US$ 675.2 million increased 150.1% in 2014. Increase also occurred of the realiza�on of Domes�c Direct Investment where in 2014 its realiza�on was US$ 376.9 million or increased 18,7% by 2014.

%80 the world's

demand

Indonesia will be able to fulfill

Cooking Palm Oil Industry in East KutaiThe Provincial Government of East Kalimantan aims to develop 1 million Ha of Palm. In addition, to cooking oil production, other downstream industries are also encouraged i.e. margarine, soap, cosmetic,pharmaceutical etc.

Palm Oil Downstream Industry in Bengkulu The Provincial Government of Bengkulu is offering investment in palm oil processing industry from fresh fruits to CPO with capacity of 30 tonnes/hour from 18 units in the District of Seluma and District Kaur.