Ministry of Industry Continues to Spur CPO Production Growth Up to 42 Million Ton

INDUSTRY.co.id - Dumai - Minister of Industry, Airlangga Hartarto said industry downstream will increase the added value and capability in producing diverse and innovative products.

"Therefore, the Ministry of Industry is consistent to encourage the growth of downstream palm oil processing industry in the country as national CPO production is estimated to reach 42 million tons by 2020," Airlangga said during the inauguration ceremony of Sinar Mas Cepsa oleochemical plant in Dumai, Riau (14/8/2017).

He added that one of the downstream sectors of palm oil that is being driven development is the sub-sector of oleochemical industry. "The market for oleochemical products, both domestically and exports, is still widely open because it is a raw material requirement for a number of industries," he said.

In support of the investment opportunities of the downstream sector of palm oil in the country, the Government of Indonesia has implemented two strategic policies, namely the safeguarding of raw materials in the form of tariffs and pro-industrial plantation funds, as well as providing fiscal and non-fiscal incentives to create a conductivity business climate.

As a result, Minister of Industry noted, there is a downstream industry growth of palm oil about 46 percent in the period 2011-2014 after the enactment of PMK no. 128/2011 on tariff of Export Duty and PP. 52 Year 2011 and PMK No. 130 of 2011 on Tax Allowance Incentives and Tax Holiday.

One company that has utilized the facility of Corporate Income Tax Exemption (Income Tax) is Sinar Mas Cepsa. "They have used the facility for seven years," explained the Minister of Industry.

Furthermore, Airlanga explains, the facility is only devoted to pioneer industry with high-tech level. Extensive externalities, and create a forward and backward linkage chain for regional and national economies.

On the occasion, Airlangga expressed his appreciation of Sinar Mas Group and Cepsa Spain as the initiator of Sinar Mas Cepsa or PT. Energi Sejahtera Mas, which builds oleo chemical plants at the national palm oil production center so that it integrates its production process from upstream to downstream.

Minister of Industry believes the existence of this factory can turn the economic activity around Dumai City and Riau Province. Therefore, the oleo chemical plant is expected to establish a partnership between the processing industry and oil palm growers as raw material suppliers so that it will create equal distribution of welfare.

"As a coach of the national industrial sector, we always support the plant to continue to operate sustainably, creating added value with innovative downstream products, to strengthen the integrated downstream industry structure in Indonesia," he concluded.