Indonesia invests $2.7bn in palm oil industry between 2012-14

Indonesia, which is considered to be the world’s largest palm oil producer, has invested about $2.7bn in the industry between 2012 and 2014, according to the Indonesian government.

The investments followed the 2011 policies that included progressive export tax and tax breaks to increase growth in the palm oil processing industry.

According to industry minister MS Hidayat, at least 14 investment projects have been carried out, mostly located in North Sumatra.

Speaking at a press conference Hidayat said: "Some of the investments came from existing companies that expanded their facilities and others from firms that built totally new facilities."

According to statistics provided by the industry, the overall investment has increased the annual production capacity of domestic cooking oil facilities by 73% from late 2011 to 45 million tons early this year. There has also been an increase in the capacity of fatty acid and fatty alcohol facilities by 47% to 1.1 million tons and by 85% to 1.2 million tons, respectively.

These investments have also helped the biodiesel industry, which has seen an increase in its capacity by 57% to 5.67 million tons during the same period.

The varieties of palm oil derivatives being sold have also gone up from 54 types to 154 types.

Talking about future investments, Hidayat said that some billions of investment would enter the Indonesian downstream industry this year, particularly to build refineries in Sumatra to make oleochemicals. However, he did not give the details of these investments.