| A wide range of industries use palm oil |
T. Perkebunan Nusantara III (PTPNIII) is one of Indonesia’s premier agricultural enterprises. The state-owned company produces palm oil, rubber and cocoa from over 165,000 hectares of plantation on Sumatra, a mountainous island in western Indonesia. It is the only plantation in the country active in downstream production. It manufactures such things as rubber bands and latex examination gloves.
One of the oldest plantations in the country, it has carved out a reputation for high quality and excellence. Its rubber gloves and other products are exported to the US, for example.
President Director Akmaluddin Hasibuan says creating a downstream industry can help Indonesia’s agricultural enterprises stabilise their revenue and cope with price fluctuations in the market. Palm oil products are used in a wide range of industries worldwide from food to cosmetics.
Mr Hasibuan thinks the prospects for integrated plantation and downstream industries have never been more promising, especially in light of the government’s policy for developing agribusiness.
Key opportunity areas include the provision of vegetable oils to Europe, where consumption is rising every year. Transport companies have also made enquiries about using the plantation’s oil products. “This is a great opportunity for us because as we know petroleum is non-renewable and not environmentally friendly.”
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Currently,
PTPNIII is seeking investment to increase its downstream manufacturing
capacity. This could involve a strategic partnership with a foreign
investor who has knowledge of the business and access to markets.
Access to technology is also important. “We do not need investment
in basic plantation because we can already do that. What we need is
investment in the downstream industry, because we need the market.”
Although there has been talk of privatisation, Mr Hasibuan believes it is important to get the company on the right track first. “If you want to establish a strategic alliance for your company in the future you have to improve your present performance.” A major restructuring exercise has helped reposition the company in readiness for the next step forward.
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