Downstream A Focus In CPO Industry

Senin, 17 Februari 2014 | 10:29

Following the success of downstream in cacao industry, the government will now focus on downstream in CPO industry this year.

Based on data from Ministry of Industry, the performance of CPO industry in some recent years is not quite satisfactory in terms of investment, production, or export. In 2012-2013 there even was no additional employment. The number of workers in this sector remains 330,000 people.

In 2012, the total of investment in the industry reached IDR27.8 trillion, but in 2013 the value remained. This means the downstream program did not run well, whereas the government had prepared incentive if investors want to develop this industry.

Some of the incentives were tax allowance for certain business or areas (Regulation No.1/2007 jo Regulation No.62/2008 jo Regulation No.52/2011) for all business units in CPO downstream industry.

Besides, certain CPO industry considered as pioneer deserve tax holiday according to PMK No.130/2011 on Facility in the Form of Tax Holiday

Director General of Agro Industry, Ministry of Trade, Panggah Susanto, said the mian program in agro industry is downstream business. This year, he will focus on improving the downstream program, particularly palm and rubber. “I will speed it up, particularly the CPO industry,” he said last week.

Other than incentive, the government also claims to have done various efforts to boost this industry’s performance, ranging from restructuring export duty on CPO and its derivative products (PMK No.75/2012), development of industrial area (Sei Mangkei, North Sumatra), to promoting investment and anti negative campaign.

“This negative campaign is quite harmful. We focus to settle it. We also keep following up potential investor,” he said.

Apart from that, though downstream program in CPO industry did not result significantly, the production capacity of frying oil in the country increased from 45% in 2010 to more than 70% in 2012.

Besides, there is a shift in export trend, previously dominated by CPO (upstream product) to downstream product.

In 2010, export of upstream product reached 60.35% while in 2012 it decreased to 37.93%. On the contrary, export of CPO derivative products in 2010 reached 39.65% while in 2012 it reached 62.07%.

Panggah hopes agro industry this year can grow to improve competitiveness. The government sets growth in agro industry this year to reach 7%, slightly increases than last year at 6%. In facing Asean Economic Community in December 2015, overall, local agro industry can still rely on high domestic consumption.

Most of challenges, Panggah said, are caused by lack of good planning and policy in the sector, for example the difficulty to reduce middlemen. He argued agro activity from upstream to downstream industry can be more ordered as long as local raw material supply is guaranteed.

by Riendy Astria, Intan Permatasari