Indonesia’s agro industry grows 6.3% in Q1 2017, palm oil give major contribution

Photo by Ministry of Industry

JAKARTA (TheInsiderStories) – In the first quarter (Q1) of 2017, Indonesia’s agro industry growth 6.33 percent, one of the largest contribution from the food and beverage industry which rose 8.15 percent compared to the same period in 2016. The investment value of domestic investment recorded Rp14.69 trillion and foreign investment $600 million.

Directorate general of  Minister of Industry Panggah Susanto said in a press statement, in the Q1 2017, export value reached $12.12 billion, where the export of crude palm oil and its derivatives worth of $20 billion. He explained, the agro industry’s contribution to GDP of non-oil and gas processing industry is 45.81 percent.

According to him, the development of agro industry is largely determined by the existence of the upstream sector management, among others from plantations, agriculture, livestock, marine, and forestry. Panggah said, Indonesia’s superior position from the agro industry sector, among them are the number one palm producer, the number 3 cocoa producer, and the world’s No. 6 pulp and paper producer.

He continued, to boost the agro industry business, the ministry has offered incentives to attract investors to build sugar factories in Indonesia, in the form of granting import permits raw materials of raw crystal. The policy is contained in the Regulation of the Minister of Industry No. 10 of 2017 concerning Facilities Obtaining Raw Materials in the Framework of Sugar Industry Development.

“The goal is to build a sugar industry that is integrated with sugarcane plantations, accelerate sugar cane development and maximize utilization of factory machinery,” he said.

In addition, according to the regulation, sugar mills outside Java will be granted permission to import raw materials of GKM for seven years in stages. In the first year, the Ministry of Industry granted import permits 90 percent of all raw material needs gradually decreased to zero percent in the eighth year.

Then, for the sugar factory located in Java Island, the import permit is granted for five years and gradually the import is reduced. While the sugar factory that does the expansion, given incentives for three years.

The sugar factory that could use the incentives is a new sugar mill or an expansion that is integrated with sugarcane plantations that build a complete sugar factory starting from the extraction process or grinding until the crystallization process as required.