Indonesia attracts $3.7 bln in investment to boost palm oil processing

Indonesia attracted IDR 62.8 trillion (over $3.7 billion) in the palm oil sector in 2025. The funds are aimed at developing higher-value products from raw materials, allowing the country to move up the value chain and generate greater economic benefits from its agricultural resources.

Investment Minister Rosan Roeslani said the downstream policy is designed to create jobs and a multiplier effect for the economy, as domestic manufacturing also improves human capital and introduces new technologies. “We will continue to encourage this activity in the palm oil industry,” Roeslani emphasized.

Data shows that Indonesia also received around IDR 6.6 trillion in investments in “other forestry sectors,” including nutmeg, pine, coconut, cacao, and biofuel. The minister did not specify how much came from domestic versus foreign investors but stressed that the focus remains on industrial processing of raw materials.

The downstream push extends beyond forestry to mining, fisheries, and the oil and gas sector. For example, investments in nickel processing reached IDR 185.2 trillion (nearly $11 billion), almost three times the amount invested in palm oil. Since 2020, Indonesia has stopped exporting unprocessed nickel ores to stimulate domestic industrial processing.

Indonesia, the world’s largest palm oil supplier, is also using the commodity to reduce fuel imports. Its B40 policy mandates a 40% palm oil blend in biofuel, and the government plans to raise it to 50% (B50) in the second half of the year, depending on test results and price dynamics for oil and palm oil.

Tags: Indonesia, investment, palm oil