Indonesia creates new palm oil giant

Indonesia handed over nearly 400,000 hectares of confiscated oil palm plantations to Agrinas Palma Nusantara on Wednesday, giving the new state-owned company a massive land bank that could make it one of the world’s largest oil palm producers.

The plantations were seized by the government’s forestry task force from companies that violate the country’s laws, Reuters reported. The government has not disclosed their names, but there are more than 230 of them.

Agrinas is a fast-growing palm oil start-up created in January by the administration of President Prabowo Subianto through the restructuring of an infrastructure services firm. As of March, Agrinas had been managing about 221,000 hectares of plantations. The task force transferred the rest of the land to the firm yesterday. With the addition of the new plantations, the total area under Agrinas’ management will exceed 833,000 hectares. The company’s current production level is 6,000 tons of raw material daily.

Defense Minister Sjafri Sjamsoeddine, who heads the forestry task force, said authorities have so far confiscated more than 2 million hectares of illegal plantations in forested areas across the country. He said the task force aims to seize a total of 3 million hectares of land by August, which will either be preserved for oil palm and other plantations or reforested.

It was previously reported that Indonesian palm oil exports to the United States could decline due to the threat of a 32% U.S. tariff on Indonesian goods.

Tags: Indonesia, palm oil