On the picture Mr. Panggah Sunsanto and Mr. Saleh Husin, Minister of Industry of the Republic of Indonesia. Photography by Gualtiero Buonamassa for Diplomat Magazine.
By Roy Lie A Tjam.
H.E. Mr. Saleh Husin, Minister of Industry of the Republic of Indonesia, officially opened on Friday 4 September 2015 a Business and Investment Forum for the downstream palm oil industry at the Hilton Hotel in Rotterdam. Discussions took place in both English and Indonesian.
The delegation from Indonesia was led by Minister Saleh Husin, who was the keynote speaker. Delegation members included senior officials from the Ministries of Industry and Trade; the Indonesian Palm Oil Board; the National Industry Association (GIMNI APROBI APOLIN); major palm oil industry players (Wilmar, Musim Mas Sinar Mas); and Greenpeace.
The palm oil industry dates back to the early 1800s when it was established by the Dutch and was thereafter nationalized in the 1950s.
The objective of the forum is to provide a better understanding of the business environment in Indonesia for prospective investors.
The forum is also designed to attract expertise in processing technology, advanced product engineering and modern machine technology, all to be implemented in Indonesia.
Minister Saleh Husin and the Indonesian delegations met with a several Dutch/European officials, among them Mr. Frans Claassen, Chairman of CPOA.
The Government of Indonesia is appreciative of the efforts made by the European Palm Oil Alliance, headed by Mr. Frans Claassen. In particular, the latter’s campaign on the advantages of palm oil products and derivatives has helped to shape positive opinion on the Indonesian palm oil industry.
Various investment facilities and tax incentives, such as tax allowances for firms in the palm oil processing industry, have been put in place by the government. They include a period of 5-15 years 100% tax free for pioneer investors in the industry, as well as further tax deductions of up to 30%.
A government regulation imposes export taxes progressively, meaning a higher export tax rate for upstream products and a lower rate for downstream products based on the industry value chain.
The forum also serves to disseminate information that the Indonesian palm oil industry is managed sustainably and complies with the ISPO which is mandatory. It also strengthens cooperation between the port of Rotterdam and the port of Jakarta.
According to Minister Husin, the bottom line of the initiative is to improve the welfare of the Indonesian people.
Presentations were a large part of the forum, and took place under the chairmanship of Mr. Paulus Tjakrawan. Amongst the highlights was Mr Togar Sitanggang, Secretary-General of Indonesian Palm Oil Association IPOA, who elaborated on the vision and mission of IPOA.
During the Q&A, questions were posed by those in the audience regarding the new levy imposed by the Indonesian Government. One of them was from Mr. Frans Classen of MVO, a former diplomat who has served in Indonesia.
A representative of the Dutch Ministry of Foreign Affairs (MFA) applauded the Indonesian government for the strides made in the production of Palm Oil. He also drew attention to the many productive meetings between the MFA and Indonesia in this area. Having said that, the MFA also voiced a critical note on the new government levy, arguing that the law risks deterring investment. The chairman assured those present that the implementation of the levy will be evaluated in the near future.
Indonesia is the largest palm oil producer in the world. In 2004 Indonesia produced in the region of 35 million tonnes of palm oil crude; it is estimated that more than 45 million tonnes will be produced in 2020. There are many potential investment opportunities in Indonesia in the field of downstream processing of palm oil, a commodity indispensable in the human consumption chain.
The government is very serious about the preparation and implementation of stimulus packages, including deregulation of the industry and trade sectors.
The business and investment forum has undoubtedly been a successful one.
