General Chairman of Apolin Rapolo Hutabarat said the prediction is based on the support from the government in the form of regulation that stimulate palm oil processing industry.
Oleo-chemicals are produced mainly from palm oil and Indonesia is the world`s largest producer of palm oil.
Rapolo said the country`s oleo-chemical industry has grown steadily over the past three years . The production grew 10.68 percent annually in volume, he added.
The country`s exports of oleo-chemicals increased 19.61 percent on the average per year.
In 2019, Apolin predicted exports of oleo-chemicals would grow 12 percent in volume to 5.36 million tons from 2018 with export value rising 20 percent to US$5 billion.
"The increase in oleo-chemical industry is attributable partly to growing cosmetics and body care industry using palm oil as the feed stock," Rapolo said.
Expansion of tourism sector will also contribute to growing demand for oleo-chemical products, he said, adding travelers generally carry cosmetics and body care products such as soap and shampoo.
He said in the first six months of the year, the country`s exports of oleo-chemicals totaled 2.39 million tons. In the whole year, exports are predicted to reach 4.79 million tons valued at US$4.17 billion.
Oleo-chemicals are also needed in pharmaceutical industry, oil drilling, steel industry, tire industry, household goods such as laundry soap, and toothpaste industry beside cosmetics and shampoo.
He said global demand for oleo-chemicals is predicted to grow in the coming years and exports from Indonesia are increasing on aggressive marketing drives by producers with strong support from the government.
Indonesia has exported oleo-chemicals to the European Union, China, India, South Korea and Japan. Rapolo said Africa is also a potential market for oleo-chemicals nit yet sufficiently tapped.
Soap noodle is higher in demand , he said, adding, so far, there has been no significant problem in the market expansion drive.
"Producers have continued to seek to expand markets and strengthening market foothold in traditional markets," he said.
The country`s oleo-chemical industry has a total production capacity of 5.5 million tons and currently capacity utilization is 75 percent with 21 types of product of oleo-chemical derivative.
Apolin said it appreciated the government for its policy maintaining conducive investment climate with tax holiday and tax allowance including finance minister regulations No. 29/2018 simplifying licensing procedure and No. 35/2018 cutting corporate income tax.
The government hopes to boost development of the country`s oleo-chemical industry with the availability of the basic material in abundance.
Reporting by Subagyo (SYS/AS).
Editing by A Saragih
Reporter: Antara
Editor: Fardah Assegaf
Copyright © ANTARA 2018
