"The industry helps in maintaining economic sovereignty, especially related to import substitution and territoriality at the borders," the ministry's Director General of Agro Industry, Putu Juli Ardika, stated on Thursday.
According to Ardika, the contribution of palm oil commodities has dominated Indonesia's economic performance for the past two decades.
He stated that palm oil has been used to meet food, non-food, and renewable fuel needs and has also become a leading export commodity to increase the country's foreign exchange from products with high added value.
He remarked that the processing industry has established new centers of economic growth in Sumatra, Kalimantan, and in eastern Indonesia.
"There is a growth of new centers of palm oil-based industry outside Java, including in Dumai-Riau, Sei Mangkei-North Sumatra, Tarjun-South Kalimantan, West Kotawaringin-Central Kalimantan, Bitung-North Sulawesi, and Balikpapan-East Kalimantan," he elaborated.
Ardika affirmed that these new centers also developed new industrial areas based on palm oil.
He drew attention to a significant expansion in palm oil product diversity, with the number of different palm oil types increasing from 54 in 2010 to 193 in 2023.
Meanwhile, the proportion of raw materials to processed palm oil exports has undergone a substantial transformation. In 2010, raw materials dominated, comprising 40 percent of the exports, with downstream products accounting for 60 percent. By 2023, this dynamic had dramatically shifted, with raw materials plummeting to a mere seven percent and value-added palm oil products surging to 93 percent.
"This demonstrates the correct implementation of the downstreaming policy," Ardika noted.
Another broad impact brought by the palm oil processing industry is the 17 million people absorbed directly and indirectly through the workforce. Moreover, he remarked that the sector makes a substantial economic contribution, accounting for 3.5 percent of the nation's total gross domestic product (GDP).
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Translator: Ahmad Muzdaffar F, Resinta Sulistiyandari
Editor: Azis Kurmala
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