Wilmar’s project to kick off in East Kalimantan

JAKARTA. Singapore-listed palm oil company Wilmar is expecting to build a new cooking oil refinery worth between US$25 million and $30 million in East Kalimantan by the end of this year.

Wilmar Indonesia corporate legal director Johannes says the new facility would be built nearby its oil palm plantation in the province to produce 2,500 tons of cooking oil per day.

It will be the company’s first refinery in the province.

“It needs around $5 million to $6 million to develop an ordinary oil palm plant,” he explained to reporters on Thursday.

“The cost of building a cooking oil refinery would rise five to six-fold from the figure.”

Johannes said the company currently owned 150 hectares of land bank that could be used to develop the facility.

He added the new facility would source its raw material, crude palm oil (CPO), from its own oil palm plantation located on a 12,000-hectare plot of land, which included 5,000 hectares of planted area, in the province.

The plantation produced 45 tons of crude palm oil (CPO) every hour, according to Johannes.

He said that the company was currently going through several permit processes needed to establish the facility, and expected to start construction late this year should things go as planned.

By establishing a cooking oil refinery in the area, Johannes said, the company aimed at cutting time and expenses used to transport CPO to its facility in Gresik, East Java, to be processed.

Wilmar Indonesia — the largest palm oil producer in the country — is a subsidiary of Wilmar International Ltd, Asia’s leading agribusiness group, which operates in more than 20 countries across four continents.

Wilmar Indonesia contributes 15 percent of the Group’s total production.

The company, whose assets now stand at $35 billion, has 300,000 hectares of land across the archipelago, including 140,000 hectares dedicated to oil palm plantations.

Wilmar is planning to acquire more land, and in the next five years expects to produce 10 million tons of CPO.

It has targeted to produce 50 million tons of CPO by 2030 from currently 22 tons.

Its subsidiary PT Wilmar Nabati produces various palm oil-based consumer goods, including cooking oil and margarine.

The company currently produces 20,000 tons of cooking oil a day — marketed under the brand Fortune and Sania — from facilities in Gresik and in Dumai, Riau, according to Johannes.

This subsidiary had disbursed a total of $400 million investment from 2008 to 2012.

It was also reported that the company would disburse another $300 million in 2013 and 2014 to build several new plants.

Besides in East Kalimantan, Wilmar will also build oil refining plants and a flour mill in Padang, West Sumatra, Gresik and Medan, North Sumatra.

Starting this year, the firm expects to produce 345,000 tons of flour a year in Gresik.

Wilmar Indonesia Director MP Tumanggor also said that his firm was also planning to build a sugarcane plantation and refinery in Papua.

“We have requested for a permit from the Forestry Ministry to acquire 48,000 hectares of land for sugarcane plantation, while [the permit request for the construction of] a sugar refinery will follow suit,” he said.

He added that Wilmar Indonesia was currently studying the plan. (Anggi M. Lubis)