New plant in I'nesian SEZ to boost growth

The 2 trillion rupiah (Bt5 billion) plant, which will be run and managed by PT Unilever Oleochemical Indonesia, will mostly process crude palm oil at a capacity of 200,000 tonnes a year. 

Construction on the plant began in 2013 and officially ended in September.

Unilever Oleochemical Indonesia president director Biswaranjan Sen explained that the plant would also serve as a collaboration opportunity between Unilever and around 600 farmers in the local area, who will serve as raw material suppliers to the plant, thereby increasing the agricultural productivity and income in Sei Mangkei. “About 85 per cent of what is processed here will be exported, mostly to Unilever and the rest to non-Unilever parties that work as our suppliers,” Biswaranjan told reporters during the opening ceremony in Sei Mangkei on Thursday. 

“It is the first oleochemical processing factory Unilever has built anywhere in the world and what’s processed here will mainly go into home and personal care products.”

He said that a plan to expand the 12-hectare facility by about 9 hectares was on the cards, provided that the company could secure the required electricity and gas. 

Biswanjaran added that the plant was part of Unilever’s masterplan to use 100 per cent sustainable and certified palm oil in its products by 2020, which he said would be helped by the direct supply of raw materials by local farmers.

Shares in Unilever traded at 37,050 rupiah apiece on Thursday, down 1.98 per cent from the previous day. The stocks have gained 14.7 per cent so far this year this year, easily outstripping the broader benchmark index’s (JCI) 12-per-cent slump.

Coordinating Economic Minister Darmin Nasution commented that the arrival of Unilever Oleochemical Indonesia in Sei Mangkei would not only grow the local economy, but would also help Indonesia move away fromits import goods dependency. 

“The successes at Sei Mangkei could serve as a cornerstone of the development of other special economic zones across Indonesia, and also boost industrial growth outside of Java,” he said on Thursday at the opening ceremony. 

Darmin added that the proximity of the Sei Mangkei SEZ to the Malacca Strait, which will be accessible through the unfinished Kuala Tanjung port project in North Sumatra, would ease the logistics, infrastructure and permit issuances needed for the SEZ to flourish. 

Around 45 to 50 percent of the world’s trade goes through the Malacca Strait, which the minister says can be harnessed by the Kuala Tanjung port in North Sumatra, scheduled to finish construction in 2017.

The relatively new Sei Mangkei SEZ, which opened in January this year, is able to accommodate up to 200 businesses. Investment figures in the zone are estimated to reach 46 trillion rupiah in the next 20 years and create around 150,000 new jobs.