P&G considers investing in Indonesia oleochemicals
Reuters, Jakarta - 23/05/2011
Procter & Gamble Co (P&G) is considering investing in the oleochemical sector in Indonesia, the country's industry ministry said on Monday.
"P&G is anticipating the need for 200,000 tonnes of fatty alcohol in the coming ten years from Indonesia," Industry Minister MS Hidayat said following a meeting with P&G officials at his office.
Benny Wachjudi, director general of agricultural industry at the ministry and who attended the meeting, said the interest from the firm's chemicals division for a source for the oleochemicals product was different from P&G's planned $100 million investment in a manufacturing plant in Indonesia that was announced by the government last month.
High commodity prices and government efforts to boost downstream industries have started to attract investment in the past year in Indonesia, the world's top producer of palm oil that is a feedstock for the oleochemical industry.
Indonesia plans to offer fiscal incentives and restructure its export tax policy on crude palm oil, after it steadily hiked the tax to 25 percent in February from just 3 percent a year ago, to do more to spur downstream processing in the country.
The country is still reliant on exports of raw materials, and is aiming to move up the value chain.
Agriculture companies are looking to take advantage of growing wealth within Southeast Asia's biggest economy.
Indonesia's economy grew by 6.5 percent in the first quarter of 2011 from a year earlier, data showed in early May, due in part to strong domestic consumption.