Category: News (7)

Palm oil is an essential contributor to the Indonesian economy and rural livelihoods. However it has faced increasing international scrutiny over its sustainability. Since 2009, the Indonesian government has a national sustainability platform called Indonesian Sustainable Palm Oil (ISPO), and ISPO certification has been mandatory for palm oil mills, estates, and suppliers in the country.

ISPO has a dual function. First, it aims to improve Indonesian palm oil’s global competitiveness through a set of government directives and regulations. Second, it sets national standards for sustainability practices of Indonesian palm oil companies. ISPO covers 100 stringent central and regional government regulations. These range from environmental management, labour practices, and legality aspects to health and safety and best practices in plantation management.

The ISPO Commission is led by the Director General of Plantation, Ministry of Agriculture, and involves senior officials from the Ministry of Environment and Forestry, Ministry of Manpower, National Land Agency, and economic agencies under the supervision of the Coordinating Ministry of Economy. The Commission issues ISPO certificates to Indonesian companies that pass all of the ISPO requirements.

In the 9 years after the implementation of Indonesia Sustainable Palm Oil (ISPO), the result have not been effective. As reported by Forest Watch Indonesia (FWI), out of 11.6 million hectares of palm oil plantations in Indonesia only 13 percent has implemented ISPO systems.

Indonesia considers ISPO certification to be a key strategic initiative for the palm oil industry because it helps improve supply chain visibility and sustainability. We are expecting the ISPO Commission to strengthen its governance and potential new regulations via Presidential decrees as early as second half 2018. Getting ISPO Certification requires compliance with human rights, safety, and environmental issues.

 

 

Palm oil has become one of the most important vegetable oils for entire world community, as it is widely used in various food, cosmetic, and healthcare products and it can be used as a source for biofuels or biodiesel.

Until 2017, the top ranking global palm oil producer is Indonesia with a production capacity of 31 million tons, followed by Malaysia (17.7 million tons), Thailand (2.1 million tons), Colombia (1.2 million tons), and Nigeria (970 thousand tons), while other countries contributed 4.7 million tons. Thus, the overall market share of world palm oil production is dominated by Indonesia with 64 percent.

The export destinations of Indonesia’s palm oil are India (7.6 million tons) followed by China (3.1 million tons), Egypt (2.3 million tons), Pakistan (2.2 million tons), United Arab Emirates 2.1 million tons), Spain (1.4 million tons), the Netherlands (1.3 million tons), the United States (1.2 million tons), Bangladesh (1.2 million tons), and Italy (1.1 million). Although the numbers are not significant, Indonesia also exports to several Latin American, North American, and Eastern European countries with a total quantity of 7.5 million tons.

Increasing the quantity of production and export of palm oil in 2017 is a good thing for Indonesia, after a sharp decline in the previous year. Palm oil prices rebounded by 26% and provided foreign exchange of USD 22.9 billion to Indonesia economy. Nevertheless, amidst the volatile price of palm oil, the palm oil business from Indonesia will remain profitable for several reasons, including (1) Profit margins in the palm oil business, (2) International demand increase, (3) The cost of producing palm oil in Indonesia is the lowest in the world, and (4) The higher level of palm oil productivity per hectare compared to other vegetable oils.

 

Palm Oil Business Models

In running the palm oil business there are several models that are commonly known in international trade, namely brokerage model and trading model.

The first model (broker) does not involve the purchase of commodities because your role is purely an intermediary. As a broker you need to build expertise that aims to optimize transactions for the sake of satisfaction of both parties (seller and buyer).

While it does not generate huge profits, it will still generate profits with the smallest risk. In addition, the required capital is relatively small. This model also does not require its own storage because the palm oil is directly sent to the end user. In this business model, you are paid on commission according to the contract agreement.

The disadvantage of this model is that if a sudden price change occurs, the broker will be badly hit by the sharp decline in commodity prices. Conversely, if there is a sudden spike in prices then the broker will get additional profit.

The second model is trading. This model involves purchasing a large quantity of commodities, adding some margin, and selling directly to the buyer. As a trader you need to work exclusively for the supplier’s interest in order to seize market share long term. Your trading team should specifically dedicate their time and experience to ensuring the development of the business.

The trading model business will bring greater and more stable profit, but the capital required is large. In addition, you need an adequate place to store goods or products. This business model has a high risk because you must ensure that the goods are stored properly and are not damaged.

 

Choosing the Right Business Model

From both models above, you should choose the right business model according to the conditions in your local area. You need to negotiate deals on behalf of sellers and buyers and issue contracts establishing those deals. You should strive to provide the highest level of service and contractual protection to sellers and buyers. You must build through time and relationship the quality system to enable continuous improvement to achieve your customers’ expectations.

After selecting the right business model, the next step is to find the source of palm oil production, in which case it is necessary to undertake the following steps (1) cooperate with a trusted supplier, (2) establish an easily accessible loading port at reasonable cost, and (3) specify transport shipping arrangements.

eKomoditi Solutions Indonesia (eKSI) has a platform targeted at handling the business of oil palm commodities. You simply create a MOU with us, then we’ll direct you to which commodities specification you want, including from which port you should load. We will also direct you to which transporter is available.

Currently, we partner with local, international, and multinational companies to help them optimize inventory and information flow to reduce costs and improve service levels for any commodity in Indonesia. We will guide you for the best shipping route allowed to your country.

In 2018 eKomoditi Solutions Indonesia (eKSI) helped supply a variety of companies, including a rubber plantation in West Kalimantan, with palm kernel shell. Please contact us to see how we can help your company with their commodity needs.

Meningkatnya kebutuhan energi dunia dan semakin menipisnya persediaan energi konvensional berbasis fosil telah menyadarkan masyarakat global untuk melakukan penghematan konsumsi energi semaksimal mungkin. Sumber energi fosil selain memerlukan waktu yang lama untuk terbentuk kembali, juga menghasilkan zat-zat pencemar lingkungan yang ditimbulkan dari proses konversi energi konvensional menjadi energi mekanik yang umumnya melalui proses pembakaran.

Sebagaimana diketahui, konsumsi energi berbasis fosil secara global masih sangat tinggi. Data yang direlease oleh Handook of Energy and Economic Statistics of Indonesia (HEESI) pada tahun 2016, menunjukkan tingkat konsumsi energi berbasis fosil mencapai 74,4% dengan perincian antara lain minyak bumi (30,2%), disusul batubara (24,8%) dan gas alam (19,4%).

Sementara untuk Energi Baru dan Terbarukan (EBT) baru terserap sekitar 25,6% dengan peringkat teratas berasal dari bioenergi, disusul tenaga air (hydro power), kemudian geothermal dan tenaga angin (wind power).

Pemakaian energi berbasis fosil yang berlebihan ini ditengarai sebagai penyebab meningkatnya emisi gas rumah kaca yang kian mengkhawatirkan. Selain itu cadangan energi fosil yang semakin menurun dan fakta bahwa energi fosil tidak dapat diperbaharui (unrenewable resources) menjadi alasan perlunya segera mencari energi alternatif atau Energi Baru Terbarukan (EBT).

Salah satunya solusinya adalah dengan memanfaatkan sumber-sumber energi alternatif lain sebagai bahan bakar substitusi yang ramah lingkungan, efektif, efisien dan berkelanjutan (renewable resources) misalnya memanfaatkan cangkang sawit yang merupakan limbah padat dalam industri kelapa sawit.

Cangkang sawit (palm kernel shell) merupakan sumber bioenergi yang memiliki nilai kalori tinggi (4200 Kal/Kg) dan memiliki kandungan sulphur yang sangat rendah. Selain dapat mengurangi emisi karbon, pemanfaatan cangkang sawit sebagai bahan bakar dinilai lebih menguntungkan. Ketersediaan pasokan cangkang sawit juga tidak perlu diragukan mengingat area perkebunan kelapa sawit di Indonesia masih sangat luas.

Berbagai studi ilmiah telah membuktikan manfaat cangkang sawit sebagai bahan bakar alternatif yang ramah lingkungan dan ekonomis. Sebagai perbandingan, untuk menghasilkan energi listrik sebesar 10 MW maka biaya yang dikeluarkan untuk pembelian cangkang sawit hanya sekitar Rp.762 ribu. Sementara jika menggunakan batubara akan membutuhkan biaya sekitar Rp.1,4 juta, Sedangkan jika menggunakan solar akan membutuhkan biaya sekitar Rp.2,9 juta.

 

Pasar Ekspor Cangkang Sawit Masih Terbuka Lebar 

Seiring meningkatnya permintaan cangkang sawit tersebut maka PT. eKomoditi Solutions Indonesia mengambil peluang bisnis ini sebagai salah satu komoditi unggulannya dengan menggandeng beberapa pabrik kelapa sawit baik di Sumatra maupun Kalimantan sebagai supplier. Ekomoditi juga menjajaki pasar ekspor khususnya ke Jepang, Taiwan, Korea Selatan, China dan beberapa negara Eropa, yang memiliki komitmen kuat dalam penggunaan energi ramah lingkungan (green energy).

Saat ini, harga cangkang sawit kualitas ekspor berkisar sekitar US$ 80-90 per ton FOB atau US$ 110-120 per ton CIF. Data yang direlease oleh Asosiasi Pengusaha Cangkang Sawit Indonesia (APCASI) menunjukkan produksi cangkang di Indonesia tidak kurang dari 8 juta ton per tahun. Dari jumlah ini, kuantitas ekspor baru sekitar 1,5 juta ton per tahun dengan nilai ekspor total mencapai lebih Rp.2 triliun.

Permintaan ekspor cangkang sawit terus meningkat dari tahun ke tahun, khususnya ke negeara-negara industri maju, terutama Jepang. sejak meledaknya PLTN Fukushima akibat gempa dan tsunami tahun 2011 lalu, permintaan cangkang sawit ke Jepang meningkat hingga 40%. Bahkan Jepang telah menandatangani kontrak kerja dengan Indonesia untuk penyediaan cangkang sawit hingga 10 tahun ke depan.

Berdasarkan laporan Kementerian Ekonomi, Perdagangan dan Industri Jepang, tercatat upaya pengelolaan pencampuran sumber daya energi di Negeri Sakura saat ini sudah mencapai 14,6% dalam bentuk Energi Baru dan Terbarukan (EBT) dan akan meningkat menjadi 25% pada 2030. Itu berarti cangkang sawit telah menjadi primadona baru sebagai bahan bakar yang murah, efisien dan ramah lingkungan.

Last February the eKomoditi team assisted with the sourcing of  to a rubber processing plantation in West Kalimantan. The palm oil mill’s location was 5 hours from the nearest city and had a capacity of 60 tons/hour. Using PlantationDirectory.com companies are able to locate commodities as well as sell their commodities on a safe platform. We can help with ensuring the quality and logistics of commodities including palm kernel shell (PKS).

 

Palm Oil Plantation are a very lucrative agricultural business for agriculture entrepreneurs and companies to invest in. The potential in this business makes palm oil one of the largest revenue streams in Indonesia. After the President of Indonesia Mr. Joko Widodo (Jokowi) imposed a moratorium on the land available for plantations, the value of palm oil plantations has increased dramatically.

The following are steps to acquire a palm oil plantation in Indonesia

First, contact a trusted brokerage firm and ask if they have palm oil plantations to sell. Do not contact individual brokers as they may not have the complete detail on specific plantations, and generally they are not clear with the actual relation to the available plantation. Such cases often occur in Indonesia and you should make sure that the plantations have no legal issues.

Second, ask the brokerage firm to do the due diligence so that you avoid future legal issues in Indonesia. A trusted brokerage firm must have qualified survey tools such as drone mapping and a reliable agronomist / business analyst team. Thus, there is a match between the plantation legal documentation and the actual physical plantation.

Third, make sure the selling price of the plantation is fair. Almost all individual brokers markup the original price up to 30%. You should be careful in doing business with these types of individual brokers because of this type of lack of transparency. In this case you need to appoint a trusted agent to represent you in the take-over process. A typical commission fee of 1-3% should be expected from the plantation selling side.

If you are interested in learning more about acquiring a plantation or to inquire about plantations that are available, please email us at info@plantationdirectory.com