The Outline

Developing Indonesia Downstream Industry :

Potential and Challenge

Income Per Capita & Fuel Consumption Comparison

Government Policy

Managing Market, Strengthening Industry Value Chain

Palm Oil Industry

9th Indonesian Palm Oil Conference and 2014 Price Outlook,
28th-29th November 2013. Bandung. Indonesia

Down Stream Development

Year of Challenge
What should to be done

Paulus Tjakrawan
Indonesia Biofuels Producer Association
Asosiasi Produsen Biofuel Indonesia

Comparison

National Development Policy

Population

GDP/Capita- US$

China

China

US

US

EU

EU

9,300

ENERGY & FOOD

SECURITY

COMPARISON

Russia

Russia
Indonesia
-

248
Million
1,000,000,000 2,000,000,000

Indonesia

4,700
-

20,000

40,000

60,000

Oil Consumption/Capita/Day-Lt
China

GORVERNMENT POLICY

1,349
Million

1.15

US

NATIONAL DEVELOPMENT
FOCUS ON :

JOB CREATION &

POVERTY ALLEVIATION

ENVIRONMENT

EU
Russia
Indonesia

0.83
0.00

2.00

4.00

6.00

8.00 10.00 12.00

Source, MEMR

Source. CIA Fact Book 2013

Palm Oil Industries & Supporting Association

Palm Oil Product Stages

Process Stages
Feedstock

Plantations

Palm Oil Mills

RFM
Oleochemicals
Biodiesel + HVC

APKASINDO

GIMNI, AIMMI
APOLIN
APROBI

GAPKI & GPPI

MAKSI & DMSI

Source. GIMNI

Association
GAPKI &
APKASINDO

Fruit Bunch, Palm Kernel, Crude Palm Oil (CPO)

Palm Kernel Mill/Expeller, CP Stearin, CP Palm Olein, CP Kernel

1st Stage Downstream
Olein, CP Kernel Stearine, RBD Palm Stearin, RBD Palm Oil, RBD
GIMNI/AIMMI
Product
Palm Kernel Oil, PFAD
RBD Palm Olein bulk and packaging </= 25kg, RBD Palm Kernel
GIMNI/AIMMI
2nd Stage Downstream Stearin
Product
Biodiesel and Glycerine
APROBI

PALM OIL INDUSTRY

PALM OIL INDUSTRY

DownStream
Industries

Product

Margarine, Shortening, Soap, Special Fats (CBS, CBA)

GIMNI/AIMMI
Lauric Acid (surfactants), Plasticizers, Palmitic Acid (candle,
crayon), Stearic Acid (rubber grade), Stearic Acid (stabilizers,
coating), Oleic acids (surfactants), MCT (Pharmaceuticals), PK
APOLIN
Diethonamide
(foam
booster),
Alcohols
(detergents),
3rd and 4th Stages
Downstream Products Monodiglycerides (stabilizer)
Methane gas, Hydrogen, Renewable Electricity, Pulp/paper, Bricket
H. Carbon, Bio-lubricant, Particle Board, Anti oxydants (BHVCP
carotene, Tocopherols, Tocotrienols), Surfactant, Bioavtur (fuel Associations
jet), Bio-plastics and Bio-chemicals
Source. GIMNI

Refinery, Fractionation & Modification.

Production Capacity (000 Ton, Installed & Projection*)

Oleochemical Production Capacity

(000 Ton, Installed & Projection)
6000

PALM OIL INDUSTRY

50,000

45,100

40,000
30,000
21,600

23,500

22,000

20,000
10,000
2011

2012

2013

2011
RFM (000Ton)

21,600

2012
22,000

2013
23,500

DOWNSTREAM INDUSTRY

5000

Refinery, Fractionation & Modification Production Capacity

(Installed & Projection)

2014*

4000
3000

Fatty Alcohol

2000

Fatty Acid

1000
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
PO Oleochemicals Production Capacity (Installed and Projection)
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

2014*
45,100

Source. GIMNI

Fatty Acid

565 565 860 860 970

970 1470 2060 2530 2940 3925 4225

Fatty Alcohol

120 120 180 280 280

280 280

315

570 690

690

790

Source. APOLIN

Biodiesel Production Capacity

Fast Growing Palm Oil Downstream Industry

(Kl, Installed)

2007

1,709,195

Biodiesel Production Capacity (Installed)

6,000,000

5,670,000
4,880,966

5,000,000
2008

3,137,931

2009

3,528,092

2010

3,936,138

2011

4,280,966

2012

4,880,966

2013

5,670,000

4,280,966

4,000,000

3,936,138
3,528,092
3,137,931

3,000,000
2,000,000
1,000,000

1,709,195

214,943

2006

2007

2008

2009

2010

2011

2012

2013

Source. MEMR, APROBI

After 2011, the PO Downstream Industry increased steeply, it was

triggered by
Ministry of Finance regulation, PMK No. 128/PMK 011/2011 which
was renewed Export Duty regulation, It was projected to protect the
PO domestic demand mostly for the cooking oil. The PO cooking oil is
our staple food. Also, this fiscal policy intentionally to
encourage/boost the downstream industry.
Government driven to enlarge the incentive as a tax holiday for the
investment more than 100Million USD. This incentive increases the
interest of investors to invest in downstream industries.
Biofuels mandatory
An estimated investment till 2014 about USD 2.7 billion

DOWNSTREAM INDUSTRY

214,943

DOWNSTREAM INDUSTRY

2006

Source. GIMNI, APROBI

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Biofuel Mandatory

Indonesia Palm Oil Profile ( 000Ton)

AS ENERGY AND MINERAL RESOURCES MINISTER REGULATION NO 25, 2013

35,000
30,000

15,000
10,000
5,000

Export CPO
Export Biodiesel
Export Non Biodiesel
Biodiesel
Non Food
Food

2009

2010

Domestic
Food
2009
2010
2011
2012
2013

4,835
5,415
5,600

2011

2012

2013

Export,
Export
Total
Export
Downstream
Export CPO
Downstream
Production
Biodiesel
Product
Non Biodiesel
7,296
10,870
23,246
40.1%
7,591
11,137
24,835
40.5%
1,070 12,295
26,784
40.2%
300
7,208
1,372
8,095
28,022
61.1%
582
11,386
1,020
12,086
1,500
8,114
29,550
62.6%

Non Food Biodiesel

5,081
6,107
1,075
1,172
1,231

BIOETHANOL (Minimum)
Sector
Transportation,

Sept.2013

Jan 2014

Jan. 2015

Jan. 2016

Jan. 2020

Jan. 2025

0.5%

1%

2%

5%

20%

1%

1%

2%

5%

10%

20%

1%

2%

5%

10%

20%

DOWNSTREAM INDUSTRY

20,000

DOWNSTREAM INDUSTRY

E
X
P
O
R
T

25,000

Public Service Obligation

(PSO)

Transportation,
Non PSO
Industry

BIODIESEL (Minimum)
Sector
Transportation,

Sept.2013

Jan. 2014

Jan. 2015

Jan. 2016

Jan. 2020

Jan. 2025

10%

10%

10%

20%

20%

25%

3%

10%

10%

20%

20%

25%

Public Service Obligation

(PSO)

Transportation,
Non PSO
Industry
Electricity

5%

10%

10%

20%

20%

25%

7.5%

20%

25%

30%

30%

30%

Source. GIMNI

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Biodiesel Production

Export

35%
8,2%
80%
69,7%
61%

2013*) PROJECTION

Source, Pertamina, BPS, EBTKE, Aprobi

Domestic Biodiesel Utilization,

669.328 kilo liter/ 4,2 MBarel

Reducing Diesel Oil Import
6,4%
Up Stream Manpower

48.500
Emmission Reduction

1.672.652 Ton CO2 (5%)

Export Ability 2013

3.5 mil. kl
Source, Pertamina, APROBI, US EPA

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14

Palm Oil Biodiesel Emission Reduction

Biodiesel Programs

Compare to Diesel Fuels

Emission Reduction
56,7% - 59,8%
56%

B10 for subsidized diesel fuel in Jawa, Sumatra, Bali, Madura

and Part of Kalimantan
The Electric Power Companies started to use Biodiesel and PPO
(Processed Palm Oil), from 10% till 60% blended in the diesel
Fuel.
It is planned to have B10 for subsidized and non subsidized
diesel in 2014. It will consume about 4 million kl (~3.5 million
Ton) Biodiesel.
Challenges

DOWNSTREAM INDUSTRY

Indonesia Palm Oil Board

DOWNSTREAM INDUSTRY

Research & Calculate by,

Ministry of Agriculture

DOWNSTREAM INDUSTRY

2009
2010
2011
2012
2013*)

Indonesia Biodiesel Production (Volume)

Domestic
Export
Total
000 kl
000 kl
Production
000 kl
130
70
200
223
20
243
359
1,453
1,812
669
1,542
2,211
1,200
1,600
2,800

DOWNSTREAM INDUSTRY

Year

Indonesia Biodiesel Fact 2012

Location. Most of the industries located in west Indonesia

Price. Pertamina. State own Oil Company requests the biodiesel industries
to supply biodiesel using different price (must be less than diesel fuels
Singapore price for 2 years) than the Government regulated biofuels index
price.

Source, MoA, IPOB, IBPA

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16

Downstream Industry Outlook

Year of Challenge

To produce the High Value Chain Products

Year 2014 will be a Year of Challenge for palm oil in the global market.
Palm oil and its derivatives export destination will implement a number of
regulations that suppress Indonesian products.

One is the EU regulations concerning the obligation to include the name of palm
oil on the label, which will take effect on December 13, 2014.

Other European countries such as Belgium, the Netherlands, Germany and

France are also only willing to buy the oil that has been certified by RSPO
(Roundtable on Sustainable Palm Oil) and Impose Anti-Dumping Duty on Fatty
Alcohols (in EU) and Biodiesel. Renewable Energy Directive revision.

US EPA NODA, that the reduction of emissions by Palm Oil biodiesel is only 17%,
whereas the requirement is stated to be 20% in order to be accepted in the USA.
Indonesia and Malaysia already submitted the life cycle emission calculation to
US EPA, Which is 59% for the emission saving.

Small holders low productivity, replanting, land and sustainability certifications

Implementation of B10 in Indonesia

YEAR OF CHALLENGE

DOWNSTREAM INDUSTRY

The Industries focus on the processing of "Liquid and

Solid Waste" and other high value-added, such as
Reduced-GHG-Emission" bio-plastics, particle board,
extracting beta-carotene, hydrogenation biodiesel, biolubricants, aviation (jet) fuel etc..

Source. GIMNI, APROBI

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17

What Should To Be Done?

WHAT SHOULD TO BE DONE

Government consistency to implement the regulations

Proper Infrastructure (Road and Port)
Reliable workforce and empowering small holders supporting by Export duty
Tax and incentive simplification
Intensified countering the anti palm oil campaign
Handling and straighten the Environment, Social & Heath Issues
To have the comprehensive research on Palm Oil

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Indonesia Biofuels Producer Association/IBPA

Asosiasi Produsen Biofuel Indonesia/APROBI
5th Fl. Unit B-C, 88@Casablanca Office Tower A
Jl. Casablanca Kav. 88
Jakarta Selatan 12870
T +6221 2956 8736
F +6221 2956 8697
Email, aprobi@ymail.com

THANKYOU & HAVE A NICE DAY

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