Indonesian Palm Oil News (IPO News) – Oleochemicals are chemical products based on nature, biodegradable oils and vegetable fats or animal sources. Versatility makes them ideal for high performance products in many applications such as cleaning tools, detergents, jet engine lubricants, engineering plastics, cosmetics and pharmaceutical products, and others.
Role of Oleochemical Industry in National Industrial Structure
The existence of the palm oil industry and its derivatives is considered to be strategic for the national economy. The palm oil industry and its derivatives are also considered to be capable of building food security and energy sovereignty and they are currently being encouraged to develop downstream to boost domestic economic activity. The palm oil industry and its derivatives have grown rapidly, expanding in both upstream and downstream. Up to present, oil palm plantations and palm oil mills have spread to more than 200 districts in Indonesia. The production of crude palm oil (CPO), palm kernel oil (PKO), and biomass has become the backbone of the economy for these central areas of the palm oil industry. The downstream sector of palm oil is also developing with processed products, both semi-finished and finished products, including the oleo food industry, oleochemical industry, biolubricant, biopharmaceutical, and bioenergy (biodiesel, biopremium, bioavtur). The palm oil industry is also able to revive other service sectors including trade.
According to the Secretary General of the Indonesian Palm Oil Association (GAPKI), said that until now, palm derivative products, including oleochemicals, have penetrated the fields of food, beauty, medicine or health nutrition, hygiene, and even energy for fuel to electricity. Besides being able to be processed into diesel fuel, in further development it can also be processed into gasoline and avtur. Currently, Indonesia’s CPO products and their derivatives reaching 70% of the total production per year are exported for global needs.
More than 50% is used by the international community for food needs while the rest is used as raw material for cosmetics and beauty products, medicines, cleaners, and others, even for biofuel needs in other countries. From the total exports, some 80% are in the form of CPO derivative products. Finance Minister Sri Mulyani Indrawati said the palm oil industry and its derivatives have contributed more than 14 percent of the total non-oil and gas export foreign exchange earnings. Palm oil is also used by the government to reduce dependence on oil imports through the biodiesel program. Therefore, Indonesia still has to keep on developing the downstream palm oil industry to encourage an increase in domestic economic activities.
This no only increases economic value, but also creates job opportunities and independence for the food sector and others. The palm oil industry and its derivatives are considered to be capable of becoming a big-push industry which also has a big impact on the Indonesian economy. This industry has opened up quite a lot of job opportunities and even it was not affected by the pandemic which caused workers’ laying off, and it has earned great export foreign exchange.
Read more… Read on July 2024 Edition
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