Indonesian Palm Oil News (IPO News) – Indonesia’s oil palm plantation sector has long been one of the country’s largest non oil and gas foreign exchange earners and covers vast plantation areas, particularly on the islands of Sumatra and Kalimantan. The demand for heavy equipment in Indonesia’s palm oil plantation sector is expected to continue increasing despite the challenging national economic conditions.

PT Kotrack Machinery Indonesia (PT KMI) is one of Indonesia’s leading heavy equipment manufacturers and the holder of the KOTRACK heavy equipment brand originating from Korea. Its parent company in Korea is a pioneer in the heavy equipment industry. Through the KOTRACK brand, PT KMI continues to grow as a trusted manufacturer of internationally standardized heavy equipment for the palm oil plantation industry and various other sectors in Indonesia.

The heavy equipment industry for Indonesia’s palm oil plantations is expected to continue growing despite facing various challenges amid the current national economic conditions. According to PT KMI, the business prospects for heavy equipment in the palm oil plantation sector are driven by the accelerating trend of plantation mechanization and Indonesia’s vast plantation areas as one of the world’s largest palm oil producers.

To learn more about PT KMI’s business development and its market expansion targets, particularly for Indonesia’s palm oil industry, the following are excerpts from IPO News’ interview with Mr. Bar Sabar Nugroho, Chief Operating Officer (COO) of PT KMI, conducted in mid July 2026.

Please explain the history of the establishment of PT Kotrack Machinery Indonesia (PT KMI) in Indonesia?

“Our company, PT Kotrack Machinery Indonesia (PT KMI), was established on February 14, 2020, by Mr. Lee Hee Jae as Chief Executive Officer (CEO) and Mr. Bar Sabar Nugroho as Chief Operating Officer (COO). PT KMI is directly owned by its holding company in Korea, namely Kotrack Inc.

From the very beginning, PT KMI was established with the objective of supporting the Government of Indonesia in the successful implementation of the national food security program by promoting agricultural mechanization from the preproduction stage through harvesting. Therefore, we continue to develop internationally standardized heavy equipment for the agricultural and plantation sectors”.

Is PT KMI a heavy equipment manufacturer, or does it also serve as the distributor of the KOTRACK brand in Indonesia?

“PT KMI is the manufacturer of KOTRACK heavy equipment, a brand originating from Korea, in Indonesia. However, in conducting its business, PT KMI does not focus solely on manufacturing. The company also acts as the principal/dealer by appointing and managing a network of authorized distributors located in various regions throughout Indonesia to market its products”.

What was the basis for PT KMI’s holding company in Korea in choosing Indonesia as a potential market for marketing plantation heavy equipment?

“The decision of PT KMI’s holding company in South Korea (Kotrack Inc.) to select Indonesia as its primary potential market for plantation heavy equipment was based on the fact that Indonesia is one of the world’s largest palm oil producers and is currently experiencing an accelerating trend toward plantation mechanization due to the increasing need for cost efficiency and labor productivity”.

To what extent has PT KMI contributed to the development of the heavy equipment industry for Indonesia’s palm oil plantations?

“PT KMI’s role in the development of the heavy equipment industry for palm oil plantations extends far beyond manufacturing and distribution. PT KMI also serves as the official supplier of genuine KOTRACK spare parts in Indonesia, ensuring the continuous operation of customers’ equipment in plantation areas that are often located in remote regions.

In addition to ensuring the availability of spare parts, PT KMI’s strategic roles in Indonesia include:

1. Mechanization Solution Provider:

Helping transform palm oil plantations, sugarcane plantations, and various other plantation businesses from manual methods to modern mechanized systems to improve cost efficiency.

2. After-Sales Support Center:

Managing service networks and emergency technical support in key palm oil and sugarcane plantation areas.

3. Education and Training:

Providing regular training for local operators and mechanics on preventive maintenance to extend the service life of heavy equipment investments.

What KOTRACK heavy equipment products are used in Indonesia’s palm oil plantations?

“A number of KOTRACK heavy equipment products are widely used in Indonesia’s palm oil plantations, including :

• Mini Excavator KE 60 (6-ton class), powered by a 48 HP Yanmar engine, Full Cabin–AC, complete with Front Dozer and Piping Kit; KE 75 (7.5-ton class), powered by a 60 HP Yanmar engine, Full Cabin–AC, complete with Front Dozer and Piping Kit.
• Medium Excavator KE 220 (20-ton class) Engine Cummin 6BT 166 HP–AC, Complete with Piping Kit.
• Farm Tractors, ranging from 35 HP, 50 HP, 90 HP, 100 HP, 110 HP, and 130 HP in ROPS/ Canopy models, as well as 110 HP, 130 HP, 150 HP, 180 HP, 220 HP, and 260–300 HP in Cabin–AC models.
• Tractor Implements, including Disc Ploughs, Rotary Tillers, Mowers, Slashers, Post Hole Diggers, Grapples, and Trailers, are also available to support tractor operations.
• DJI Agriculture Drones, designed for spraying, fertilizer spreading, and mapping applications

Which KOTRACK heavy equipment products are currently in the highest demand for Indonesia’s palm oil plantations?

“The highest demand from Indonesia’s palm oil plantation sector is for the Mini Excavator category, particularly the KOTRACK KE 60 (6-ton class) and KOTRACK KE 75 (7.5-ton class). In addition, the LOVOL Farm Tractor series, including the 50 HP, 90 HP, 110 HP, and 150 HP models, is also in high demand”.

To what extent has the sharp increase in the US dollar exchange rate over the past several months affected the selling prices of KOTRACK heavy equipment for palm oil plantations? Has the company been forced to increase its prices?

“As imported heavy equipment based on South Korean technology and components from global manufacturers, the pricing structure of KOTRACK heavy equipment marketed by PT KMI is highly sensitive to fluctuations in foreign exchange rates. However, we also take into consideration the interests of our customers who intend to purchase our equipment. Therefore, we do our best to maintain our prices, and even if there is an increase, it is not significant”.

What strategy has PT KMI implemented to cope with the increase in the US dollar exchange rate, which has resulted in higher operating costs, such as rising fuel prices and the cost of importing spare parts?

“PT KMI has implemented a layered risk management strategy to mitigate the impact of the strengthening US dollar, which has driven up the cost of importing spare parts and increased operational expenses due to fuel price fluctuations.

As the authorized brand holder of KOTRACK in Indonesia, PT KMI focuses on improving internal cost efficiency, optimizing logistics alternatives, and applying financial engineering strategies, without passing the entire increase in costs on to customers purchasing heavy equipment for the palm oil plantation sector”.

To what extent do fluctuations in international CPO prices affect the demand for KOTRACK heavy equipment in Indonesia’s palm oil plantation sector?

“Fluctuations in international Crude Palm Oil (CPO) prices have a significant and direct impact on the demand for KOTRACK heavy equipment in the domestic market. This trend follows the commodity supercycle pattern, whereby changes in the revenues of Indonesia’s CPO producers directly determine their capital expenditure budgets for purchasing heavy equipment. However, as a brand that focuses on cost efficiency, KOTRACK has a unique market absorption dynamic, both when CPO prices increase and when they decline in the global market”.

What are the advantages of KOTRACK heavy equipment for palm oil plantations compared with similar products from competing manufacturers?

“The heavy equipment products we market are developed based on market demand (customer demand) and end user requirements. Some of the advantages of KOTRACK heavy equipment compared with competing brands include: In terms of design, KOTRACK offers a simple yet modern design while prioritizing ease of maintenance and repair. In terms of the engine, our machines are reliable and durable. They are capable of operating under poor fuel conditions and still use a manual system without relying on computerized controls. In terms of maintenance costs, KOTRACK offers affordable spare parts, resulting in low maintenance costs.

Going forward, PT KMI targets all KOTRACK heavy equipment, including those used in palm oil plantations, to be equipped with an Integrated Telematics System that incorporates GPS- and IoT (Internet of Things) based remote monitoring”.

What strategy has PT KMI implemented to compete with other manufacturers producing similar heavy equipment for palm oil plantations?

“We continue to develop PT KMI as a company that manufactures and markets high quality heavy equipment and spare parts, ensures the availability of equipment units and spare parts, offers competitive prices, and provides reliable after sales support, thereby delivering significant benefits to our customers.

PT KMI also continuously strives to improve the quality of its customer services. Our company provides after sales services focusing on the availability of spare parts for the equipment we have sold, as well as mechanical service support. We maintain a centralized spare parts warehouse in Jakarta, supported by several branch offices and dealers in other cities.

Another strategy we implement to compete with other manufacturers is to maintain customer trust by ensuring that the heavy equipment purchased meets customer expectations, namely high productivity, long product life, and efficient operating costs”.

Which companies have become customers of KOTRACK products, particularly palm oil plantation companies in Indonesia?

“Many leading companies in Indonesia’s palm oil plantation industry have become KOTRACK customers, including Gosco, Gama, PT Sinar Mas, APRIL, Asian Agri, HPI Agro, and PT Rajawali”.

What after sales services does PT KMI provide to KOTRACK heavy equipment customers?

“In addition to marketing heavy equipment, PT KMI also provides after sales services focusing on the availability of spare parts for the equipment we have sold, as well as mechanical service support. We operate a centralized spare parts depot in Jakarta, supported by branch offices and dealers in several cities, including Medan, Pekanbaru, Palembang, and Lampung (covering the Sumatra Region); Jakarta, Semarang, and Surabaya (covering the Java Region); Balikpapan (covering the Kalimantan Region); as well as Makassar and Sidrap (covering the Sulawesi Region)”.

Considering the current global geopolitical situation and national economic conditions, what is your outlook for Indonesia’s heavy equipment market particularly for the palm oil plantation sector through the end of 2026?

“Despite the current challenges facing the national economy, I believe that the heavy equipment market for palm oil plantations will not experience a significant decline. This is because the palm oil plantation sector is a strategic pillar of Indonesia’s food and energy security and cannot cease operations even during difficult economic conditions.

Manufacturers that can ensure the rapid availability of locally stocked spare parts and offer cost efficiency, as PT KMI does, are expected to secure a larger market share through the end of 2026”.

What are PT KMI’s expectations of the Government so that Indonesia’s heavy equipment industry can continue to survive amid the current challenging economic conditions?

“PT KMI places great hope in the Government’s policies. Our company expects the Government to introduce adaptive regulations that can help maintain business stability amid the various pressures facing the national economy”.

At the end of the interview, IPO News asked: What are PT KMI’s targets for the development of Indonesia’s heavy equipment industry for palm oil plantations over the next five years?

“PT KMI’s targets for developing its heavy equipment business in Indonesia, particularly for the palm oil plantation sector, over the next five years are as follows:

1. Increasing the Domestic Component Level (TKDN).

A. Local Assembly Target

Optimizing domestic assembly facilities to increase the Domestic Component Level (TKDN) of KOTRACK mini excavators and LOVOL tractors.

B. Component Substitution

Partnering with Indonesia’s metal casting and local component manufacturing industries to produce non-essential spare parts domestically, thereby reducing import dependence and lowering selling prices.

2. Expanding the 3S Network (Sales, Service, and Spare Parts) in Indonesia’s Major Palm Oil Plantation Areas

A. Integrated Regional Network

Establishing new service centers and main spare parts depots in key palm oil plantation regions, particularly in West Kalimantan, Central Kalimantan, and the northern and southern corridors of Sumatra.

B. Rapid Response Target

Ensuring up to 99% availability of fast-moving spare parts at local dealer level and reducing mechanical repair waiting times in remote areas to less than 24 hours.

3. Achieving Market Leadership in the Mini Excavator Segment for Palm Oil Plantations.

A. Market Share Target

Securing a larger market share in the 6-ton to 7.5-ton compact excavator category (KOTRACK KE60 and KE75).

B. Retail and Corporate Market Penetration

Implementing a balanced marketing strategy between large scale fleet sales to multinational palm oil corporations and expanding into the independent smallholder palm oil farmer segment (retail buyers).

4. Fleet Digitalization and Smart Farming Technology.

A. Integrated Telematics System

Integrating GPS and IoT (Internet of Things) based remote monitoring systems into KOTRACK heavy equipment.

B. Improving Plantation Operational Efficiency

This technology is intended to help plantation management monitor fuel consumption in real time, detect potential engine failures at an early stage (predictive maintenance), and digitally monitor equipment productivity based on operating hours in the field.

5. Strategic Partnership in the Smallholder Palm Oil Replanting Program (PSR).

A. Government and Cooperative Partnership

Becoming a key partner of the Palm Oil Plantation Fund Management Agency (BPDPKS) and Village Unit Cooperatives (KUD) in supplying cost-effective heavy equipment for the large-scale replanting program of aging oil palm plantations in various regions.

 

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