Wednesday, 16 February 2011
THE NEW RICH FROM COAL AND PALM INDUSTRY
“The coal and palm business yielded enormous profit in the past few years” according to Forbes, who noted that there were 16 top richest men (in Indonesia) who reaped profit 12 billion US dollars or equal to Rp. 109 trillion (rate 1 US$ = 9,100). Increasing price of the two companies and palm operators to be on top of the list of the stockmarket in Indonesia.
The Association of Indonesian Coal Miners (APBI) predicted coal production to reach 300 million tons by 2011. Chairman of APBI Bob Kamandanu stated that, if the production target were realized, it would surpass Government’s target of 250 million tons. In 2010 production of coal could reach 280 million tons. Bob who is also President Director of Berau coal stated that in 2009 production of coal also surpassed government’s target which was also 230 million tons. By end of 2009 production of coal was predicted at 260 million tons.
“Indonesia’s export destination countries are still India, China, and Japan, mostly used for power plants while domestic buyer remains the State Electric Company PLN”. The Director General of Coal Mineral and Thermal Heat Bambang Setiawan disclosed that in 2010 PLN’s consumption of coal increased. Today PLN’s need for coal was around 40-45 million tons, by 2011 would increase to 60-70 million tons.
In 2009 last according to Bambang, Indonesia’s production output of coal was still 230 million tons, of which 6805 million tons was used for domestic consumption of that amount, around 54-46 million tons was allocated for powerhouses.
Meanwhile the Ministry of Agriculture RI estimated production of CPO in 2020 would be 40 million tons the increase would be attained through promoting quality of premium palm seed, not through land expansion.
Deputy Ministry of Agriculture Bayu Krisnamukti stated that in 2010 production of CPO was posted at around 20 million tons. In the next ten years, through quality and productivity of premium palm seeds CPO production was projected to reach 40 million tons.
“So if production output of CPO were to be doubled through the use of highly productive premium seeds, now is the time for rejuvenation of plantations” Bayu was quoted as saying at the Ministrial Building in Jakarta. According to Bayu, rejuvenation of palm plantation was estimated to cover areas of 250 to 300 thousand hectares of land per year. Naturally the rejuvenation project would need enormous quantity of seeds of high quality as well.
At the same opportunity the Directorate General of Plantation, Ministry of Agriculture of RI Achmad Mangga Barani stated that in the future development of CPO would be focused on efforts to intensify existing soil and to limit plantation expansions. Expansion would still be necessary, but not related to the effort to attain the target of 40 million tons of CPO in 2020. the Government planned to develop CPO industry through intensification, not extensification.
By 2020, according to Mangga Barani with CPO production attained at 40 million tons, total area of plantation would reach 9.127 million hectares, with soil productivity of 4.5 tons per hectare. Furthermore he disclosed, by 2010 total plantation are was only posted at 8.127 million hectares producing 23.199 tons of CPI, meaning productivity of palm plantations would be 3.717 tons per hectare.
Meanwhile Secretary General of the Association of Indonesian Palm Producers (GAPKI) Joko Supriyono reminded the Government to protect and support the palm industry sector considering the tremendous potentials. By calculation, demand for CPO would accelerate faster than production which meant that market opportunity would remain to be highly prospective and selling price would remain to be highly prospective and selling price would remain high.
Production increase and rising price of coal and palm automatically jacked up wealth status of Indonesian businesspeople fantastically. An example was Martua Situros whose wealth in 2008 was “only” US$ 55 million, but his owner of Wilmar International who ran business in palm increased his income impressively to US$ 55 million, but his owner of Wilmar International who ran business in palm increased his income impressively to US$ 3.2 billion. Another businessman who reaped profit from the same field was Eka Tjipta Widjaja who ranked third as Indonesia’s richest man. Eka Tjipta Widjuan ran business through his son Franky, owner of Golden Agri Resources. Eka Tjipta Widjaja’s wealth was now US$ 6 billion or equal to around Rp. 54.6 trillion. A businessman in cal mining industry and also politician Aburizal Bakrie was in 10th position with wealth posted at US$ 2.1 billion.
Chief Editorial Advisor of Forbes Indonesia disclosed that there were seven newcomers in the coal industry sector of palm sector who were included in the list of 40 richest men in Indonesia including Sandiaga Uno and Agus Sudwikatmono.
Somehow the coal industry, while being dominated by a few profit makers, still leave room for new players to pursue business in the field. Although the number of entrepreneurs constituted only 0.24% of total workforce, their “achievements” in tapping wealth of resources were not to be under estimated. Coordinating Minister of Economy Hatta Rajasa disclosed that the number of businesspeople constituted only 0.24 percent of total people of the productive age bracket, the number of entrepreneurs were only 564 thousand or around 0.24 percent” he stated in a presentation at the SMESCO UKM Jakarta.
The situation in Indonesia, according to Hatta, was different from that in other countries. Supposedly the number of entrepreneurs in a country constituted only 5 percent of population. He mentioned that in America the number of businesspeople constituted 11.5 to 12 percent. Singapore 7 percent, China 10 percent, India 10 percent and G-20 states 5 percent on the average. For new candidate entrepreneurs Hatta pled to be highly motivated and determined, those were important qualities needed in running business. He further said “Never think that we are not born as entrepreneurs, that’s wrong”.