Bahan Paparan Pak Erik Tohir Proofed, Exe Summ Checked.pptx

Oil Palm Development in Borneo Borders

1. OIL PALM DEVELOPMENT IN BORNEO BORDERS INDONESIA - MALAYSIA

2. Executive Summary Oil Palm is the world's main source of vegetable oil due to the highest efficiency in land usage compared to soybean, rapeseed, and sunflower oil. Indonesia and Malaysia are the world's largest producers and exporters of Crude Palm Oil, contributing up to 87% (66.9 Mio Tons) of the total world production, in which Indonesia and Malaysia produce 62% (47.63 Mio Tons) and 25% (19,27 Mio Tons), respectively. Kalimantan Island is one of the biggest oil palm planted areas in both countries. The Indonesia-Malaysia border area in Kalimantan island shows great potential for palm oil industrial development, covering upstream and downstream industries, as supported by land suitability, agri -climate, and social environment of the community. Within the Indonesian border area, there are about ​​1.7 Mio Hectares of suitable land for oil palm plantations. Therefore, enhancements of cooperation in the development of oil palm between Indonesia and Malaysia become important. The collaboration along the border area will give benefit in strengthening bilateral relations between Indonesia and Malaysia, protecting natural resources, improving the security and the economy of the community, supporting growth trends of palm oil price and demand, developing oil palm plantations, and a step to achieve palm oil sustainability; which is a solution to border problems related to social, economic, cultural, environmental, and border security issues between two countries. From the economic aspect, the collaboration in oil palm development will provide benefits including equitable welfare distribution, spillover to the development of the regional economy, and expanding value chain and industrialization. The potential areas of collaboration in the development of oil palm agribusiness between Indonesia and Malaysia along border areas include oil palm plantation development, downstream industries, community development, research and development for sustainable palm oil, technologies transfer, and integrated market between the countries. The Indonesia - Malaysia collaboration in oil palm industries involving the private sector has been long established. Notably, for the one in the development of oil palm along with the border areas, PTPN III has a great potential to be involved considering its infrastructure possession in the Kalimantan areas with 13 plantations (​​+56,000 Ha) and 7 palm oil mills with a capacity of 395 Tons/Hours. PTPN III is a State-Owned company under the Ministry of State-Owned Enterprises (BUMN) engaged in plantation, processing (for intermediate and final products), and marketing of estate commodities including oil palm, rubber, and sugar, tea, coffee, and cocoa. Currently, PTPN III has fostered B2B cooperation with Kuala Lumpur Kepong Berhad and Sime Darby Oil Sei Mangkei Refinery.

3. BACKGROUND Strengthening bilateral relations between Indonesia and Malaysia As a solution to border problems related to social, economic, cultural, regional, environmental, and border security issues between countries Palm oil price and demand growth trends Protecting natural resources in border areas Improving the security and the economy of the community in border areas Developing oil palm plantations at potential border areas Step to achieve sustainability palm oil

4. POTENTIAL BENEFIT OF OIL PALM DEVELOPMENT IN BORNEO BORDERS

5. LAND POTENTIAL FOR OIL PALM DEVELOPMENT SLOPE CLIMATE SOIL Rainfall : 2.000-4.000 mm Dry period : 2-3 months Ultisols / Oxisols /Spodosols (sediment) Inceptisols / Entisols (alluvium) Histosols (organic) LAND SUITABILITY Flat to Moderately Sloping (Slope 0-15%) Hilly (Slope 15-30%) Moderately Steep to Steep (Slope 30-65%)

6. INDONESIA – MALAYSIA PALM OIL PROFILE Oil Palm Mature Area Development Palm Oil Crops and Yields Source : Oil World (2021) Share of Palm Oil Production 2021 17 Oils & Fats Production 2021 242,33 Mio Tons 76,83 Mio Tons 94,54 Mio Tons 17 Oils & Fats Export 2021 Palm Oil Export of Key Countries 2021

7. POTENTIAL OF PALM OIL DEVELOPMENT IN INDONESIA Indonesia Palm Oil Balance (CPO + PKO) Indonesian Palm Oil Export to Malaysia Source : ITC Trade Map(2022) Source : Directorate General of Estate 2021 Source : PTPN XIII, Directorate General of Esrtate 2021 PTPN XIII 17,6K farmers ( hof ) ; 60,52K labours 162,3K farmers ( hof ) ; 743,8K labours Palm Oil Area in Border Provinces (1000 ha) Total Area : + 55.849 Ha (13 Plantation) Palm Oil Mill : 7 Units (Cap : 395 Ton/ Hr )

8. BUSINESS TO BUSINESS POTENTIAL COLLABORATION Oil Palm Plantation Development Community Development Research and Development in Sustainable Palm oil Development Downstream Industry Development Technologies transfer between countries Integrated market

9. BUSINESS TO BUSINESS EXISTING COLLABORATION PTPN II - KUALA LUMPUR KEPONG Plantation Holding Bhd (KLKPH) PT SIMEDARBY OILS SEI MANGKEI REFINERY Area 160.000 M2 (16 Ha) Industrial Profile Palm Oil Derivatives Industry Refinery Kernel Crushing Plant Operational Plan : Q4 - 2023 Commodities : CPO 1500 Ton/ Day CPKO 600 Ton/ Day PK 300 Ton/ Day Estimated Labour Absorption : 250 labours Investment Commitment : 1,8 T Export Potential : ± USD 2,4 JT Joint Venture Agreement 60% Investment 40% Investment Operational Cooperation for 30 years (since July 9 th 2009) Operate oil palm plantation 20.000 ha

10. TERIMA KASIH

11. Executive Summary Kelapa Sawit merupakan sumber utama minyak nabati dunia dengan efisiensi penggunaan lahan yang paling tinggi dibandingkan dengan soybean, rapeseed, dan sunflower oil. Indonesia dan Malaysia merupakan produsen dan eksportir CPO terbesar dunia dengan kontribusi mencapai 87% dimana lokasi penanamannya banyak dilakukan di pulau Kalimantan. Areal Perbatasan Indonesia-Malaysia di pulau Kalimantan memiliki potensi yang besar untuk pengembangan industri (Upstream-Downstream) kelapa sawit yang didukung oleh kesesuaian lahan , agroklimat , dan lingkungan sosial masyarakat . Di dalam wilayah perbatasan Indonesia terdapat lahan seluas 1.7Mio Hectares (Suitable Lands) untuk perkebunan kelapa sawit . Kerja sama pengembangan kelapa sawit di perbatasan INA-MLY akan Strengthening bilateral relations between Indonesia and Malaysia, Protecting natural resources in border areas, Improving the security and the economy of the community in border areas, Palm oil price and demand growth trends, As a solution to border problems related to social, economic, cultural, regional, environmental, and border security issues between countries, Developing oil palm plantations at potential border areas, Step to achieve sustainability palm oil. Dari aspek ekonomi , kerja sama pengembangan kelapa sawit tersebut akan memberikan manfaat diantaranya : Equitable welfare distribution, Spillover to Development of regional economy, and Expand value chain and industrialization. Bidang kerja sama yang potensial dalam pengembangan agribisnis kelapa sawit di perbatasan INA-MLY meliputi : Oil Palm Plantation Development, Downstream Industry Development, Community Development, Research and Development in Sustainable Palm oil Development, Technologies transfer between countries, Integrated market. Kerja sama INA-MLY di bidang private sector di perkelapa sawitan telah lama terjalin . Khusus untuk pengembangan di wilayah perbatasan , PTPN III memiliki potensi besar untuk terlibat dalam kerja sama tersebut dengan mempertimbangkan telah memiliki infrastruktur di wilayah Kalimantan berupa 13 perkebunan dengan luas 56.000 Ha dan 7 Palm Oil Mill dengan kapasitas 395 Ton/Hrs. PTPN III adalah State-Owned Company yang bergerak dibidang Plantation, Processing (for Intermediate and Final Products), and Marketing untuk komoditas Kelapa Sawit , Karet , Gula, Teh , Kopi, Dan Kakao. Saat ini PTPN III telah membina kerja sama B2B dengan pihak Kuala Lumpur Kepong Berhad dan Sime Darby Oil Sei Mangkei Refinery.