1 Introduction
41
and 17.9 million tons of CPO derivatives produced by refinery industries. This condition was very different from that of Indonesia with 40.34% export in the form of
CPO and only 59.38% in the form of downstream products.
With the production target of 40 million tons in 2020, it is necessary that Indonesia
develop its palm oil downstream industries, improve its export and create new markets
for its palm oil and palm oil derivatives in order to avoid excess supply of palm oil.
The development of palm oil downstream industry plays a significant role in the
national economy, especially as foreign currency generator which can contribute to
national GDP by 4.5%, provide employment for about 3.3 million families or 13.2
million people. In the future, the need for food, feed and fuel is increasing which,
consequently, will make the need for raw materials to produce them increase and oil
palm has big potential to provide those materials.
1.2.2.6 Consumption Development of Palm Oil Derivatives
In the last decade, the development of the palm cooking oil industry was found to
occur in line with the shift of public consumption patterns from coconut cooking
oil to palm cooking oil. Indonesian Association of Plant Oil Industry (GIMNI),
with the assumption of 240 million populations, reported a total domestic consumption of cooking oil of 3.24 million tons in 2010 with the average consumption of 13.5 kg/capita/year. This consumption was estimated to slightly increase to
13.6 kg/year in 2011 making up the total domestic consumption of cooking oil of
3.26 million tons. This might be caused by the lower buying power of Indonesian
people.
Cooking oil consumption in the USA and Europe was about 55 kg/capita/year
and in China and India was 20 kg/capita/year. If cooking oil consumption is
20 kg/capita/year, the total domestic cooking oil consumption can reach 4.8 million
tons. As cooking oil is a normal consumer good, this figure will be easily obtained
if there is an increase in people’s average income.
Consumers of oleochemicals in the form of fatty acid are producers of soap
and detergent, intermediates, plastic, rubber, paper, lubricant, coating, personal care
products, food and feed, candles, etc., with their shares as seen in Fig. 1.2.
Fatty alcohol markets include producers of soap and detergent, personal care
products, lubricants, amines, etc., with their shares as can be seen in Fig. 1.3. More
than two-thirds or about 80% of fatty acid was used as feedstock for surfactant
production. As the processing industry of fatty alcohol into surfactants in Indonesia
is still limited, most fatty alcohol produced in this country is exported to the global
market.
Market opportunity for biodiesel is domestic consumption and export. Domestic
consumption is estimated to keep increasing after the issuance of the Regulation
of Ministry of Energy and Mineral Resources Number 32 Year 2008. According to
this regulation, the utilization of plant oil by 20% for biodiesel, 15% for bioethanol
and 10% for PPO is mandatory in 2025. This regulation is valid for the utilization
of biodiesel in transportation as part of Public Service Obligation (PSO), non-PSO
41
and 17.9 million tons of CPO derivatives produced by refinery industries. This condition was very different from that of Indonesia with 40.34% export in the form of
CPO and only 59.38% in the form of downstream products.
With the production target of 40 million tons in 2020, it is necessary that Indonesia
develop its palm oil downstream industries, improve its export and create new markets
for its palm oil and palm oil derivatives in order to avoid excess supply of palm oil.
The development of palm oil downstream industry plays a significant role in the
national economy, especially as foreign currency generator which can contribute to
national GDP by 4.5%, provide employment for about 3.3 million families or 13.2
million people. In the future, the need for food, feed and fuel is increasing which,
consequently, will make the need for raw materials to produce them increase and oil
palm has big potential to provide those materials.
1.2.2.6 Consumption Development of Palm Oil Derivatives
In the last decade, the development of the palm cooking oil industry was found to
occur in line with the shift of public consumption patterns from coconut cooking
oil to palm cooking oil. Indonesian Association of Plant Oil Industry (GIMNI),
with the assumption of 240 million populations, reported a total domestic consumption of cooking oil of 3.24 million tons in 2010 with the average consumption of 13.5 kg/capita/year. This consumption was estimated to slightly increase to
13.6 kg/year in 2011 making up the total domestic consumption of cooking oil of
3.26 million tons. This might be caused by the lower buying power of Indonesian
people.
Cooking oil consumption in the USA and Europe was about 55 kg/capita/year
and in China and India was 20 kg/capita/year. If cooking oil consumption is
20 kg/capita/year, the total domestic cooking oil consumption can reach 4.8 million
tons. As cooking oil is a normal consumer good, this figure will be easily obtained
if there is an increase in people’s average income.
Consumers of oleochemicals in the form of fatty acid are producers of soap
and detergent, intermediates, plastic, rubber, paper, lubricant, coating, personal care
products, food and feed, candles, etc., with their shares as seen in Fig. 1.2.
Fatty alcohol markets include producers of soap and detergent, personal care
products, lubricants, amines, etc., with their shares as can be seen in Fig. 1.3. More
than two-thirds or about 80% of fatty acid was used as feedstock for surfactant
production. As the processing industry of fatty alcohol into surfactants in Indonesia
is still limited, most fatty alcohol produced in this country is exported to the global
market.
Market opportunity for biodiesel is domestic consumption and export. Domestic
consumption is estimated to keep increasing after the issuance of the Regulation
of Ministry of Energy and Mineral Resources Number 32 Year 2008. According to
this regulation, the utilization of plant oil by 20% for biodiesel, 15% for bioethanol
and 10% for PPO is mandatory in 2025. This regulation is valid for the utilization
of biodiesel in transportation as part of Public Service Obligation (PSO), non-PSO