Golden Agri-Resources to build two biodiesel plants in Indonesia

Singapore-listed Golden Agri-Resources Ltd., the world’s second largest plantation company, is investing USD 150 million in two biodiesel plants in Indonesia. The plants, with a combined capacity of 300,000 tonnes per annum, will be built in Marunda, North Jakarta and Tarjun in South Kalimantan. Construction is expected to be completed by next year.

“The construction for one of the plants started earlier so it is expected to be fully completed in the first half [of next year] while the second one has just started recently so it will be done toward the second half,” said Richard Fung, head of investor relations.

Fung pointed out that these two projects will benefit from the Indonesian government’s policy objective of increasing biodiesel use. The government plans to raise the biodiesel blend in petroleum diesel from 10% to 15%, to boost domestic palm oil consumption. Indonesia is the world’s largest producer of palm oil.

Earlier, the government established a Crude Palm Oil (CPO) Fund to support biodiesel development in the country. The government expects to collect up to IDR 10 trillion (USD 714 million) per year from the export levy to fund this effort.

Golden Agri-Resources Ltd., whose subsidiary Sinar Mas Agri-Resources and Technology (SMART) is listed in the Indonesia Stock Exchange (IDX), operates a 460,000-hectare palm plantation. The company has recently started using a new kernel crushing plant with a capacity of 270,000 tonnes per annum and has expanded its downstream capacity by 300,000 tonnes per annum to produce a total of 3.8 million tonnes.