JAKARTA: Felda Global Venture Holdings Bhd (FGV) will lead efforts to develop a special economic zone for palm oil downstream processing in Indonesia.
Deputy Minister in the Prime Minister’s Department Datuk Razali Ibrahim said discussions on the project with the Indonesian government began yesterday, specifically on the setting up of a team to identify a suitable site and determine the investment value and other matters.
He said Malaysia would contribute research and development expertise through FGV and later form a joint venture with Indonesia’s Rajawali Group to set up the special zone.
“The team is identifying a site for the special zone which is expected to become a reality in 18 months, and it will be one of a kind in the world,” he told reporters after attending a meeting on the project here yesterday.
The Indonesian government is evaluating five potential sites with a port and airport – Balikpapan, Surabaya, Papua, Jayapura and Dumai.
Razali said the project, which recognised Malaysia’s expertise in palm oil downstream processing, would make Indonesia the world’s largest oil palm hub.
The two countries together account for 85% of global palm oil production.
Meanwhile, adviser to Indonesia’s Coordinating Minister for Economic Affairs Lin Che Wei said the republic previously focused too much on oil palm exports while importing donwstream products.
He said the two countries need not compete with each other in the oil palm industry but could instead share experiences and expertise to create the special zone. – Bernama