Red palm oil to only be produced by cooperatives: Minister

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Cooperatives and Small and Medium Enterprises (SMEs) Minister Teten Masduki stated that red palm cooking oil could only be produced by cooperatives to protect the community business.

“If (big) industries (also) produce it (red palm oil), (the cooperatives’ business) will die,” he remarked at the Cooperatives and SMEs Ministry’s headquarters, here.

However, he is optimistic that large industries would not feel threatened by the existence of the people’s red palm oil (RPO) factory, considering that the big industries’ business focus is crude palm oil (CPO) production.

He highlighted the readiness of 12 cooperatives to produce the RPO in several provinces, including North Sumatra, Riau, Jambi, Lampung, Central Kalimantan, South Kalimantan, and West Kalimantan.

The cooperatives were considered as being capable of processing RPO since they had met the minimum requirements of being able to produce 10 tons of red edible oil from 50 tons of palm oil bunches per day on one thousand hectares of land.

In addition to being used as cooking oil, RPO is useful for the pharmaceuticals sector, as it is rich in vitamin A.

The total capital required to establish an RPO plant is estimated at Rp22 billion (US$1.46 thousand), with a return on investment of 4.5 years.

Meanwhile, the net working costs for each cooperative can reach Rp8 billion-Rp10 billion (US$531 thousand to US$663 thousand) to produce 10 tons of RPO per day.

Regarding the working capital, the minister said that the cooperatives could look for the funding from the Palm Oil Plantation Fund Management Agency (BPDPKS) and the Revolving Fund Management Institution for Micro, Small, and Medium Enterprises (LPDB-KUMKM).

He noted that President Joko Widodo (Jokowi) had called for immediately establishing the RPO plant.

His side expected that an integrated RPO factory, starting from palm oil plantations and processing facilities, could be built at one location to reduce the logistics costs.

He is optimistic that construction of the RPO factory would be a breakthrough to help cooperatives to get involved in the production sector.

“I want to promote red palm cooking oil since it is healthy and nutritious. It is hoped that in January 2023, the (RPO) factory would be constructed, while the cooperative can begin to apply for the factory operation permit,” he added.— ANTARA

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