Indonesia- PT Perkebunan Nusantara Holding company (PTPN) will inaugurate two new offices in Cairo, Egypt and Dubai, the UAE, Arif Budiman, the company’s senior Vice President of Marketing department told Daily News Egypt (DNE), adding that his company aims to open direct access to its clients in the Middle East region.
“Egypt imports about 70% of its coffee needs from Indonesian traders who purchase from our company and sell to Egyptian traders. We want direct access to Egyptian clients,” explained Budiman.
PTPN’s investments are worth about $66bn, said Budiman, noting, “we don’t have branches outside Indonesia as we produce tropical products that need certain conditions to grow, so it impossible to invest in plantations in Egypt due to the different climate.”
The company exports limited amounts of crude palm oil to Egypt, said Budiman, noting, “exported palm oil to Egypt depends on tenders offered, and the country’s demand, as palm oil is not very commonly used in Egypt. However, it is used in several different ways instead of in food.”
Notably, palm oil products are used in consumer retail food and fast food manufacturers, personal care and cosmetics products, biofuel and energy products, animal feed products, pharmaceuticals, industrial utilization, food services as well as the service industry.
Palm oil applications vary widely because they can be processed and blended to produce a vast range of products with different characteristics.
PTPN is currently negotiating with Arma group to export 5,000 tonnes of Indonesian palm oil to Egypt on a monthly basis, said Budiman, adding that his company is conducting negotiations with other Egyptian companies to directly export Indonesian coffee.
Budiman clarified that the current negotiations with Egyptian private sector companies began when a business delegation from the company visited Egypt early October, noting that Egyptian markets possess great potential.
From 7 to 10 October, an Indonesian delegation from PTPN visited Egypt, sources from Indonesia’s embassy to Cairo told DNE early October, noting that the company is a fully state-owned enterprise engaged in Indonesia’s agriculture sector.
PTPN’s visit aimed to explore potential opportunities for the enhancement of Indonesian-Egyptian bilateral trade cooperation especially in commodities which PTPN trades in, said the sources, adding that Crude palm oil (CPO), palm kernel oil (PKO), palm kernel (PK), palm kernel meal (PKM), tea, coffee, cacao, as well as rubber, gloves are the main commodities which PTPN trades in.
During PTPN’s recent visit, Indonesia’s embassy in Cairo, organised a business meeting with a delegation from PTPN and Egyptian counterparts to discuss boosting joint cooperation. Meanwhile in July, Indonesian ambassador to Egypt, Helmy Fauzi, expected a 10% increase in the bilateral trade exchange between his country and Egypt by the end of 2018, noting that the annual average of bilateral trade registers approximately $1.5bn.
The company’s main markets for exporting palm oil products are India, China, European countries. On the other hand, rubber products are exported to China, the US, India, Japan, Belgium, and Taiwan, mentioned Budiman.
Additionally, Budiman declared that his company’s revenues were $3bn in 2017, mentioning that it aims to achieving 10% revenues increase by the end of 2018.
PTPN includes 14 affiliated companies which are established all over Indonesia, added Budiman, noting that his company mainly produces palm oil products as well as sugar.
“The first PTPN company is in Aceh and produces palm oil and rubber. The second PTPN company is in North Sumatra and produces sugar and palm oil. The third PTPN company is in North Sumatra and produces palm oil and rubber. The forth PTPN company is in North Sumatra and mainly produces palm oil and tea. The fifth PTPN company is in Riau and also produces palm oil and rubber,” said Budiman.
Budiman elaborated that the sixth company is in West Sumatra and produces palm oil, tea and rubber while the seventh company is in North Sumatra, Lambung, and produces palm oil, tea, sugar and rubber, adding that eighth company is in West Java and mainly produces palm oil, tea and rubber while the ninth company is in Central Java and produces coffee, tea, rubber and sugar.
“The 10th company is in the East Java province and produces sugar and tobacco. The 11th company is in the East Java province and only produces sugar. The 12th company is also in the East Java province and produces rubber, coffee, tea and sugar. The 13th company is in Kalimantan and produces palm oil and rubber. The 14th company is in the Sulawesi province, and mainly produces palm oil and sugar,” concluded Budiman.