Unilever to begin operation of North Sumatra palm oil plant by end of 2014
2014-06-06 10:45:40
Unilever Oleochemical Indonesia, a sister company of Unilever Indonesia, plans to begin commercial operation of its palm oil processing plant in North Sumatra by the end of this year.
The plant, wholly owned by Unilever, will process oleochemicals — chemicals derived from plant and animal fats — such as fatty acids and glycerols, which are commonly used in various domestic products, including soaps and detergents.
Unilever is a global domestic goods company, co-headquartered in Britain and the Netherlands, with products distributed across 170 countries.
“Globally, Unilever is the biggest palm oil consumer in the world… We make an effort to trace our products as we strive towards environmental sustainability,” said Sancoyo Antarikso, director and corporate secretary of Unilever Indonesia, during the company’s public presentation in Jakarta on Wednesday.
The oleochemical plant, estimated to cost approximately Rp 1.5 trillion ($126 million), is located in the Sei Mangkei Special Economic Zone in Simalungun, North Sumatra. According to Sancoyo, the project has absorbed roughly half of the estimated cost, or around Rp 750 billion.
Up to 20 percent of the plant’s production will be allocated to Indonesia, while the remainder will be exported around the world, according to Sancoyo.
“We also hope that this plant will accelerate growth in that economic corridor… There will be indirect growth in the area alongside this plant, from transportation to even catering,” said Sancoyo, alluding to Sei Mangkei’s status in the government’s 15-year infrastructure development plan that is aimed to spur economic growth in less-urbanized areas.
He added that Unilever Oleochemical Indonesia (UOI) received a 5-year tax holiday from the Indonesian government, which will kick in after the company has made commercial sales, along with a 2-year extension, after the first five years.
Unilever Indonesia recently handed out Rp 5.3 trillion — equivalent to its entire net income last year — as dividends to its shareholders.
Shares of Unilever Indonesia rose 0.75 percent to Rp 30,275 on the Indonesia Stock Exchange (IDX) on Wednesday.
The listed consumer goods giant operates eight factories — six in Tangerang and two in Surabaya, East Java — which produce the 40 different brands it sells throughout Indonesia.
Unilever Indonesia announced it has set aside roughly Rp 1.4 trillion for its capital expenditure this year, which will be used to increase production capacity and improve the distribution of its ice cream products, according to Sancoyo.