PALMOILMAGAZINE, SAMARINDA – The East Kalimantan Provincial Government (Kaltim) is intensifying the development of its palm oil sector as a new economic pillar amid declining mining activities. Through the Plantation Office, the government is preparing strategies to attract more investors, both domestic and international.
“The government is currently assessing steps to encourage investment in the palm oil industry, particularly in East Kalimantan. We hope this program can be sustained,” said Acting Head of the East Kalimantan Plantation Office, Andi M. Siddik, As quoted by Palmoilmagazine.com from Kaltimpost on Wednesday (August 20, 2025).Kaltimpost on Wednesday (August 20, 2025).
According to Plantation Office data, East Kalimantan is home to around 220 palm oil companies with 110 processing plants. Kutai Timur has the largest oil palm estates, covering about 400,000 hectares, followed by Paser and Penajam Paser Utara. “These three regions are the core centers of oil palm development in Kaltim,” Andi explained.
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Beyond large-scale companies, the provincial government is also preparing major projects to strengthen smallholder participation. The program aims to enable farmers not only to serve as suppliers but also to manage their own businesses and eventually establish processing facilities. “The goal is for farmers to become independent and move up the value chain,” he added.
Despite its vast potential, downstream palm oil development in Kaltim remains relatively slow. One of the main challenges is ownership concentration, as most companies are headquartered in Java. “Since the owners are mostly based in Java, the downstream industry in East Kalimantan has not yet reached its full potential,” Andi noted.
To strengthen competitiveness, the provincial government is encouraging synergy among palm oil firms through membership in the Indonesian Palm Oil Association (Gapki). Currently, only 77 out of 220 companies in Kaltim are members. “The governor hopes more companies will join Gapki so their performance can be better coordinated,” Andi said.
With these strategies, the East Kalimantan government is optimistic about positioning the province as a palm oil hub that is not only strong in upstream production but also advanced in downstream industries, making it more attractive to world-class investors. (P2)
