PALMOILMAGAZINE, JAKARTA — The provincial government of Riau, together with several regional leaders, has reaffirmed its commitment to advancing a more inclusive palm oil downstream strategy that benefits local communities. Moving beyond large-scale investment, a recent meeting with Indonesia’s Ministry of Industry in Jakarta (Wednesday, May 7, 2025) marked a significant step toward strengthening the role of cooperatives and small-scale enterprises in the palm oil value chain.
During the meeting, Suhardiman Amby, Regent of Kuantan Singingi (Kuansing), proposed that a portion of crude palm oil (CPO) production be processed directly by local cooperatives. He highlighted Koperasi Merah Putih as a ready-to-participate model for community-based cooking oil processing.
“We don’t want our people to remain bystanders in downstream development. Community cooperatives must have a stake in cooking oil production—not just large investors,” said Suhardiman, as reported by Palmoilmagazine.com via the Kuansing local government website (Friday, May 9, 2025).
The proposal comes as a response to the long-standing issue in palm-rich regions like Kuansing, where communities grow vast amounts of oil palm but have limited access to downstream processing facilities.
Riau Governor Abdul Wahid echoed the call for a more diversified player base in the palm oil downstream sector. He outlined plans to develop an integrated downstream industrial zone in Kuala Enok and enhance processing infrastructure in Bukit Batu and Pulau Burung.
“For years, we’ve been exporting CPO in raw form. Yet, Riau has enormous potential to produce value-added products such as margarine, soap, and other derivatives. Empowering cooperatives and small-scale enterprises will strengthen our local economic structure,” Wahid stated.
In response, the Ministry of Industry’s Director General of Agro Industry, Putu Juli Ardika, confirmed the government’s support by introducing new, small-scale processing technology.
“This is a steamless system—safe and easy to operate for farmers and cooperatives. We’re preparing a pilot trial in Bogor,” he explained.
Beyond palm oil, the Kuansing government also sought support for local rubber processing. “We don’t want to keep exporting raw rubber. We aim to process it into products like motorcycle tires and beyond,” added Suhardiman.
Deputy Minister of Industry Faisol Riza welcomed the proposals, assuring that the Ministry is ready to facilitate cross-sector collaboration—including engagement with private players and small-industry support institutions.
“We will tailor support to the unique potential of each region, so that downstream industries can grow inclusively and evenly,” said Faisol.
With strong backing from both national and regional governments, Riau is now charting a new course in palm oil downstreaming—one that opens the door for cooperatives and community-based enterprises, ensuring that the benefits of the industry are more equitably shared. (P2)
