PTPN Merges Into PalmCo and SupportingCo, Indonesia Could Become the World's Palm Oil King

Plantation Illustration (Photo: dock. Antara)

JAKARTA - The Ministry of State-Owned Enterprises (BUMN) has officially merged 13 companies under the Nusantara Perkebunan Holding, into two Sub-Holdings, namely PalmCo and SupportingCo.

PalmCo was formed through the merger of PT Perkebunan Nusantara (PTPN) V, VI and XIII into PTPN IV as the surviving entity and the impure separation of PTPN III (Persero) into PTPN IV. Meanwhile, Subholding SupportingCo was formed through the merger of PTPN II, VII, VIII, IX,

With this merger, PalmCo is expected to become the largest palm oil company in the world in terms of land area, reaching more than 600,000 hectares by 2026, and will become a major player in the world palm oil industry. Thus, it is able to increase national CPO production and domestic cooking oil.

PTPN even estimates that its cooking oil production will increase from 460,000 tons per year in 2021 to 1.8 million tons per year or four times as much in 2026.

Meanwhile, SupportingCo will become a superior plantation asset management company, which includes activities for utilizing plantation assets through asset optimization and divestment, management of plantation crops, diversification of other businesses.

Deputy Minister of SOE, Kartika Wirjoatmodjo, said that the PTPN Group merger was one of the schemes implemented by the Ministry of BUMN. One of the goals is to increase efficiency and improve various financial and operational indicators of the company.

"Of course, after this signing there will be integration of systems, HR (Human Resources), operations, finance, and so on, which we are trying to complete within six months. "And after that we have to return to focusing on our respective tasks," he said in an official statement, Monday, December 4.

Tiko, Kartika's nickname, said that the corporate action carried out by the PTPN Group was a comprehensive transformation, including transformation from the employee side. He hopes that this merger step can encourage PalmCo to become a leading palm oil company.

Furthermore, Tiko said that PalmCo would also be encouraged to become a company that focuses on increasing the downstreaming of palm oil products. Apart from that, the company will also focus on producing biogas, biodiesel sustainable efficient fuel, and other products.

“So I want the transformation from the people side to really be visible. "How can this transformation make PalmCo a leading palm oil company, not only from its on-farm, but also off-farm to be able to carry out downstream, value creation, including sustainable renewable energy," said Tiko.

Meanwhile, the Main Director of Holding Perkebunan Nusantara PTPN III (Persero) Muhammad Abdul Ghani said that the integration of the PTPN Group through the formation of PalmCo and SupportingCo was a concrete manifestation of corporate strategy to face increasingly fierce global competition.

Ghani said this integration would strengthen the company's position because it has competitive and comparative advantages, where the company is supported by superior use of land resources, human resources, technological innovation, and digitalization.

Furthermore, he explained, Subholding's strategy to achieve this big goal, including maximizing the value of landbank assets to gain added value, increasing EBITDA margins in the next 5 years. Increased equity, to an increasingly stronger business focus.

As an effort to achieve increased equity, said Ghani, Environment, Social and Governance (ESG) initiatives are an important indicator in protecting company value.

"In carrying out all its business and operational activities, the Company always ensures that the products it produces not only have an economic impact, but also have an impact on the social and environment," he said.