Minister of Cooperatives Supports the Hydrocarbonization of Palm Oil Cooperatives to Cooking Oil Refinery

Minister of Cooperatives Ferry Juliantono inaugurated a crude palm oil (CPO) processing plant managed by the Sejahtera Village Unit Cooperative (KUD) in Musi Banyuasin Regency, South Sumatra, Wednesday (12/8/2026). (Dok-Kemenkop)

MUSI BANYAUASIN - Minister of Cooperatives Ferry Juliantono encourages palm oil cooperatives to expand their business to the processing of palm oil derivatives, including building a cooking oil refining facility (refinery).

Ferry said the construction of the refinery could be the next stage after the cooperative has its own crude palm oil (CPO) processing plant.

"If more cooperatives have CPO factories, it is not impossible that we will enter into derivative products. We can build our own cooking oil refinery," said Ferry at the inauguration of the KUD Sejahtera CPO factory in Musi Banyuasin, South Sumatra, Wednesday.

According to him, the development of downstream processing is needed so that cooperatives and oil palm farmers not only get income from the sale of fresh fruit bunches (FFB), but can also enjoy added value from the processing process to the final product.

Ferry said that people's plantations still face limitations in access to downstream. Therefore, he assessed that cooperatives need to be encouraged to become business entities that are able to manage farmers' economic activities, including entering the palm oil processing sector.

He added that the government also encouraged PT Agrinas Palma Nusantara, as a state-owned enterprise (BUMN) that has been tasked with managing oil palm plantations resulting from forest area enforcement, to expand cooperation with cooperatives in managing oil palm land under the management of the company.

According to Ferry, the strengthening of cooperation is expected to make cooperatives not only a gathering of members, but also develop as a business entity owned by oil palm farmers.

Ferry said that if the development of the palm oil derivative industry based on cooperatives can be realized, the cooking oil produced through the refinery of cooperatives will later have the potential to be distributed through the network of Red and White Village / Village Cooperatives in various regions.

The CPO processing plant managed by the Sejahtera Village Unit Cooperative (KUD) in Musi Banyuasin Regency, South Sumatra is targeted to become a model for cooperative-based palm oil downstream for replication in other areas.

The factory with an investment value of around IDR 100 billion has a processing capacity of up to 45 tons of fresh fruit bunches (FFB) per hour. The CPO products produced are currently marketed to a number of industrial partners, one of which is Wilmar.