JAKARTA (Reuters) - Procter & Gamble Co (P&G) (PG.N) will invest $100 million in the oleochemical sector in Indonesia, the country’s industry minister MS Hidayat said on Monday.
“P&G is anticipating the need for 200,000 tonnes of fatty alcohol in the coming ten years from Indonesia,” Hidayat said following a meeting with P&G officials at his office.
“To meet the need they are preparing at least $100 million to set up a joint venture with the local partner in the sector,” Hidayat added.
High commodity prices and government efforts to boost downstream industries have started to attract investment in Indonesia over the past year.
Indonesia plans to offer fiscal incentives and restructure its export tax policy on crude palm oil, after it steadily hiked the tax to 25 percent in February from just 3 percent a year ago, to do more to spur downstream processing in the country.
The country is still reliant on exports of raw materials, and is aiming to move up the value chain.
Agriculture companies are looking to take advantage of growing wealth within Southeast Asia’s biggest economy.
Indonesia’s economy grew by 6.5 percent in the first quarter of 2011 from a year earlier, data showed in early May, due in part to strong domestic consumption.
Reporting by Yayat Supriatna; Writing by Michael Taylor; Editing by Muralikumar Anantharaman