Final Central Kaklimantan

BKPM
INVESTMENT COORDINATING BOARD (BKPM) JAPAN INTERNATIONAL COOPERATION AGENCY
INVESTMENT OPPORTUNITIES STUDY FOR EACH PROVINCE OF EAST, WEST, CENTRAL AND SOUTH KALIMANTAN
V N I
T S E
M T N E
P O
P T R O
U T I N
I S E
S D U T
S A E
T E W ,
S F C , T
O E R T N
A R H C L
O R P D N A
V C N I U O S
T F O K H E
M I L A
T N A
A N
T S A
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K L A
C R A
I A M
H 2 ,
A T N
0 5
FINAL REPORT
CENTRAL KALIMANTAN
March, 2005
PT. PACIFIC CONSULINDO INTERNATIONAL INDONESIA (formerly PT.Mitrapacific Consulindo International)
Investment Opportunities Study For Each Province of East, West, Central and South Kalimantan FINAL REPORT for Central Kalimantan BKPM - JICA
TABLE OF CONTENTS
Page I. OVERVIEW OF PROVINCIAL ECONOMY 1.1. 1.2. 1.3. 1.4. 1.5. 1.6. 1.7. 1.8. Physical Conditions ........................................................................................ 1 - 1 Domestic Product ........................................................................................... 1 - 6 Population....................................................................................................... 1 - 9 Labor Force .................................................................................................... 1 - 10 Land Price....................................................................................................... 1 - 11 Other Basic Economic and Industrial Indicators............................................ 1 - 11 Industrial Map ................................................................................................ 1 - 14 Performance of Domestic and Foreign Investment ........................................ 1 - 20
II. CURRENT SITUATION AND FUTURE PROSPECT OF INFRASTRUCTURE 2.1. 2.2. 2.3. 2.4. 2.5. 2.6. Inland Transportation .................................................................................... 2 - 1 Harbor............................................................................................................. 2 - 10 Airport ............................................................................................................ 2 - 11 Industrial Estate .............................................................................................. 2 - 17 Power and Electricity Supply ......................................................................... 2 - 17 Telecommunication ........................................................................................ 2 - 20
III. CURRENT SITUATION AND FUTURE PROSPECT OF MAJOR SECTORS ....................................................................................... 3 - 1 3.1 Current Major Sector ..................................................................................... 3 - 1 A. Agriculture Sector ................................................................................. 3 - 1 3.2 Commodity Analysis ..................................................................................... 3 - 13 A. B. C. D. E. F. G. IV. Pineapple Plantation and Pineapple Canning (Package) ....................... 3 - 17 Oil Palm Plantation and Crude Palm Oil (CPO) Processing ................. 3 - 27 Cooking Oil ........................................................................................... 3 - 38 Rubber ................................................................................................... 3 - 44 Rattan Processing .................................................................................. 3 - 51 Pulp & Paper .......................................................................................... 3 - 54 Particle Board ......................................................................................... 3 - 64
CURRENT SITUATION AND FUTURE PROSPECT OF MAJOR STRATEGY AREAS 4.1. Major Strategic Area of Central Kalimantan............................................ 4 - 1 4.2. Leading Sector In Each Strategic Area..................................................... 4 - 1
P.T Pacific Consulindo International Indonesia (PCII
A. B. C. D. E. V.
Kotawaringin Barat Area (Pangkalan Bun)...................................... 4 - 1 Kotawaringin Timur (Sampit) .......................................................... 4 - 9 South Barito Area (Buntok).............................................................. 4 - 15 Kapuas .............................................................................................. 4 - 17 Tanjung Putting Area ....................................................................... 4 - 18
CONSTRAINT IN INVESTMENT CLIMATE .......................................... 5 - 1 5.1. Illegal Economic Activities ....................................................................... 5 - 1 5.2. Institutional Coordination.......................................................................... 5 - 2 5.3. Regional Autonomy................................................................................... 5 - 3 5.4. Dispute of Land Issue ................................................................................ 5 - 4 5.5. Infrastructure Issue ................................................................................... 5 - 6 5.6. Governments Effort to deal with the Issues ............................................. 5 - 6 5.7. Proposal for Central Kalimantan Province................................................ 5 - 7
VI. PROPOSAL OF PROSPECTIVE PROJECTS ............................................. 6 - 1 6.1. 6.2. 6.3. 6.4. 6.5. 6.6. 6.7. 6.8. Pineapple Plantation and Pineapple Canning ............................................. 6 - 1 Oil Palm Plantation and CPO Processing................................................... 6 - 7 Cooking Oil Industry .................................................................................. 6 - 14 Rubber Nursery and Processing ................................................................ 6 - 17 Rattan Furniture Industry .......................................................................... 6 - 22 Pulp and Paper ........................................................................................... 6 - 26 Particle Board Industry.............................................................................. 6 32 Nature Tourism of Tanjung Putting National Park .................................. 6 36
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LIST OF TABLES
Page Table 1-1. Table 1-2. Table 1-3. Table 1-4. Table 1-5. Table 1-6. Table 1-7. Table 1-8. Table 1-9. Table 1-10. Table 1-11. Table 1-12. Table 1-13. Table 1-14. Table 1-15. Table 1-16. Table 1-17. Table 1-18. Table 2-1. Table 2-2. Table 2-3. Table 2-4. Total Area by Soil Type of Central Kalimantan Province ..................... 1 - 2 Total Area of Central Kalimantan by Land Use..................................... 1 - 2 Big rivers in Central Kalimantan............................................................ 1 - 3 Name of Kabupaten in Central Kalimantan ........................................... 1 - 4 Economic Development Profile in Recent Years (in %)........................ 1 - 6 GRDP of Central Kalimantan Province in recent 4 years based on constant price 1993 from production side (in Billion Rupiah)............ 1 - 6 GRDP of Central Kalimantan Province in recent 4 years based on constant price 1993 from demand side (in Billion Rupiah) ................. 1 - 7 Comparison of 2003 GRDP between Central Kalimantan and The Others within Kalimantan Island by sectors (constant price of 1993, in Billion Rupiah). ................................................................... 1 - 7 Comparison of GRDP per capita between Central Kalimantan and The Others, (based on constant price of 1993) ................................ 1 - 8 Comparison of GRDP Growth between Central Kalimantan and The Others by year, (constant price of 1993, in Billion Rupiah) ........... 1 - 8 Comparison of Location Quotient Value of Central Kalimantan and The Others within Kalimantan Island by sectors.................................... 1 - 8 Total Household, Population, and Gender by Kabupaten/Kota , 2003 .. 1 - 9 Working Force of Population more than 10 years old by Education Achievement........................................................................................... 1 - 10 Minimum Regional Wage in Central Kalimantan.................................. 1 - 10 Land price in Central Kalimantan (in rupiah) ........................................ 1 - 11 Export and Import value in recent five years ......................................... 1 - 13 Bank Credit Portfolio of Central Kalimantan by Sectors (million Rupiah) ..................................................................................... 1 - 14 Inflation rate in Central Kalimantan....................................................... 1 - 14
Length of Roads by Type of Surface in Central Kalimantan ................. 2 - 1 River Condition at Central Kalimantan .................................................. 2 - 8 Data and Information of Canal at Central Kalimantan........................... 2 - 9 River Transportation among City Link of Central Kalimantan Province (2003) ...................................................................................... 2 - 9 Table 2-5. Domestic Air Traffics by Airport (2003) .............................................. 2 - 11 Table 2-6. List Air transport in Central Kalimantan................................................ 2 - 12 Table 2-7. List of Harbor Facility in Central Kalimantan ....................................... 2 - 13 Table 2-8. Dock River Facility in Central Kalimantan Province............................. 2 - 14 Table 2-9. Condition of Electricity in Central Kalimantan...................................... 2 - 17 Table 2-10. Source of Electrics Energy each District................................................ 2 - 18 Table 2-11. Amount of Client of Electrics at Kabupaten/ Kota in Province of Central Kalimantan ............................................................................ 2 - 19
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Table 2-12. Ability of Evocation in Province of Central Kalimantan ....................... 2 - 20 Table 2-13. Central Capacity and Number of Telephone Link By Kabupaten.......... 2 21 Table 3-1. Table 3-2. Table 3-3. Table 3-4. Table 3-5. Table 3-6. Table 3-7. Table 3-8. Table 3-9. Table 3-10. Table 3-11. Table 3-12. Table 3-13. Table 3-14. Table 3-15. Table 3-16. Table 3-17. Table 3-18. Table 3-19. Table 3-20. Table 3-21. Table 3-22. Table 3-23. Table 3-24. Table 3-25. Table 3-26. Table 3-27. Table 3-28. Table 3-29. Table 3-30. Table 3-31. Table 3-32. Table 3-33. Table 3-34. Table 3-35. Table 3-36. Table 3-37. Table 3-38. Table 3-39. Table 3-40. Table 3-41. Table 3-42. Table 3-43. Contribution of plantation sub sector to GRDP ..................................... 3 - 1 Surveyed regions and recommended commodities ............................... 3 - 2 Plantation area of each commoditty and ownership status..................... 3 - 3 Growth and projection of area of three major commodities................... 3 - 4 Plantation area of each district and ownership status ............................. 3 - 4 Production of major plantation industry product in recent years ........... 3 - 4 Market of Plantation Products ................................................................ 3 - 5 Rank of rubber plantation of Central Kalimantan in national level ..... 3 - 6 Natural forest concession in Central Kalimantan ................................... 3 - 7 Biggest five provinces with number of HPH and log product. .............. 3 - 7 Big five province with number of active Timber Estate ........................ 3 - 8 Total Land Degradation.......................................................................... 3 - 8 Production of major forestry industry products in recent years. ............ 3 - 9 Rank of plywood production of Central Kalimantan in national scale, year 2003 ...................................................................................... 3 - 9 Market destination of various forestry product year 2003. .................... 3 - 10 Area of food crops agriculture in Central Kalimantan ........................... 3 - 12 List commodity ...................................................................................... 3 - 14 National producer of canned pineapples ................................................ 3 - 18 Major world producer of fresh pineapple ............................................... 3 - 20 Major importer of fresh pineapple.......................................................... 3 - 21 Major exporter of canned pineapple....................................................... 3 - 21 Export Volume and Value of Indonesia Canned Pineapple ................... 3 - 22 Major importer of canned pineapple ...................................................... 3 - 22 Production of Indonesia Fresh Pineapple ............................................... 3 - 23 Domestic consumption of Indonesian canned pineapple ....................... 3 - 23 Pineapple production of major districts in Central Kalimantan ............. 3 - 25 Current area of pineapple plantation in several major districts.............. 3 - 25 Transmigrant in Kapuas, Pulang Pisau, and Kotawaringin Timur......... 3 - 26 Central Kalimantan oil palm plantation rank in national level .............. 3 - 28 Growth of palm oil plantation area from 2000 2004 .......................... 3 - 29 List of CPO factory in Central Kalimantan............................................ 3 - 29 The Projection of World Palm Oil Production, 2000 2010 ................. 3 - 30 Indonesia Export of CPO Based on Destination Country ...................... 3 - 31 World Vegetable Oil Consumption ........................................................ 3 - 31 Domestic Consumption of CPO (in 000 ton) 3- 32 Spatial Plan of Central Kalimantan (Perda no 8, year 2003) ................. 3 - 33 Trasnmigrant Settlement in Central Kalimantan .................................... 3 - 37 Development of Plantation Area and its CPO Production ..................... 3 - 39 Output of Indonesias Cooking Oil 2000 - 2003 .................................... 3 - 41 Comparison of number of industry and its capacity in Indonesia .......... 3 - 41 Comparison of World Consumption in Various Vegetable Oil Between 1993 1999 (000,000 ton) 3 - 42 Development of Domestic Consumption of Cooking oil ....................... 3 - 43 Projection of Domestic Cookng Oil Consumption................................. 3 - 46
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Table 3-44. Table 3-45. Table 3-46. Table 3-47. Table 3-48. Table 3-49. Table 3-50. Table 3-51. Table 3-52. Table 3-53. Table 3-54. Table 3-55. Table 3-56. Table 3-57. Table 3-58. Table 3-59. Table 3-60. Table 3-61. Table 3-62. Table 3-63. Table 3-64. Table 3-65. Table 3-66. Table 3-67. Table 3-68. Table 3-69. Table 3-70. Table 4-1. Table 4-2. Table 4-3. Table 4-4. Table 4-5. Table 4-6. Table 4-7. Table 4-8. Table 4-9. Table 4-10. Table 4-11. Table 4-12. Table 4-13. Table 4-14. Table 4-15. Table 4-16. Table 6-1. Table 6-2. Table 6-3.
Rubber plantation of Central Kalimantan in national scale.................... 3 - 45 Installed Capacity of rubber industry in Indonesia ................................ 3 - 46 Position of Natural and Synthetic Rubber in The World ....................... 3 - 47 Annual sustainable rattan harvesting in Indonesia ................................. 3 - 52 Export of rattan product from Indonesia ................................................ 3 - 53 Indonesian export of rattan furniture by country of destination............. 3 - 53 Growth of Pulp-base Timber Estate area in Indonesia........................... 3 - 56 Profile of Indonesian Pulp and Paper Industry in 2003.......................... 3 - 57 Production Capacity of Major Pulp Producer in Indonesia.................... 3 - 58 Major Producer Countries of Wood Pulp ............................................... 3 - 59 Major Producer Countries of Paper and Paperboard .............................. 3 - 59 National Pulp Production and Export..................................................... 3 - 60 National Pulp Consumption and Import ................................................ 3 - 61 National Pulp Consumption Projection .................................................. 3 - 61 National Paper and Paperboard Production............................................ 3 - 61 Paper and Paperboard Consumption Import........................................... 3 - 62 Paper Consumption Projection ............................................................... 3 - 62 Area allocated for forestry based on spatial plan ................................... 3 - 63 National Particle Board Production........................................................ 3 - 67 Major Producer of Particle Board/MDF in Indonesia ............................ 3 - 68 World Production and Consumption of three kinds of Particle Board... 3 - 69 Gap of production and consumption in major countries ........................ 3 - 69 Indonesian Export Volume of three kinds of Particle Board ................. 3 - 70 Domestic Consumption of Particle Board .............................................. 3 - 70 Tourism Projection (2002 to 2010) To Tanjung Putting ........................ 3 - 73 Tourism To Tanjung Putting .................................................................. 3 - 73 Country Origin of Tourism To Tanjung Putting .................................... 3 - 74 Structure of GRDP of Kotawaringin Barat (2003)................................. 4 - 2 Length Road surface of Kotawaringin Barat (2003) .............................. 4 - 3 Specification of Port in Pangkalan Bun and Kumai............................... 4 - 3 Specification of CPO Port in Bumiharjo ................................................ 4 - 4 CPO Production and Projected Production in Kotawaringin Barat ....... 4 - 5 Growth of coconut plantation area ......................................................... 4 - 6 Major Product of Plantation Sub Sector................................................. 4 - 6 Realization of CPO Factory in Kotawaringin Barat .............................. 4 - 7 Market of CPO Factory from Kotawaringin Barat................................. 4 - 7 Structure of GRDP of Kotawaringin Timur (2002) ............................... 4 - 9 Specification of Sampit and Samuda Port .............................................. 4 - 11 Specification of Bulk Terminal Bagendang .......................................... 4 - 11 Specification of air port in Sampit ......................................................... 4 - 12 Realization of CPO Factory in Kotawaringin Timur ............................. 4 - 12 Major Primary Product of Forestry Sub Sector...................................... 4 - 13 Specification of air port in Buntok ......................................................... 4 17 National producer of canned pineapples ................................................ 6 - 3 Production and Consumption of Canned Pineapple in Indonesia .......... 6 - 3 Proposed available land for pineapple plantation................................... 6 - 4
Table 6-4. Table 6-5. Table 6-6. Table 6-7. Table 6-8. Table 6-9. Table 6-10. Table 6-11. Table 6-12. Table 6-13. Table 6-14. Table 6-15. Table 6-16. Table 6-17. Table 6-18. Table 6-19. Table 6-20. Table 6-21. Table 6-22. Table 6-23. Table 6-24. Table 6-25. Table 6-26.
Production and Export of Indonesian Fresh Pineapple .......................... 6 - 5 Production and consumption of Indonesian Canned Pineapple ............. 6 - 5 Projection of available area for plantation.............................................. 6 - 9 Physical condition of each district ......................................................... 6 - 9 Road service in each district................................................................... 6 - 10 Port Orientation of Each District............................................................ 6 - 10 Development of Plantation Area in Kalimantan 2000 2003 ............... 6 - 15 Position of Natural and Synthetic Rubber in The World ....................... 6 - 19 Annual sustainable rattan harvesting in Indonesia................................. 6 - 23 Indonesian export of rattan furniture by country of destination............. 6 - 24 Competitor Country of Rattan Export.................................................... 6 - 24 Profile of Indonesian Pulp and Paper Industry in 2003 ......................... 6 - 27 Major Producer Countries of Wood Pulp.............................................. 6 - 28 Major Producer Countries of Paper and Paperboard.............................. 6 - 28 National Pulp Consumption and Import ................................................ 6 - 29 National Pulp Consumption Projection ................................................ 6 - 29 Paper and Paperboard Consumption Import....................................... 6 - 30 Paper Consumption Projection .............................................................. 6 - 30 Major Producer of Particle Board/MDF in Indonesia ......................... 6 33 National Particle Board Production ....................................................... 6 33 Gap of production and consumption in major countries........................ 6 34 Indonesian Export Volume of three kinds of Particle Board ................. 6 35 Indonesian Export Volume of three kinds of Particle Board ................. 6 35
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LIST OF FIGURES
Page Figure 1-1. Figure 1-2. Figure 1-3. Figure 1-4. Figure 1-5. Figure 1-6. Figure 1-7. Figure 1-8. Figure 1-9. Figure 1-10. Figure 1-11. Figure 1-12. Figure 1-13. Figure 1-14. Figure 1-15. Figure 1-16. Figure 1-17. Figure 1-18. Figure 1-19. Figure 1-20. Figure 1-21. Figure 1-22. Figure 2-1. Figure 2-2. Figure 2-3. Figure 2-4. Figure 2-5. Figure 2-6. Figure 2-7. Figure 2-8. Figure 3-1. Figure 3-2. Figure 3-3. Figure 3-4. Figure 3-5. Figure 3-6. Figure 3-7. Figure 3-8. Figure 3-9. Figure 3-10. Figure 3-11. Elevation Range in Central Kalimantan Province.................................1 - 1 Boundary of Kabupaten/Kota in Central Kalimantan ...........................1 - 5 Population of Central Kalimantan Province by Age .............................1 - 9 Barito Regional Economic Inter relation...............................................1 - 12 Commodity Contribution to Export.......................................................1 - 13 Map of Industrial Location in Central Kalimantan (Plantation) ...........1 - 15 Map of Industrial Location in Central Kalimantan (Mining) ................1 - 16 Map of Industrial Location in Central Kalimantan (Industry) ..............1 - 17 Map of Industrial Location in Central Kalimantan (Livestock) ............1 - 18 Map of Transmigration Location in Central Kalimantan ......................1 - 19 Value Realize Investment in Central Kalimantan, 2004 .......................1 - 20 Number of Investment in recent 8 years................................................1 - 21 Investment in recent 8 years ..................................................................1 - 21 Value of Investment Realization in Forestry.........................................1 - 22 Value of Investment Realization in Wood Industry ..............................1 - 22 Value of Investment Realization in Plantation ......................................1 - 23 Value of Investment Realization in Mining .........................................1 - 23 Value of Investment Realization in Fishery .........................................1 - 24 Value of Investment Realization in Transportation..............................1 - 24 Value of Investment Realization in Chemical.......................................1 - 25 Value of Investment Realization in Real Estate ....................................1 - 25 Value of Investment Realization in Service .........................................1 - 26 Graphic of Condition and Type of Road Surface..................................2 - 2 Map of Class of Roads in Central Kalimantan ......................................2 - 3 Type of Road Surface in Central Kalimantan .......................................2 - 4 Road Condition in Central Kalimantan .................................................2 - 5 Condition of Road Section Palangkaraya - Buntok...............................2 - 7 Water Transportation Network of Central Kalimantan .........................3 - 15 Airport Network of Central Kalimantan Province ................................2 - 16 Map of Source of Electrics Energy .......................................................2 - 19 Graphic of major plantation product in recent years .............................3 - 5 Land degradation outside of the forest area ..........................................3 - 8 Pineapple industry flowchart .................................................................3 - 18 Small-scale Pineapple Plantation in Pulang Pisau.................................3 - 24 World Vegetable Oil Consumption .......................................................3 - 32 Trend of Indonesia CPO and cooking oil price at Rotterdam market ...3 - 33 CPO bulky terminal in Bumiharjo-Kotawaringin Barat ......................3 - 35 CPO bulky terminal in Bagendang-Kotawaringin Timur .....................3 - 35 World Rubber Consumption Projection and Actual..............................3 - 48 China Natural Rubber Imports by Selected Countries Origin...............3 - 49 Indonesian Rubber Price at Rotterdam Market .....................................3 - 50
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Figure 3-12. Figure 3-13. Figure 3-14. Figure 3-15. Figure 3-16.
MDF (left) and Common Particle Board (Right) ..................................3 - 65 Oriented chips in Oriented Strand Boards (OSB...................................3 - 65 Key specoes of Tanjung Putting National Park.....................................3 - 71 Transportation to Tanjung Puting and Sight of Sekonyer River ...........3 72 Area of Tanjung Putting National Park .................................................3 72
Figure 4-1. Figure 4-2. Figure 4-3. Figure 4.4. Figure 4.5.
Kumai Port in Kotawaringin Barat........................................................4 - 4 Realization and projection of CPO production .....................................4 - 6 Rattan and Moulding Product of Kotawaringin Timur .........................4 - 13 Investment Application Procedure in Kotawaringin Barat ...................4 - 15 Location of Tanjung Putting National Park ..........................................4 - 20
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CHAPTER I OVERVIEW OF PROVINCIAL ECONOMY 1.1. Physical Condition Geography Central Kalimantan Province is located at latitude of 0o 45 North to 3o 30 South, and longitude of 111o East. Administratively, it is adjacent to West Kalimantan Province in the west and north side, South Kalimantan Province in the southeast, and East Kalimantan in the east side. The southern and mid part of the province have a large area of wet land especially peat swamp. Amongst the largest swamp are belongs to the District of Kapuas and District of Pulang Pisau, which used to allocated for one million hectare peat conversion for paddy field program. In addition, the southern part also has around 750 km of coastal line, which is included in the region of Java Sea. Such swamp y and coastal landforms show that the southern and mid part are dominated by flat area (with slope 0-15%), or undulating in a few area (with slope less than 40%). The northern part more hilly and mountainous with altitude ranging 400-2000 meter above sea level. The dominant slope is 25% to 40%, with several location have steep slope (more than 40%) like the area along the Mueller Mountain and Schawaner Mountain in the District of Murung Raya, Barito Utara, Katingan, Gunung Mas, and Seruyan. Totally, flat area covers about 61.83% of the total area of Central Kalimantan, medium slope covers 28.34%, while the extreme sloping area covers 9.83%. The detail can be seen in Appendix 1.
Source:
Bappeda of Central Kalimantan
Figure 1-1 Altitude range of Central Kalimantan Province
P.T Pacific Consulindo International Indonesia (PCII)
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Soil Type Table 1-1 shows the soil type in Central Kalimantan, which is dominated by Red-Yellow Podsolic. The soil type (red-yellow podsolic) is suitable for development of plantation or timber estate, even though it is very susceptible to erosion. Table 1-1. Total area by soil type of Central Kalimantan Province
No
Soil Type Organosol, Gley and Humus Alluvial Regosol P M K, Podsol Latosol Litosol & Laterit Lake, swamp, river Jumlah
Area (ha) 2,797,998 1,487,338 2,045,495 6,477,264 268,860 2,006,187 273,256 15,356,398
(%) 18.22 9.69 13.32 42.18 1.75 13.06 1.78 100.00
Land Suitablity Depend to the maturity and less than 1 m depth is suitable for agriculture Suitable food crops and tree corps Non Suitable because sandy soil dominant Marginal to suitable for tree corps Marginal to suitable for tree corps Non suitable to marginal for tree corps or plantation crops
1 2 3 4 5 6 7
Source: Agency of Plantation of Central Kalimantan Province (2003)
Land Cover and Land Use Most of the land of Central Kalimantan covered by tropical rain forest. Based on statistical data (2003), land use type of the province consists of: Forest (87.87%), plantation (4.32%), rice field and up land rice about (7.00%), and the remaining about 0.81% occupied by settlement and buildings. Detailed area is presented in Table 1-2. The main forest types are Mountain Tropical Rain Forest in altitude of 1000 meter and Lowland Tropical Rain Forest in the lower area below 1000 m. Based on the Schmidt and Ferguson climate classification, the province has A and B of climate types with annual rainfall is 1,600 mm. Table 1-2. Total area of Central Kalimantan by land use
No 1 2 3 4 Description Rice Field (Sawah & Up land) Plantation Settlement and Buildings Forest and Others Total Area (km2 ) 10,744.79 6,637.62 1,244.24 134,937.25 153,564.00 Percentage (%) 7.00 4.32 0.81 87.87 100.00
Source : Statistics Office of Central Kalimantan Province (2003)
Provincial government through Provincial Spatial Plan (RTRWP) has allocated 16% of the provincial area for protected area, while the remaining 84% is for cultivation/utilization purposes. Of the 84% utilization area, 24.72% is for Limited Protection Forest, 28% for Permanent Production Forest, and the remaining is for the other purposes such as settlement or industrial.
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Hydrology Most of districts in Central Kalimantan Province crossed by big or small river. There are 11 big rivers in Central Kalimantan flow from the north toward the Java Sea in the southern Central Kalimantan. The rivers are very useful for traditional people in who use the rivers for transportation and trading activities. Currently river is still used for transportation of many important commodities such as coal, wood and plantation product. The list of big rivers in Central Kalimantan is as follows: Table 1-3. Big rivers in Central Kalimantan
No 1 2 3 4 5 6 7 8 9 10 11 River Sungai Barito Sungai Kapuas Sungai Kahayan Sungai Sebangau Sungai Katingan Sungai Mentaya Sungai Seruyan Sungai Kumai Sungai Arut Sungai Lamandau Sungai Jelai Crossed Regency Murung Raya, Barito Utara, Barito Selatan Gunung Mas, Kapuas Gunung Mas, Palangkaraya, Pulang Pisau Pulang Pisau Katingan Kotawaringin Timur Seruyan Kotawaringin Barat Kotawaringin Barat, Sukamara Lamandau Sukamara
Source: Bappeda of Central Kalimantan Province (2003 )
Several Environmental Constraints First, Organosol is the second largest soil type after red-yellow podsolic. The suitability of the soil type for agriculture depends up on peat/solumn depth. The area with organosol soil basically not so suitable for food crops, but in a more mature decomposition from peat depth less than 1 meter, food crops still possible. This soil is also not suitable for construction from economic point of view because construction will spend more cost (technology and material) compare to area with in up land. Second, Due to environment quality degradation in up and mid stream of the watershed resulted by excessive natural exploitation, the re is less water absorbed by the ground. This has made river water volume fluctuated extremely between dry and wet season. The fluctuation of river water made discontinue of larger barge transport to downstream during dry season particularly to carry coal from upstream at volume more than 2,500 ton. Administrative Area Since the law no 5/2002, Central Kalimantan has been developed from 5 districts and 1 city into 13 districts and 1 city. The area of each district is presented in Table 1-4. In the autonomy era, districts are allowed to promote their respective area to investors. Each district could also issue the local regulation (PERDA) in seeking the potential sources of revenue in their area.
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Table 1-4. Name of district in Central Kalimantan No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 District/City Kab. Kotawaringin Barat Kab. Kotawaringin Timur Kab. Kapuas Kab. Barito Selatan Kab. Barito Utara Kab. Sukamara Kab. Lamandau Kab. Seruyan Kab. Katingan Kab. Pulang Pisau Kab. Gunung Mas Kab. Barito Timur Kab. Murung Raya Kota Palangka Raya Central Kalimantan
Source : Statixtic Office of Central Kalimantan Province (2003)
Area (km2 ) 10,759 16,496 14,999 8,830 8,300 3,827 6,414 16,404 17,800 9,997 10,804 3,834 23,700 2,400 153,564
Capital Pangkalan Bun Sampit Kuala Kapuas Buntok Muara Teweh Sukamura Nanga Bulik Kuala Pembuang Kasongan Pulang Pisau Kuala Kurun Tamiang Layang Puruk Cahu Palangka Raya Palangkaraya
The map of the districts is presented in Figure 1-2.
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Figure 1-2. Boundary of district/kota in Central Kalimantan
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1.2. Domestic Product General Economic Growth Based on Regional Development Planning Board (Bappeda) of Central Kalimantan report, by 2003 the economic growth was 4.86%, or lower than targeted of 6-7%. From the production point of view, the economic growth mainly supported by agriculture sector growth (about 8.44%), industry growth (6.11%), trade/restaurant/hotel (5.41%), finance/ financial services (5.62%), and other services (4.94%). From the consumption side, factors that stimulated the economic growth were consumption of non profit private institution (LSTMU) that grew with 8.01%, and government spending 19.64%. While the gross capital formation (PMTB) was grew at positive 5.75%. This was a significant achievement of province with respect to situation of year 2000 minus 3.09%. Table 1-5 Economic development profile in recent years (in %)
Description 1. GRDP 2. Household Consumption 3. Non profit private institutions (LSTMU) 4. Government Spending 5.Capital formation ( PMTB) 6. Export 7. Import
Source: Bappeda of Central Kalimantan Province (2003)
2000 1.50 2.20 12.13 24.68 -3.09 3.21 5.33
2001 2.72 5.92 0.56 20,05 -5.33 -9.86 2.28
2002 3.27 1.98 6.39 24.21 1.15 0.32 6.14
2003 4.86 2.64 8.01 19.64 5.75 1.96 3.63
Gross Regional Domestic Product In 2003, the economic structure of Central Kalimantan was dominated by primary sector especially agriculture. Contribution of agriculture sector to gross regional product grew from 44,83% in 2001 into 48,63% in 2003. Table 1-6. GRDP of Central Kalimantan Province in recent 4 years based on constant price 1993 from production side ( in Billion Rupiah)
No 1 2 3 4 5 6 7 8 9 Sector Agriculture Mining and Query Processing Industry Electricity and Clean Water Construction Trading/Hotel/Restaurant Transportation and Telecom. Finance, Rental, and Financial service Other Services 2000 1,648.07 121.95 321.18 21.60 179.97 761.95 490.01 96.83 454.22 2001 1,677.81 118.05 320.04 23.34 196.4 797.78 471.30 93.85 505.35 2002 1,807.30 75.13 326.78 22.96 208.75 813.16 465.01 97.41 524.85 4,341.38 2003 1,959.87 33.27 346.76 23.82 210.46 857.18 467.20 102.81 550.764 4,552.23 Average Growth 5.94 -35.14 2.58 3.31 5.35 4.00 -1.57 2.017 6.63 3.58
Total 4,095.78 4,203.91 Source : Statistics Office of Central Kaimantan Province (2003)
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Table 1-7. GRDP of Central Kalimantan Province in recent 4 years based on constant price 1993 from demand side (in Billion Rupiah)
No 1 2 3 4 5 6 7 Consumption Household Consumption Non profit private institutions Government Consumption Gross Fix Capital formation Stock Change Export Import Total
Source : BPS Central Kaimantan Province (2003)
2000 2,076.78 64.78 607.53 1,690.87 55.24 1,236.38 1,514.80 4,095.78
2001 2199.65 70.89 729.36 1,486.15 115.65 1,143.60 1,541.41 4,203.92
2002 2,413.15 73.04 1,055.95 1,516.26 38.25 1,096.15 1,161.07 4,341.38
2003 2,302.45 81.46 1,083.91 1,589.63 20.59 1,169.67 1,695.51 4,552.23
Average Growth 3.50 7.94 21.29 -2.04 -28.03 -1.83 3.83 3.58
In the provincial economic plan, the regional government has projected that in the next two decade primary sector persist become back bone of provincial economy (Material of Cluster Meeting on Joint Tourism Development BEMP-EAGA- Bappeda Central Kalimantan Province), several key factors such availability of land, number of population, infrastructure condition have brought primary sector become the back bone of Central Kalimantan economy. Kalimantan Regional Comparison In Kalimantan Regional economy, Central Kalimantan is the lowest GRDP among 4 provinces of Kalimantan island, however the agriculture sector of Central Kalimantan Province is the second highest. Agriculture product would be the prominent sector of Central Kalimantan. Table 1-8 indicates that Central Kalimantan is the lowest GRDP. Table 1-8. Comparison of GRDP of Central Kalimantan and the other provinces in Kalimantan by sectors (constant price of 1993)
No
1 2 3 4 5 6 7 8 9 Agriculture Mining and Quarry Processing Industry Electricity and Clean Water Construction Trade/ Hotel/Restaurant Transportation /Telecommunication Finance, Rental, and Firm service Services Total
GRDP Sector
Production (billion rupiah)

West 1,854.44 114.52 1,445.17 83.05 519.01 1,486.12 814.90 555.29 909.37 7,781.88 Central 1,959.87 33.27 346.76 23.82 210.46 857.18 467.20 102.81 550.76 4,552.23 South 1,651.28 1,297.47 1,051.98 116.38 341.88 1,077.02 843.22 236.88 640.07 7,256.17 East 2,056.59 8,321.03 8,163.58 110.81 797.551 2,216.95 2,690.19 706.69 617.25 25,680.55
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Table 1-9. Comparison of GRDP per capita of Provinces in Kalimantan Island (based on constant price of 1993)
No
1 2 3 4
Province
West Kalimantan Central Kalimantan South Kalimantan East Kalimantan Indonesia
2000
1,811,096 2,205,644 2,153,021 9,129,300 1,933,592
2001
1,804,502 2,200,926 2,202,666 9,991,082 1,970,751
2002
1,800,648 2,208,110 2,238,922 9,469,456 2,012,894
Growth
-2.1% -1.4% 2.0% 1.3% 2.1%
The GRDP growth of Central Kalimantan is lower than South and East Kalimantan Province, this is related with the contribution of oil and gas industry in East Kalimantan and contribution of secondary industrial and services of South Kalimantan. The comparison of GRDP growth of four provinces of Kalimantan Island is shown in he following table: Table 1-10. Comparison of GRDP Growth between Central Kalimantan and The Others by year, (constant price of 1993, in Billion Rupiah)
No 1 2 3 4
Province
West Kalimantan Central Kalimantan South Kalimantan East Kalimantan
2000
7,274,000 4,092,515 6,424,665 22,384,086
2001
7,409,948 4,203,919 6,665,209 23,513,161
2002
7,559,183 4,341,375 6,869,600 24,521,451
2003
7,781,875 4,552,231 7,256,171 25,680,662
Growth 2.44% 3.08% 4.19% 5.52%
Source : BPS Indonesia (2003)
Kalimantan Regional Location Quotient Based on the above mentioned GRDP value, the LQ (location quotient) value can be counted to identify the basis of economic sector and comparative advantage of each province. Basically, location quotient is ratio of sectoral contribution to the province GRDP with the contribution of sector in total GRDP of Kalimantan Island. The complete LQ value is as follows:. Table 1-11. Comparison of Location Quotient Value of Central Kalimantan and The Others within Kalimantan Island by sectors
No
1 2 3 4 5 6 7 8 9
LQ Sector
Agriculture Mining and Quarry Processing Industry Electricity and Clean Water Construction Trade/ Hotel/Restaurant Transportation /Telecommunication Finance, Rental, and Firm service Services
West
1.43 0.07 0.76 1.45 1.62 1.53 0.98 2.02 1.95
Central
2.59 0.03 0.31 0.71 1.12 1.51 0.96 0.64 2.02
South
1.37 0.83 0.60 2.17 1.14 1.19 1.09 0.92 1.47
East
0.48 1.50 1.31 0.58 0.75 0.69 0.98 0.78 0.40
Sources: BPS of Central Kalimantan (2003) and calculated by consultant,:
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LQ value less than 1 (LQ = 1) means the sector is not basis sector in the province, while LQ value more than 1 (LQ >1) means the sector become basis sector in the province. 1.3. Population Total population of Central Kalimantan Province is 1,870,707 lives, which consists of 48% female and 52% male. Population density of Central Kalimantan Province is about 9 lives/km2 , the highest density is in City of Palangka Raya for about 70 person/Km2, while the lowest is in District of Murung Raya of 4 person/Km2 . Table 1-12. Total Household, Population, and Gender by Kabupaten/Kota , 2003
No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Name of Kabupaten/Kota Kab, Ktw, Barat Kab, Ktw, Timur Kab, Kapuas Kab, Barito Selatan Kab, Barito Utara Kab, Sukamara Kab, Lamandau Kab, Seruyan Kab, Katingan Kab, Pulang Pisau Kab, Gunung Mas Kab, Barito Timur Kab, Murung Raya Kota Palangka Raya Total House hold 48,402 64,650 77,889 27,837 25,037 7,479 12,645 23,171 29,601 27,557 16,240 18,906 19,899 37,405 436,628 Male 99,928 150,928 166,055 58,588 56,823 17,548 25,761 54,753 65,384 56,525 42,713 39,342 45,374 85,132 964,855 Female 88,566 136,232 163,425 56,843 54,159 15,869 22,728 48,191 59,665 56,909 40,482 38,335 41,131 83,317 905,852 Total 188,494 287,160 329,480 115,431 110,982 33,417 48,489 102,944 125,049 113,434 83,195 77,678 86,505 168,449 1,870,707 Density /Km2 18 17 22 13 13 9 8 6 7 11 8 20 4 70
Figure 1-3. Population of Central Kalimantan Province by Age

Female Male 65 + 60 - 64 55 - 59 50 - 54 45 - 49 40 - 44 35 - 39 30 - 34 25 - 29 20 - 24 15 - 19 10 - 14 5-9 0-4 -50 50 0 Total Population 50 100 150 Thousands
Ages -150 150
-100 100
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1.4. Labor Force Based on the demography situation, investment should be approached by intensive technology industries or extensive area such as plantation, timber estate, etc. Ratio of unproductive age to productive age is 0.6 in year of 2003, which indicates a potency of labor force for investment. However most of the native people is working for agriculture especially food crops cultivation. The other group is transmigration from Java Island, this group relatively has better understanding in agricultural techniques. Characteristic of working force of Central Kalimantan Province is varied year by year, however most of them is elementary graduates level. The third education level was only about 4% or in total 34,168 in year of 2003. New investor who will invest the intensive technology industry should recruit the professional labor force from outside of province. Table 1-13 Working Force of Population more than 10 years old by Education Achievement
No
1 2 3 4 5 6 7 8 9
Education attainment
Not/Never at school Not completed/not yet completed Primary school Junior high school Senior high school Vocational SHS Diploma I/II Diploma III Univercity Total
1999
40,389 157,331 296,120 132,231 78,098 39,723 7,318 9,228 13,294 773,732
2000
34,499 136,901 308,807 155,703 99,888 37,613 4,676 5,440 11,162 794,689
2001
36,666 106,955 337,836 168,448 89,824 32,947 8,136 6,607 14,709 802,128
2002
43,556 134,284 319,019 167,918 115,869 26,403 11,772 5,886 16,144 840,851
2003
31,271 103,294 323,944 168,682 116,002 26,628 12,774 7,756 13,638 803,989
Based on the economic condition and after considering minimum living cost, the government has determined minimum regional wage of Central Kalimantan, by sector of Industry as shown in the following table: Table 1-14 Minimum Regional Wage in Central Kalimantan
No
1 2 3 4 5
Sector
Agriculture Mining and Quarry Processing Industry Construction Services
Minimum Wage (Rp)

506,360 530,475 506,360 516,360 506,360
Source: Dinas Tenaga Kerja of Central Kalimantan (2003)
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1.5. Land Price Picture of land price in Central Kalimantan (categorized into four) is shown by following table: Table 1-15 Land price in Central Kalimantan (in rupiah)
No
1 2 3 4
Location
Urban area in capital city (Palangkaraya, in business center) Urban area of smaller city in downstream (e.g Kotawaringin Barat, Katingan) In the midstream for agriculture and plantation Remote area (e.g upstream of Kapuas river)
Price
300,000 1,000,000 75,000 500,000 500 2,000 50 500
1.6. Other Indicators Insufficient road development in Central Kalimantan still hampers the effort of linking cities or growth centers as development unit in one watershed to other development unit in different watershed. Palangkaraya as provincial capacity in the midstream of river Kahayan has developed into growth center mainly from its activities in governmental administration. As capital Palangkaraya should has appropriate access to other cities and other growth center in Southern coastal area, but its still limited by availability of road access. Low function of road infrastructure has make a more upstream product of Central Kalimantan transported via largest river system of Barito to cross the province Banjarmasin as South Kalimantan growth center. Geoposition of Central Kalimantan Central Kalimantan has direct administrative boundaries with West Kalimantan, East Kalimantan, South Kalimantan. However, the limited function of national road has weaken economic relationship between Central Kalimantan with other Kalimantan province. Intensive economic activities are only active with South Kalimantan, as largest river of Barito links South Kalimantan with upstream and midstream Central Kalimantan production center. Although Central Kalimantan also included in Regional Economic cooperation like IMS-GT (Indonesia, Malaysia, Singapore Growth Triangle) and BIMPEAGA (Brunei, Indonesia, Malaysia, Philippines Eastern Asean Growth Area), but there are no significant progress of the formal cooperation established though the regional cooperation. This condition may caused from less competitive beneficial agreement which can contribute by Central Kalimantan for the benefit of each country (Malaysia, Singapore, Brunei, Philippines) through Regional Economic Cooperation.
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Figure 1-4. Barito Regional Economic Inter Relation
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Export/Import Non-oil export of Central Kalimantan Province was declining since 1999 up to 2002 due to declined forestry sector, and it was improved significantly in year of 2003 and received US$ 101.5 million or it was increased 4% from previous ear. The increasing export is because of improving of external factor of Indonesia national economic condition. Contribution of sector to export revenue was drawn in the following chart.
Shrimp 0.29 Others 31.03 Plywood 8.44
CPO 30.68
Saw Wood 6.42
Rubber 23.14
Figure 1-5. Commodity Contribution to Export While the comparison between export and import value in recent few years is shown in the following table: Table 1-16. Export and Import value in recent five years Year
1998 1999 2000 2001 2002 2003
Source:
Export Value (US$)

118,500,121.06 150,728,857,68 162,683,396.07 89,300,434.88 86,480,434.88 101,553,088.85
Rate
27.20 7.93 -45.11 -3.16 17.42
Import Value (US$)

11,801,040.74 6,428,715.50 9,542,329.20 2,650,177.99 3,876,461.07 4,043,921.80
Rate
-45.52 48.43 -72.23 46.27 4.14
Bappeda of Central Kalimantan Province (2003)
Bank and Non Bank Financial Institutions Beside Bank Central of Indonesia office at Palangka Raya there are 4 (four) State Own Banks (BRI, BPK, Bank Mandiri, BTN, and BNI), two Private Bank (Bank Danamon and Bank International Indonesia), and one Local Bank (Bank Perkreditan Rakyat). Comparing to other province total bank in Central Kalimantan is lower than others because the economic activities of Central Kalimantan still left behind the others. Total credit circulation of 2003 is presented in Table 1-17. Most of credit allocated for agriculture, trade services, and industry at Rp 845,107 million, Rp 220,318 million, and Rp 242,471 million respectively. It is inline with
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economic activities of Central Kalimantan concentrated in agriculture more specific to oil palm plantation. Detail is presented in Table 1-18. Table 1-17. Bank Credit Portfolio of Central Kalimantan by Sectors
Sector/Sub Sector 2000
Agriculture Mining Industry Power, Gas, and Water Construction Trade/Restaurant/Hotel Transportation, services Business Services Social Economic Services Others
304,160.00 622.00 96,478.00 209.00 12,258.00 119,513.00 3,040.00 8,199.00 840.00 213,804.00
Value (million rupiah) 2001

577,461.00 105.00 142,058.00 29,120.00 105,946.00 2,359.00 5,153.00 1,864.00 353,561.00
2002
859,413.00 105.00 264,931.00 18,871.00 164,040.00 9,236.00 12,600.00 1,983.00 444,256.00
2003
863,695.00 49.00 275,141.00 30,047.00 220,318.00 18,151.00 82,143.00 3,586.00 612,922.00 2,106,052.00
759,123.00 1,217,627.00 1,775,435.00 Total Source: Bank of Indonesia branch Central Kalimantan Province (2003)
Total credit circulation is inclining from 2000 to 2003 significantly. However, the coal mining sector in Central Kalimantan area is active significantly, but the credit circulation is lower than other could be because of business oriented of coal mining is South Kalimantan. All the coal from Central Kalimantan is export through Batu Licin or Tri Sakti Harbors of South Kalimantan. Therefore in fact the coal business of Central Kalimantan is managing from South Kalimantan. Inflation Based on calculation of Bappeda, even still in high level, but inflation rate in year 2003 is better than previous year, the inflation decrease to the level 5,68% from 9,18%, this mean the stability of economy was getting better in 2003 in the form of stability of prices. Table 1-18. Inflation rate in Central Kalimantan No
1 2 3 4 5
Year
1999 2000 2001 2002 2003
Inflation (%)
- 0.15 8.57 13.35 9.18 5.68
Source: Bappeda of Central Kalimantan Province (2003)
1.7. Industrial Map Overview of industrial and business infrastructures is presented in Figure 1.6
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Figure 1-6. Map of industrial location in Central Kalimantan (Plantation & Forestry)
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Figure 1-7. Map of industrial location in Central Kalimantan (Mining)
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Figure 1-8. Map of industrial location in Central Kalimantan (Industry)
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Figure 1-9. Map of industrial location in Central Kalimantan (Livestock & Fisheries)
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Figure 1-10. Map of transmigration location in Central Kalimantan
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1.8. Performance of Domestic and Foreign Investment By August 2004 all over the Central Kalimantan, 55 foreign investment companies and 191 local investment companies and 1 (one) production sharing company have been established. Total investment of foreign and domestic capital is presented in the following graphic.
Trillions Rupiah
16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00 PMA PMDN
Sector
Foreign Investment (Million Rupiah) 900,206.50 5,247,112.60 3,428,215.30 6,195,068.70 0.00 0.00 0.00 0.00 118,135.80 15,888,739.00
Domestic Investment (Million Rupiah) 3,510,845.68 3,360,722.35 3,416,246.61 7,164.00 6,406.32 135.00 1,819,705.85 519.82 175,433.00 12,297,178.63
Forestry Wood Industry Plantation Mining Fisheries Transportation Chemical Industry Real Estate Services Total
Source : BKPM of Central Kalimantan Province (2004)
Figure 1-11. Value of investment realization in Central Kalimantan, 2004 Data indicates the domestic investors (PMDN) are concentration in forestry, chemical industry, fisheries, transportation, real estate, and service industries; while the foreign investors (PMA) concentrated in mining and wood industry. While the plantation investment is almost equal between domestic and foreign investors. However the realization of foreign investment was 29.49%, and domestic investment 64%.
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a.
Total Growth of investment in recent 8 years
Progress of total companies that has been invested is presented in the following graphic.
200 180 160 140 120
Total
100 80 60 40 20 0 1997 1998 1999
PMA
PMDN
Kontrak Karya
2000
2001
2002
2003
2004
Figure 1-12. Number of Investment in recent 8 years Investment value is presented in the following graphic.
Trillions Rupiah
35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 1997 1998 1999 2000 2001 2002 2003 2004 Year PMA PMDN
Year
1997 1998 1999 2000 2001 2002 2003 2004
Foreign Investment (Million Rupiah)

7,002,519.98 10,000,696.08 19,467,201.50 21,348,032.97 25,309,716.79 28,907,021.00 15,830,344.24 15,888,738.99
Domestic Investment (Million Rupiah)

5,640,165.00 5,921,310.09 8,289,466.54 10,772,851.33 12,162,875.15 12,166,889.72 12,291,833.68 12,297,178.63
Figure1-13. Investment in recent 8 years
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b.
Investment Growth by Main Sector
Forestry Sector
Trillions Rupiah 4.50 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 1997 1998 1999 2000 Year 2001 2002 2003 PMA PMDN
Year 1997 1998 1999 2000 2002 2003 2004
Foreign Investment (Million Rupiah) 1,294,729.44 1,380,621.85 1,413,048.50 842,155.52 711,956.35 842,155.52 900,206.53
Domestic Investment (Million Rupiah) 2,436,974.30 2,561,312.40 2,621,511.00 3,910,678.27 3,360,722.35 3,510,842.86 3,510,845.68
Figure1-14. Value of Investment Realization in Forestry Wood Industry Sector

Trillions Rupiah 8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 1997 1998 1999 2000 Year 2001 2002 2003 PMA PMDN
Year 1997 1998 1999 2000 2002 2003 2004
Foreign Investment (Million Rupiah) 55,853.50 55,913.94 6,650,510.50 6,758,707.00 7,600,861.50 5,221,189.35 5,247,109.50
Domestic Investmentt (Million Rupiah) 2,017,406.26 2,006,411.92 2,921,183.67 5,731,097.02 3,510,678.27 3,360,722.35 3,360,722.35
Figure1-15. Value of Investment Realization in Wood Industry
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Plantation Sector
Trillions Rupiah 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 1997 1998 1999 2000 Year 2001 2002 2003 PMA PMDN
Year 1997 1998 1999 2000 2002 2003 2004
Foreign Investment (Million Rupiah) 267,758.50 301,758.50 301,758.50 1,837,672.46 1,505,820.90 3,400,271.32 3,428,211.50
Domestic Investment (Million Rupiah) 327,225.41 327,225.41 1,014,379.00 1,099,386.18 3,407,361.68 3,410,903.95 3,416,246.61
Figure1-16. Value of Investment Realization in Plantation Mining Sector

7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 1997 1998 1999 2000 Year 2001 2002 2003 PMA PMDN
Trillions Rupiah
Year 1997 1998 1999 2000 2002 2003 2004
Foreign Investment (Million Rupiah) 799,000.00 97,078.50 822,341.00 1,134,259.21 1,165,690.60 6,190,913.29 6,195,068.69
Domestic Investment (Million Rupiah) 7,164.00 7,164.00 7,164.00 7,164.00 7,164.00 7,164.00 7,164.00
Figure1-17. Value of Investment Realization in Mining

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Fisheries Sector
7,000.00 6,000.00 5,000.00 4,000.00 3,000.00 2,000.00 PMA 1,000.00 0.00 1997 1998 1999 2000 Year 2001 2002 2003 PMDN
Millions Rupiah
Year 1997 1998 1999 2000 2002 2003 2004
Foreign Investment (Million Rupiah) 0 0 0 0 0 0 0
Domestic Investment (Million Rupiah) 4,927.66 5,241.10 5,386.74 6,386.75 6,386.75 6,406.32 6,406.32
Figure1-18. Value of Investment Realization in Fishery Transportation Service Sector

Millions Rupiah 160.00 140.00 120.00 100.00 80.00 60.00 40.00 20.00 0.00 1997 1998 1999 2000 Year 2001 2002 2003 PMA PMDN
Year 1997 1998 1999 2000 2002 2003 2004
Domestic Investment (Million Rupiah) 135 135 135 135 135 135 135
Figure1-19. Value of Investment Realization in Transportation

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Chemical Industry Sector
2.00 1.80 1.60 1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.00 1997
Trillions Rupiah
PMA
PMDN
1998
1999
2000 Year
2001
2002
2003
Year 1997 1998 1999 2000 2002 2003 2004
Domestic Investment (Million Rupiah) 951.83 976.40 1,921.11 16,705.00 1,819,705.85 1,819,705.85 1,819,705.85
Figure1-20. Value of Investment Realization in Chemical Real Estate Sector

Millions Rupiah 600.00 500.00 400.00 300.00 200.00 PMA 100.00 0.00 1997 1998 1999 2000 Year 2001 2002 2003 PMDN
Year 1997 1998 1999 2000 2002 2003 2004
Domestic Investment (Million Rupiah) 519.82 519.82 519.82 519.82 519.82 519.82 519.82
Figure1-21. Value of Investment Realization in Real Estate

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Service Sector
Millions Rupiah
200,000 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 1997 1998 1999 2000 Year 2001 2002 2003 PMA PMDN
Year 1997 1998 1999 2000 2002 2003 2004
Foreign Investment (Million Rupiah) 113,135.00 112,302.85 116,434.70 118,137.51 118,137.51 118,135.81 118,135.81
Domestic Inve stment (Million Rupiah) 0 0 779.60 779.60 54,216.00 175,433.53 175,433.53
Figure1-22. Value of Investment Realization in Service
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CHAPTER II CURRENT SITUATION AND FUTURE PROSPECT OF INFRASTRUCTURE
2.1. Inland Transportation The main constraint of the development is road infrastructure. Lack of road infrastructure is not only to north but also to west and east through central corridor. Currently, Central Kalimantan has two main road corridors, namely: . South corridor, connects following cities: West Kalimantan Pangkalan Bun Sampit Kasongan Palangka Raya Kuala Kapuas and boundary of South Kalimantan (Banjarmasin). Length of south corridor road is about 3,741.05 Km which consist of 1,707.57 Km national road, 1059.68 Km province road and the remaining is district road. Central corridors, connects following cities: West Kalimantan Tumbang Senaman Tumbang Samba Tumbang Jutuh Kuala Kurun Bt Putih Muara Teweh Benangin boundary of East Kalimantan. section most of the road in this corridors still in the form of unpaved road.
The relatively better road condition in south corridor have stimulated investment in many districts especially Kotawaringin Timur and Kotawaringin Barat. The Central Kalimantan Province Government is now trying to promote the infrastructure development in northern part such as District (District) Gunung Mas, Murung Raya, Northern Katingan and Barito Utara to improve economic condition. Beside the length of road also the road quality still in poor condition, as it is presented in Table 2-1. Table 2-1. Length of roads by type of surface in Central Kalimantan Province
Type of Surface Segment Total length L (Km) National 1,707,57 Hot mix (Km) 932,20 Asphalt Penetration (Km) 36,73 Non Asphalt Gravel (Km) 310,85 Earth (Km) 427,79 Good (Km) 543,33 Stable Moderate (Km) 80,42 Condition Non Stable Damage (Km) 156,42 Heavy Damage (Km) 538,99
Province
1,059,68
217,32
323,59
199,52
319,25
150,77
559,70
223,11
126,10
Source : Public Works Service in Central Kalimantan
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Figure 2-1. Graphic of condition and type of road surface
1750 1250 539 126 1000 156 Length (km) 750 80 560 500 543 250 500 151 223 1500 311 37 319 428
1250 Length (km)
1000
750 932
200
324
250
217
0 National Condition Provincial
0 National Provincial Pavement Road
Good Damage
Moderate Heavy Damage
Hot Mix Gravel
Penetration Earth
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Figure 2-2. Map of road class in Central Kalimantan
Investment Opportunities Study For Each Province of East, West, Central and South Kalimanta FINAL REPORT for Central Kalimantan BKPM - JICA
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Figure 2-3. Type of road surface in Central Kalimantan
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Figure 2-4. Road condition in Central Kalimantan
Source : BAPPEDA in Central Kalimantan
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Investment Opportunities Study For Each Province of East, West, Cen FINAL REPORT for Central Kalimantan BKPM - JICA
At present there are four districts which have no direct proper road access to Palangka Raya (provincial capital) which namely: Barito Selatan, Barito Timur, Barito Utara and Murung Raya. Consequently, the four districts would be a part of South Kalimantan economic influence rather than Central Kalimantan . This could also make an additional cost to investors in getting the business permits to Palangkaraya. Government efforts In order to accelerate economic development among districts in Central Kalimantan, development of transportation is a must and the most urgent. The development approaches of regional government are increasing existing road network service and establish the road lines. By improving the existing road quality and establish the new line the equality of development among region will be realized. For this purpose, currently the Central Kalimantan Province Government has initiating to establish new road to connect the Palangkaraya to Buntok with length of 201.60 Km, see Figure 2-5. Road works of Palangkaraya - Buntok will be executed step by step totally requirement of expense equal to Rp. 163.000.000.000,- and a period of construction expected during 3 year.
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Figure 2-5. Condition of road section: Palangkaraya - Buntok
Source : BAPPEDA Central Kalimantan Province
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River Transportation The other transportation important transportation mode is river transportation. River transportation mode is transportation line among cities in Central Kalimantan. The public river transportation modes are motor ship, speed boat, water bus, and cargo boat. Of those transportation mode the speed boat widely use to link the cities of Central Kalimantan. Detail is presented in Table 2-4. and Figure 2-7. River of Kahayan is about 450 m width with 7.0 m depth, connects Pulang Pisau with Palangka Raya, also connects Palangka Raya with District of Gunung Mas. This River can be sailed by ships with capacities 2,000 DWT (Dead Weight Tonage). River of Barito is the longest and biggest river in Central Kalimantan. With around 500 meter width and 8 meter depeth, it can be sailed as far as 700 km from Kuala Kapuas up to Buntok by ship with capacities of 2,000 DWT. While from Buntok to Teweh can be passed by ship with capacities of 1,500 DWT. Kapuas river is about 450 m width with 6 meterdepth. It is used as transportation facliity between hinterland district of Kapuas. This River can be passed by ship with capacities 1,500 DWT. The motor ships could be operated on the rivers of Kahayan, Kumai, Barito, Seruyan, and Jelai only, while cargo boat could serve District (District) of Kotawaringin Barat (Kobar), and District Barito Selatan (Barsel). Table 2-2. River Condition at Central Kalimantan No River Name River Length (Km) Passable Actual potential Passable 200 250 300 175 350 400 650 200 600 600 900 150 190 250 100 300 270 520 150 500 420 700 Width (m) 150 100 150 250 250 350 250 100 450 450 500 Depth (m) 8 4 6 6 5 6 6 5 7 6 8
1 2 3 4 5 6 7 8 9 10 11
Sungai Jelai Sungai Arut Sungai Lamandau Sungai Kumai Sungai Seruyan Sungai Mentaya Sungai Katingan Sungai Sebangau Sungai Kahayan Sungai Kapuas Sungai Barito
Source : Telecommunication Service in Central Kalimantan
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Table 2-3. Data and Information of Canal at Central Kalimantan

Length (Km) 1 1 2 3 4 5 6 7 8 2 Tumbang Nusa Simpur Kelampan Basarang Terusan Raya Terusan Batu Anjir Tamban Anjir Serapat 3 25 2 14,6 24,5 18 6 22 28 Width (m) Max 4 30 30 30 30 30 10 30 30 Min 5 25 25 25 25 25 8 25 25 Deepness of Mean (m) Center Side 6 6 5 2,5 2,5 2,5 2,5 2,5 2,5 7 4 4 1,5 1,5 1,5 1,5 1,5 1,5
No
Name of Canal
Remarks
8 (S, Kah -S, Kah ) (S, Kah -S, Kah) (S, Kah -S, Kap) (S, Kah -S, Kah) (S, Kah -S, Kap) (S, Kah -S,T,Raya) (S, Kap -S,Bar) (S, Kap -S,Bar)
Table 2-4.
River Transportation among City Link of Central Kalimantan Province (2003)

Type transportation mode l Motor Speed Water Cargo ship Boat Bus Boat
No I 1
Name of line Kota Palangka Raya Dermaga Flamboyan a. PRaya Kurun b. PRaya Sepang c. PRaya Tb Miri Pos M. Sungai Batu a. P.Raya - Hanua Dermaga Rambang a. P. Raya - Buntok b. P. Raya - Pangkoh c. P. Raya - Bahaur Dermaga Tangkiling a. Tangkiling - Jutuh/Talaken Dermaga K. Bengkirai a. Kereng B - Pagatan b. Kereng.B - M. Sebagau Kab. Kotim Sampit - Pegatan Kab. Kobar Kab. Barsel Kab. Seruyan Kab. Sukamara
River
18 6 1 12 12 20 -
39 18 16 18 10 1 6 3 28 4 5 40
1 2 13 -
31 1 -
Kahayan Kahayan Kahayan Kahayan Kahayan Kahayan Kahayan Kahayan Kahayan Mentaya Kahayan Kumai Lamandau Barito Seruyan Jelai
2 3
4 5 II 1 III IV V VI
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2.2. Harbor Central Kalimantan has 10 (ten) main river harbors. Of this ten, 3 (three) harbors have been planned to be the main ports, namely: 1. Sampit Harbor 2. Pulang Pisau Harbor, and 3. Kumai Harbor. Port of Pulang Pisau located in District of Pulang Pisau, which occupies strategic position as entrance gate of Central Kalimantan in the eastern part. It is also serves foreign trade (export/import) and servs eight districts/city that are: Mur ung Raya, Barito Utara, Barito Timur, Barito Selatan, Kapuas, Gunung Mas, Palangka Raya and Pulang Pisau. Current depth is 4 m LWS and some parts have deepness less than 3 m LWS, so that difficult to be navigated by passenger ships with draft of more than 3 metre. Governmental to therefore plan development program short-range up to year 2005 covering : Development of concrete wharf Development of passenger terminal Dredging of sea transport path at the verge of river of Mahakam Repair and replacement of appliance assist navigation.
Development plan also conducted in ports of Kotawaringin Timur and Kotawaringin Barat. Development of those ports will affect economics of the surrounding region because of availability of adequate facility for investment in agricultural and mining and other through gateway of Sampit in east area and gateway enter Pangkalan Bun in west area of Central Kalimantan. The remaining seven harbors would be developed as feeder harbors to main harbors: a. Kuala Kapuas Harbor at district Kuala Kapuas b. Pegatan Harbor at district Katingan c. Kuala Pembuang Harbor at district Seruyan d. Samuda Harbor at district Kota Waringin Timur e. Pangkalan Bun Harbor at district Kota Waringin Barat f. Sukamara Harbor at district Sukamara g. Kereng Bangkirai Harbor at district Kota Palangka Raya Destination of respective harbor could be observed in Figure 2-7. 2.3. Airport There are 9 (nine) airports serving the various types of airplane, but most of them could be landed by C 212 plane. The capacity of respective airport is presented in the following Table 2-5.
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Air transportation is operated by five companies : Merpati, Sriwijaya Air, Trigana Air, Kalstar, Deraya and DAS. Airport Air of Cilik Riwut represent biggest airport in Central Kalimantan, with length of runaway 2,100 m and width 30 m have been equipped facility of instrument Landing System ( ILS) to assist landing of plane, this airport can land by plane of type of Boing-737 ( about 200 passenger). Schedule air transport of regular of Airport of Cilik Riwut shall be as follows : Jakarta, Surabaya, Banjarmasin, Puruk Cahu, Muara Teweh, Pangkalan Bun, Sampit and of Kuala Kurun. Frequency of[is each air transport can be seen [at] Table 2-6. Airport Air of Iskandar Pangkalan Bun with length of runaway 1,700 meter can land by plane of Fokker-27 (about 40~60 passenger), Fokker-28 and of CN-235. Target of air transport of airport of Iskandar is Palangka Raya, Semarang, Pontianak Ketapang and Sampit. Airfield Pioneer of Tumbang Samba capable to land by plane of type of BN-2A in this time not operation, because transportation land have opened. Table 2-5. Domestic Air Traffics by Airport (2003)
Airport 1. Iskandar 2. H. Hasan 3. Kuala Pembuang 4. Sangkalemo 5. Sanggu 6. Beringin 7. Tjilik Riwut Flight
Departure Arrival
Passenger
Departure Arrival
Cargo
Departure Arrival
2,056 1,008 0 53 0 225 1,246
2,055 1,008 0 53 0 225 1,247
23,224 10,771 0 332 0 1,468 33,841
24,224 10,795 0 315 0 1,493 33,773
135,523 113,353 0 0 0 68 131,122
134,713 60,100 0 0 0 1,672 374,976
Source : Central Kalimantan in Figures, 2003
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Table 2-6. List Air transport in Central Kalimantan

Frequency per month No Airport Location Type of Airplane Destination Departure Jakarta Surabaya Banjarmasin Pangkalan Bun Muara Teweh Kuala Kurun Puruk Cahu Palangka Raya Semarang Pontianak Ketapang Sampit Surabaya Banjarmasin Palangka Raya Palangka Raya Banjarmasin Palangka Raya 1x 1x 2x 7x 3x 3x 6x 4x 2x 3x 6x 5x 2x 9x 11 x 3x 4x 2x Arrival 7x 3x 3x 6x 4x 2x 3x 6x 5x 2x 9x 11 x 3x 4x 2x
Tjilik Riwut
Palangka Raya
Boeing 737,F-28,C-212
Iskandar
Pangkalan Bun
F-27
3 4 5 6 7 8 9
H. Asan Beringin Sangkalemo Sanggu Dirung Kuala Pembuang Tumbang Samba
Sampit Muara Teweh Kuala Kurun Buntok Puruk Cahu Kuala Pembuang Tumbang Samba
F-27 C-212 C-212 C-212 C-212 C-212 BN-2A
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Table 2-7. List of Harbor Facility in Central Kalimantan

Loading and unloading capacities Loading (Ton/year) Wood Wood Wood Concrete Wood Wood Concrete Concrete Wood Wood Wood Wood 1500 - 2000 1500 - 2000 29,549 6,163 59,046 82,961 200 1,250 1500 - 2000 1500 - 2000 1500 - 2000 1500 - 2000 1500 - 2000 1500 - 2000 1500 - 2000 53,289 4,871 276,322 15,574 70,434 207,724 Unloading (Ton/year) 100,569 31,347 370,136 113,920 539,226 342,676 500 900 Area of warehouse closed (m2) 980 Area of open warehaouse (m2) 1,000 4,338 1,000 3,450 Warehouse of container (m2) 4,338 3,450
No
Name Of Harbor Kuala Kapuas Pulang Pisau Samuda Sampit Kuala Pembuang Pangkala n Bun Kumai
Area District (m2) Kapuas Pulang Pisau Kotim Kotim Seruyan Kobar Kobar 100 1,080 42 1,200 39 85 Unit 1 = 3,450 Unit 2 = 65 Unit 3 = 25
Dock Construction
DWT
1 2 3 4 5 6 7
8 9 10
Sukamara Pegatan K. Bengkirai
Sukamara Katingan P. Raya
46 40 21.5
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Table 2-8. Dock River Facility in Central Kalimantan Province

No
1
Name of Dock
Palangka Raya Rambang Tangkiling B. Bengkel K. Bangkirai Gunung Mas K. Kurun Tewah Kapuas T. Jutuh Mandomai Mentangai Pujon Basarang Pulang Pisau Maliku Bahaur Pangkoh Barito Selatan Jenamas Jelapat Barito Utara Muara Teweh Montalat Murung Raya Puruk Cahu Lamandau Nanga Bulik Sukamara Sungai Rangit Sarang
River
Construction
Wood of ulin Wood of ulin Wood of ulin Wood of ulin Wood of ulin Wood of ulin Wood of ulin Wood of ulin Wood of ulin Wood of ulin Wood of ulin Wood of ulin Wood of ulin Wood of ulin Wood of ulin Wood of ulin Concrete Wood of ulin Concrete Wood of ulin Wood of ulin Wood of ulin
Facility Area (m2 )

1,520 250 250 175 75 60 75 572 210 114 60 210 536 240 395 367 496 90 560 75 4,000 2,400
Condition (%)
40 40 70 40 60 60 60 60 90 90 90 100 100 60 100 70 80 80 80 60 100 100
Passenger Terminal
450 153 30 150 16 117 96 135 30 48 48 30 48 200 200 16 200 16 -
Owner
Kahayan Rungan Kahayan Sebangau Kahayan Kahayan Rungan Kapuas Kapuas Kapuas Anjir Basarang Kapuas Kahayan Kahayan Barito Barito Barito Barito Barito Lamandau Jelai Mapam
Dephub Dephub Pemda Tk. I Pemda Tk. I Pemda Tk. II Pemda Tk. II Pemda Tk. I Dephub Dephub Dephub Dephub Dephub Dephub Dephub Dephub Dephub Dephub Pemda Tk. I Dephub Pemda Tk. I PT. S.Rangit PT. KSK
7 8 9
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Figure 2-6. Water Transportation Network of Central Kalimantan
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Figure 2-7. Airport Network of Central Kalimantan Province
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2.4. Industrial Estate During discussion with government official concerned there is no industrial estate zone has been established. 2.5. Power and Electricity Supply Systems of electricity exist in Central Kalimantan in this time still predominated by PT PLN (Persero) which its operational is conducted by Regional PT PLN of South Kalimantan and Central which domicile in Banjarmasin. To be is regional of Central Kalimantan under operation of PLN branch Palangka Raya and of PLN branch Kuala Kapuas. Condition of electricity in area of Central Kalimantan which carried out by PT. PLN ( Persero) in general still rely on supply of power station of diesel energy as well as some of supply of PLTU Asam-asam through high voltage transmission network 150 KV. Supply from PLTU Asam-asam which channeled to depended Central Kalimantan of requirement of burden in Central Kalimantan and also excess of energy used in South Kalimantan. As for condition of electricity in Central Kalimantan in general shall be as follows : Table 2-9. Condition of Electricity in Central Kalimantan
No 1 Item Energy attached : PT, PLN (Persero) Non PT, PLN (Persero) Total Peak Load Percentage of Usage Alone. PLTD : PT, PLN (Persero) Non PT, PLN (Persero) Total Length network: Low network transmission Middle network transmission High network transmission Amount village have electrics Amount village no electrics Village prosentage have electrics Capacity / Amount
85,042 16,810 101,852 51,409 3,21 142 17 159 1,508,718 1,265,379 144 205 424 32,59
kW kW kW kW % nos nos nos Kms Kms Kms village village %
2 3
Source : PT. PLN (PERSERO) Wilayah Kalsel dan Kalteng Cabang Palangka Raya
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Table 2-10. Source of Electrics Energy each District

No 1 District Kotawaringin Barat Generating System Generating PLTD Pangkalan Bun : PLTD Kumai PLTD Kota Waringin PLTD Rungun PLTD Sungai PLTD Pangkut PLTD Kanambui PLTD Sampit : PLTD Sebabi PLTD Tumbang Kalang PLTD Sukamara PLTD Kuala Jalai PLTD Balai Riam PLTD Nanga Bulik PLTD Tapin Bini PLTD Kudangan PLTD Kuala Pembuang PLTD Danau Sembuluh PLTD Telaga Pulang PLTD Rantau Pulut PLTD Sukamandang PLTD Petak Bahandang PLTD Pendahara PLTD Tumbang Kaman PLTD Baun Bango PLTD Tumbang Hiram PLTD Tbng Senamang PLTD Telaga PLTD Pagatan PLTD Tumbang Samba PLTD Mendawai PLTD Bawan PLTD Kuala Kurun PLTD Tewah PLTD Sepang Simin PLTD Tumbang Jutuh PLTD Tmbng Talakan PLTD Tumbang Miri PLTD Tmbng Tambirah PLTD Tumbang Miwan PLTD Kahayan Grid/Isolated System System PLTD Isolated PLTD Isolated PLTD Isolated PLTD Isolated PLTD Isolated System PLTD Isolated PLTD Isolated PLTD Isolated PLTD Isolated PLTD Isolated PLTD Isolated PLTD Isolated PLTD Isolated PLTD Isolated PLTD Isolated PLTD Isolated PLTD Isolated PLTD Isolated PLTD Isolated PLTD Isolated PLTD Isolated PLTD Isolated PLTD Isolated PLTD Isolated PLTD Isolated PLTD Isolated PLTD Isolated PLTD Isolated PLTD Isolated PLTD Isolated PLTD Isolated PLTD Isolated PLTD Isolated PLTD Isolated PLTD Isolated PLTD Isolated PLTD Isolated System Capable Load (KVA) 3,680 2,500 570 40 202 75 40 13,830 220 80 995 190 70 680 70 40 1765 120 64 130 80 112 615 160 85 80 185 70 460 925 225 85 404 390 334 240 160 135 70 80 6,900 Peak Load (KVA) 2,638 2,300 381 47 128 70 66 8,350 100 73 633 151 64 351 48 46 1,244 102 43 92 52 53 419 130 73 49 66 50 334 660 210 75 362 252 244 223 85 100 45 80 5,600
Kotawaringin Timur Sukamara
Lamandau
Seruyan
Katingan
7 8
Pulang Pisau Gunung Mas
Palangkaraya
Sumber : PT, PLN (PERSERO) Wilayah Kalsel dan Kalteng Cabang Palangka Raya
Systems of Grid only there are in three district that is, Kotawaringin Barat, Kotawaringin Timur and Palangka Raya, while other district still use generating which is insulation. District using system of grid have excellence can account larger ones peak load from insulation system. From tables of above can be seen that supply mean to requirement of electrics in Central Kalimantan can be told still enough, but that way fact there are some area in district of Kotawaringin Timur and Kotawaringin Barat lacking of electrics energy because condition of machine which have is old, so that experience of troub le and at the time of repair of machine hence perforce to be done by extinction by have innings.
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See the condition of this electricity hence PT. PLN (Persero) have planned development of small scale PLTU as follow : In Sampit will be constructed PLTU 2 x 7 MW. In Pangkalan will be constructed PLTU 2 x 6 MW In Kuala Kapuas will be constructed PLTU 13 MW. Figure 2.8. Map of Source of Electrics Energy
Table 2-11. Amount of client of Electrics at District / Kota in Province of Central Kalimantan
No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 District Kota Waringin Barat Kota Waringin Timur Kapuas Barito Selatan Barito Utara Sukamara Lamandau Seruyan Katingan Pulang Pisau Gunung Mas Barito Timur Murung Raya Palangka Raya Population 170,094 279,015 331,205 113,195 110,628 31,940 52,150 85,196 126,682 111,772 80,087 74,005 88,665 179,731 Resident served 114,205 169,750 5,475 4,955 3,836 30,550 2,435 20,185 200,405 Ratio 0,67 0,61 0,17 0,09 0,22 0,24 0,02 0,25 1,11
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From tables of above can be seen that ratio served very low that is : To the 50% resident served by dis trict Kota Waringin Barat and Kota Waringin Timur. Under 30% resident served by district Sukamara, Lamandau, Seruyan, Katingan, Pulang Pisau dan Gunung Mas. Coming near 100% resident served by district of Palangka Raya.
Pursuant to goals development of energy to the fore, hence can be seen by lacking of energy in each district like tables of following : Table 2-12. Ability of Evocation in Province of Central Kalimantan
No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 District / Kota 2005 Kotawaringin Barat Kotawaringin Timur Kapuas Barito Selatan Barito Utara Sukamara Lamandau Seruyan Katingan Pulang Pisau Gunung Mas Barito Timur Murung Raya Palangka Raya Total -7,81 -1,61 -0,29 -4,87 -0,01 -0,83 -15,43 Lacking of electricity power (KVA) 2010 -15,15 -0,07 -2,89 -1,14 -10,94 -0,10 -0,91 -0,94 -0,87 -33,01 2015 -5,45 -28,51 -4,85 -2,74 -4,64 -2,49 -21,58 -0,26 -4,39 -3,40 -0,92 -79,23 2020 -6,85 -28,02 -52,80 -13,30 -9,92 -7,04 -4,64 -40,25 -0,68 -0,53 -11,59 -7,77 -0,97 -3,68 -188,02
In 2005 the new investment on electricity should be needed badly, almost all district in minus situation in 2020. Investment opportunity in electricity power is still wide opened. However Constitution Court (MK) has suspended the Law No 20 regarding involvement the private companies in electrical power supply. So the investment of electricity currently, there is uncertainly private involvement in power supply. Therefore, Consultant recommends the investor should include the electricity power by their own generator as it is a common practice to day. The steam power supply should be the best alternative because the Central Kalimantan has its own coal mining. 2.6. Telecommunication Telephone Regional Office Area (Kandatel) of Palangkaraya is under management of Regional VI. Kandatel of Palangkaraya is serving the area of Palangkaraya, Ampah, Buntok, Kasongan, Kuala Kayan, Kuala Kurun, Kuala Pembuang, Kumai, Muarateweh, Pangkalan Bun, Purukcahu and Sampit. Kandatel of Palangka Raya has facilities of telephone home networks, Call Box,
II-20
Telephone & communication stall ( LC, Telesat, ISDN, and Telkomnet Instance). Detailed capacity is presented in Table 2-13. This table indicates the telephone capacity for this area is almost has been used. Beside the telephone service the other telecommunication service available such as, radio station, TV relay station such as TVRI, RCTI, and Metro TV. Also another telephone operators that served the area of Central Kalimantan are: PT. Telkom that operated the Fixed Telephone and Flexi Telephone (cellular CDMA basis) PT. Telkomsel that operated the cellular GSM basis PT. Excelcomindo (XL) that operated the cellular GSM basis PT. Satelindo/PT. Indosat yang that operated the cellular GSM basis Table 2-13. Central Capacity and Number of Telephone Link By District District /Kota Central Capacity Number of Telecommunication Links Public Phone 275 614 101 14 0 32 27 9 26 570 1,467 Public Internet 1 0 0 1 0 0 0 0 0 8 10 Telephone Ring 5 7 0 0 0 1 3 0 0 66 78 Client 6,222 7,563 2,587 637 0 942 745 513 656 16,574 36,439
1. Kotawaringin Barat 2. Kotawaringin Timur 3. Barito Utara 4. Sukamara 5. Lamandau 6. Seruyan 7. Katingan 8. Gunung Mas 9. Murung Raya 10. Palangka raya Total
6,563 8,597 2,689 665 0 1,022 1,024 608 792 17,005 38,965
Source : Central Kalimantan in Figures, 2003
The establishment telecommunication system in Central Kalimantan could be facilitating the investors in operating the business and it could help the business efficiency to access the information from other areas and international as well. Also by these facilities, the investors could make telecommunication with their customers or their main offices in Jakarta or abroad as well. Therefore the investors could have information immediately and up dating their business strategy whenever needed.
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CHAPTER III CURRENT SITUATION AND FUTURE PROSPECT OF MAJOR SECTORS 3.1 Current Major Sector Based on current Gross Regional Domestic Product (GRDP) and anlaysis of location quoitient (LQ), major sectors in Central Kalimantan economy are Agriculture and Trading. Each contributes about 43% and 18% respectively. Agriculture sector has two dominant major sectors with significant contribution which are plantation and forestry sub sector. The other sub sectors have not yet had significant contribution to provincial economy. If compared to the growth of plantation sub sector, growth of food crops, animal husbandry and fishery sub sector are relatively low over the latest years. Forestry sub sector has ever became the main business sector in range of year 1970 to 1997, as the province had a large area of topical forest. However, the trend changed in recent years as timber potency in natural forest decreased caused by unsustainable forest management and many illegal extraction activities, while in the same time plantation business grew and took over the role of forestry. Contribution of plantation to GRDP significantly increased year over year resulted from rapid growth of planting area and development of plantation industries (see Table 3.1). The rapid growth has been driven by investment of big private companies in palm oil plantation and support from Government of Central Kalimantan through providing large area for plantation. Tabel 3-1. Contribution of plantation and forestry sub sector to GRDP Year
2000 2001 2002 2003
Plantation Share Growth (%)

10.16 14.59 19.33 22.44 + 43.1 + 43.6 + 32.5 + 16.1
Share
17.59 15.52 13.71 10.94
Forestry Growth (%)

-10.13 -9.19 -8.52 -20.2
Source : Policy and Spatial Plan and Infrastructure Development Strategy to Support Devlopment of Plantation in Central Kalinantan Dinas Perkebunan - 2003
Considering the low population number and relatively poor infrastructure condition, Local Government of Central Kalimantan projects that in the next one decade, Central Kalimantan will persist to become major sector at least in the next decade (Bappeda of Central Kalimantan, 2004). 1. Plantation Sub Sector Having tropic equatorial climate (means rainfall around 2,732 mm and temperature range between 29-32OC) and dominated soil type of red-yellow podsolic, major area of Central Kalimantan are suitable for plantation.
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In 1984, Agriculture Development Master Plan issued by provincial government had identified the area suitable for plantation at a total number of 3.139.500 ha or around 20.2% of the total area of Central Kalimantan. These suitable locations are mainly spread over the area available for production utilization. That identification is in line with several soil investigations that undertaken by universities and other agency although not all of Central Kalimantan had been covered, some locations with their suitable commodities are already identified. Table 3-2. Surveyed regions and recommended commodities
No
1
Region
Along Kahayan river (Gunung Mas, Palangkaraya, Pulang Pisau) 1. Barito Selatan 2. Barito Utara 3. Kapuas 4. Murung Raya
Commodities
Oil Palm, Rubber, Coffee, clove
Area (ha)
811,200
Source
Suvey by LPT Bogor, 1983 Suvey LPT Bogor, 1975
5. 1. 2. 3. 4.
Barito Timur Kotawaringin Timur Kotawaringin Barat Katingan Gunung Mas
- Rubber, Clove, Rattan - Rubber, Clove, Tengkawang, Coconut, Jambu Mete dan Rattan - Rubber, Coconut, Rattan - Rubber, Coconut, Clove, Coffee dan Jambu Mete - Rubber, Jambu Mete Oil Palm, Rubber, Coconut, Pepper, Coffee, Rattan
2,805,824
2,225,000
Survey by Orstom yr. 1981
Sourcer: Annual Report of Dinas Perkebunan Central Kalimantan Province (2003)
Current Plantation Commodities and Area Central Kalimantan Province is recognized as the 5th largest plantation area in the national scale. The total area of plantation in 2004 is recorded 808,093 ha, consist of at least twelve major annual crops commodities which covering area of 807,254.55 ha, and six seasonal crops commodities which covering area of 839.30 ha. Such large difference between annual and seasonal crops area indicates that frequent fitting is inappropriate for yellow-podsolic soil. Based on ownership status, plantation can be categorized into three categories which are smallholder plantation, big private plantation, and state plantation. At present, smallholder plantation is the largest with share about 61.8%, while private plantation only 37.5%, and state plantation 0.68%. The area of each commodities and ownership status for annual and seasonal crops is described in the following table:
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Table 3-3. Plantation area of each commoditty and ownership status (aug 2004)
Commodity
Annual Crops Oil Pam Rubber Coconut Dalam Coffee Pepper Kemiri Kakao Aren Jambu Mete Pinang Clove Kapuk/Randu Total % Seasonal Crops Pisang Abacca Ginger Nilam Sereh Wangi Tebu Jarak Total % Total I + II %
Area (ha) Small holder State Owned

57,140.00 349,152.78 72,039.30 8,551.95 7,653.60 1,110.60 885.00 807.00 463.00 325.00 204.00 149.00 498,481.23 61.75 20.00 111.30 450.00 5.00 25.00 178.00 789.30 94 499,271.05 61.78 5,464.00 5,464.00 0.68 0 0 5,464.00 0.68
Private
300,580.30 2,728.50 303,308.80 37.57 50.00 50.00 6 303,358.80 37.54
Total
357,720.30 357,345.28 72,039.30 8,551.95 7,653.60 1,110.60 885.00 807.00 463.00 325.00 204.00 149.00 807,254.03
44.31 44.27 8.92 1.06 0.95 0.14 0.11 0.10 0.06 0.04 0.03 0.02 100.00
20.00 111.30 500.00 5.00 25.00 178.00 839.30 808,093.85
2.4 13.3 59.6 0.6 3.0 21.2 100
Sourcer: Statistic of Plantation of Central Kalimantan (2004)
The table above shows that oil palm plantation is primadona of plantation commoditi as it occupies about 44.31% of the total annual crops plantation area. Most of oil palm plantation is owned by big private company (85%) while small holder oil palm plantation only 15%, which runs under partnership scheme with big private company. In the other hand, rubber commodity as the second largest area mostly owned by smallholder (98%), and only a few owned by private and state companies (2%). By taking the growth rate of oil palm plantation area into account and under constant business and investment environment, consultant estimates that the oil palm area in 2007 will reach at least 410,000 ha, while rubber will reach 372,345 ha. The complete projection of four major commodities can be seen in the following Table.
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Table 3-4. Growth and projection of area of four major commodities

Commodity
Oil Palm Rubber Coconut Pepper
2001
252,625 332,799 66,760 5,387
2002
295,946 336,286 68,338 6,097
Area (ha) 2003 2004

343,323 347,409 71,329 7,708 357.720 357,345 72,039 7,653
2006
392,000 367,345 74,039 7,553
2007
410,000 372,345 75,039 7,500
Source: Statistic of National Agriculture 2003 and Kalimantan Tengah in Figure (2001-2003)
Area of plantation in Central Kalimantan are distributed in all districts. Currently the largest one is owned by District of Kotawaringin Barat (19.3% of total plantation area), followed by District of Kotawaringin Timur (18.0%). Tabel 3-5. Plantation area of each district and ownership status (2004)
District
Kotawaringin Barat Kotawaringin Timur Seruyan Barito Utara Barito Timur Gunung Mas Murung Raya Kapuas Barito Selatan Sukamara Lamandau Katingan Pulang Pisau Palangkaraya Total
Plantation Area (ha) Small Holder State Owned

64,132.00 63,692.00 19,212.00 55,559.68 56,272.80 49,102.00 41,158.02 35,961.00 33,757.55 12,655.00 13,760.00 10,715.00 41,434.00 1,826.00 499,271.05
Private
Total
%
19,3 18,0 10,2 9,0 7,8 6,1 5,1 4,5 4,4 4,0 3,6 2,8 5,1 0,2
90,537.00 1,696.00 156,365.00 81,696.00 145,388.00 63,125.00 82,337.00 16,828.00 72,387.68 4,713.00 1,826.00 62,812.30 49,102.00 41,158.02 35,961.00 1,942.00 35,699.55 19,794.30 32,449.30 15,010.00 28,770.00 11,655.00 22,370.00 41,434.00 1,826.00 5,464.00 303,358.80 808,093.85
Source : Plantation Statistic of Central kalimantan (2004)
In line with the current plantation area, major primary products of plantation industry are crude palm oil (CPO) and crumb rubber (SIR 20). The trend of plantation industry product growth in recent years can be seen in the Table 3-9 and the graphics can be seen in the figure 3-6: Table 3-6. Production of major plantation industry product in recent years
Commodity
Oil Palm Rubber Cocunut Pepper
Product
CPO PKO SIR 20 Kopra Pepper
2001
162,759 28,483 56,400 63,269 6,462
Production (Ton) 2002

237,000 48,000 56,400 59,624 6,023
2003
380,851 73,147 56,400 78,150 6,083
Source: Statisitic of Plantation (2003) and Dinas Perkebunan of Kalimantan Tengah (2003)
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400,000 350,000 300,000 250,000 200,000
162,759 237,000 380,851
CPO SIR 20 Pepper
PKO Kopra
150,000 100,000
56,400 63,269 56,400 59,624 56,400
78,150
50,000 0
2001
2002
2003
Figure 3.1. Graphic of major plantation product in recent years Market of Plantation Product Plantation products are marketed both to domestic and export. Products for domestic market are coconut and its derivative, CPO and PKO, Standard Indonesian Rubber (SIR), Pepper powder, small amount of coffee and cacao. While the products for export market are SIR20 and CPO, which are directly exported from Central Kalimantan or through the other provinces in Indonesia. Table 3-7. Market of Plantation Products of Central Kalimantan(2004)
No
1 2 3 4 5
Comoditties
Palm Oil Rubber Coconut Pepper Others
Product
CPO PKO SIR 20 Kopra Pepper Coffee, Caccao
Volume (ton)
338,301 42,550 73,147 23,156 33,244 78,150 6,083 -
Market
Domestic Direct Export (Malaysia) Domestic Downstream Industry Domestic Downstream Industry Direct Export (Korea, Cina, Rumania, Greece, Brazil, UK, Germany) - Domestic - Domestic/Local - Domestic
Source: Bank of Indonesia Central Kalimantan Branch (2004)
Prospective Commodity of Plantation Sub Sector Considering natural condition and availability of land to be developed, plantation business is still prospective in Central Kalimantan. Basically, investment opportunity in plantation covering various types such as: farm productivity, processing plant, financial assistance (e.g. loan to farmers), human resource development and research and development. Rubber and oil palm are wo most suitable commodities to grow on red-yellow podsolic soil and humid tropical weather of Central Kalimantan, and gains a growing demand in global market.
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For other commodities such as coconut and pepper, the demand is still limited and dominantly absorbed by domestic market. The Dinas Perkebunan of Central Kalimantan reported that in 1995, some plantation businessmen had tried to develop pepper and cacao in a wide scale plantation, however the effort was stopped as they prefer to change the commodity into oil alm (General Condition of Plantation in Central Kalimantan- Dinas Perkebunan of Central Kalimantan, 2003). 2. Forestry Sub Sector Central Kalimantan has about 15,187,000 ha forest area or the second largest in Indonesia after province of Papua (Ministry of Forestry, 2004). This has made sub sector of forestry still become one of economic pillars, even though the production decreased in recent years. Table 3-8. Rank of Central Kalimantan forest area in national scale
No
1 2 3 4 5
Province
Papua Central Kalimantan East Kalimantan Riau West Kalimantan
Permanent
30,962,000 10,872,000 14,361,000 4,888,000 10,872,000
Forest area Conversion

8,783,000 4,315,000 4,595,000 4,315,000
Total
39,475,000 15,187,000 14,361,000 9,484,000 8,921,000
Source: Badan Planologi Kehutanan 2004
Consultant estimates based on Landsat image 2003 that primary forest covers + 62% from total forest area, secondary forest + 36%, and timber estate (+ 2%). Natural Forest Concession and Timber Estate Area Natural Forest Concession Area The natural forest exploitation in Central Kalimantan started in 1967 as central government issued law no 5 year 1967 about Forestry, law no 1 year 1967 about Foreign Investment and law no 6 year 1968 about Domestic Investment. Those laws became basis of first period of massive natural forest exploitation and marked by establishment of forest concession (HPH) and forestry industries such as plywood, particle board, pulp mill, etc. The golden era of natural timber extraction is during period of 1978-1990 when the number of HPH reached 117 units. After that, in the periode of 1997 until now, the number of HPH (in latest term also called as IUPHHK/Izin Usaha Pemanfaatan Hasil Hutan Kayu) decreases until more than 50%.
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Table 3-9. Natural forest concession in Central Kalimantan

Period
Pelita IV (1984/1985) Pelita V (1989/1990) Year 2001 Year 2002 Year 2003
HPH Number Area (ha) 112 11,231,500 117 11,862,500 63 5,203,256 56 4,807,885 44 3,444,215
Log product (m3)

3,464,009.00 4,830,638.16 2,577,995.42 1,281,431.65 1,201,807.74
Source: Explanation of Governor of Central Kalimantan (2004)
At present, forestry sub sector is facing a hard period, however with remaining 44 units of HPH/IUPHH, Central Kalimantan still become the third biggest log producer in Indonesia after Riau and East Kalimantan. Table 3-10. Biggest five provinces with number of HPH and log product
No
1 2 3 4 5
Province
East Kalimantan Central Kalimantan Papua Maluku Riau
HPH 2001 74 63 50 28 25 2003 61 44 49 11 15
Log Product (m3)

1,255,911.31 1,201,807.74 694,244.49 90,051.45 2,285,724.81
Source: Badan Planologi Kehutanan 2004
Dominant natural timber species is from family of Dipterocarpaceae such as Meranti, Keruing, Kapur, etc, and some non-dipterocarpaceae such as Agathis, Ramin, Alau, Mentibu, etc. Based on database held by Ministry of Forestry, average of mass of standing (tree) in Central Kalimantan for type of Dipterocarpaceae with diameter 50 cm is 33,14 m3/ha, for diameter 35 cm is 48,43 m3/ha, for the other commercial species with diameter 50 cm is 4,96 m3/ha and 35 cm reachs 12,87 m3/ha. Timber Estate Area Timber esatate (in latest term called as IUPHHK/Izin Usaha Pemanfatan Hasil Hutan Kayu pada hutan tanamanan) is an alternative source of timber to meet the increasing demand of wood. Considering the shortage of wood from natural forest, the real future prospect of forestry industry is in development of timber estate. with about 10 units of timber estate (2003), Central Kalimantan is counted as the fifth largest timber estate area in Indonesia. The comparation of big five provinces with large timber estate area in national scale is presented in the table 3.11.
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Table 3-11. Big five province with area of timber estate (HTI) No
1 2 3 4 5
Province
Riau EastKalimantan Jambi West Kalimantan Central Kalimantan
HTI
Pulp 613,832 408,116 191,130 412,896 166,880 Hardwood (Non-Trans*) 109,692 163,396 451,375 56,060 0 Hardwood (Trans**) 83,190 130,061 34,994 94,062 118,409
Source: Badan Planologi Kehutanan (2003) Note: * Not owned by transmigrant; ** Owned by transmigrant as part of transmigration program
Deforestation of Natural Forest and Degreded Land Based on Ministry of Forestry, deforestation rate in forest area of Central Kalimantan in 1997 is about 138,208 ha/year. It has generated many degraded land which up to this moment has reached 2,815,803 ha area of degraded land inside forest area. In addition, there are also land degradation outside of forest area which caused mainly by inetnsive land clearing, mining activities, illegal logging, etc. Assessment on land degradation of Central Kalimantan Province is presented in Table 3-12. Table 3-12. Total Land Degradation No 1 2 Location Within the forest area Outside of forest area Total Total area (Ha) 2,815,803 1,515,389 4,331,092
Source: Governor of Central Kalimantan, Quo Vadis Kehutanan Kalimantan Tengah, 2001
800,000 Size in hectare 600,000 400,000 200,000 0 Palangkaraya Kapuas Barito Utara Barito Selatan Kotaw aringin Timur Kotaw aringin Barat 11,540 759,449 217,730 250,370 152,500 123,700
Figure 3.2. Land degradation outside of the forest area
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As a matter of fact the land degradation outside of the forest area is presented in Figure 3-2. The watershed of Kapuas and Barito are the most degraded land area in which most the economic activities of coal mining and plantation located. It is clear relationship between land degradation and economic activities. Learnt from previous experiences of investment in Central Kalimantan, therefore the next investment activities should take into account the environmental protection aspect seriously. Forestry Industrial Product The major product of secondary industry are plywood, moulding, flooring, and sawn timber. The growth of each product can be seen in the following table: Table 3-13. Production of major forestry industry products in recent years
Comodity 2000
Plywood Moulding Lumber Core Block Board Sawn Timber Veneer Total 186,597.84 84,708.83 873,85 302.20 130,135.05 21,759.03 404,376.80
Production (M3) 2001 2002

161,350.05 47,252.24 421.12 360.22 131,620.50 17,502.20 358,506.33 164,830.88 32,681.85 227.56 527.38 134,638.65 15,108.64 348,014.95
Growth 2003
93,260.23 19,604.51 13.13 505.18 141,688.66 9,550.71 264,622.42 -20.6 -38.6 -75.3 18.6 2.8 -24.0
National (2003)
3,295,490 128,906 1,134,532 5,521,307
Source: Statistik of Kalimantan Tengah 2003 (diolah)
Central Kalimantan is the 8th biggest plywood producer in Indonesia, under the rank of Central Java and Jambi. Central Kalimantan also not included in the biggest ten of sawn timber producer as it takes place in the rank of 18th. This condition shows that many investors in the past time choosen South Kalimantan for locating their factories, eventhough they have been using wood from Central Kalimantan for raw material of the industries. South Kalimatan known as the third largest producer of plywood, several consideration of investor to choose South Kalimantan for forestry industries is especially infrastructure condition which is better than Central Kalimantan. Table 3-14. Rank of plywood production of Central Kalimantan in national scale, (2003) No
1 2 3 4 5 6 7 8
Province
East Kalimantan North Sumatera South Kalimantan West Kalimantan Papua Jambi Central Jawa Central Kalimantan
Production
1,655,832.40 312,194.66 297,606.02 228,177.50 198,953.33 179,463.12 109,710.84 93,260.23
Source: Ministry of Forestry (2003)
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Non Timber Forest Product The major non-timber forest products are various species of Rattan, Jelutung, Damar, Kemedangan, Tengkawang Seed, Kulit Kayu Gemor, Gaharu, Sirap and bird nest. Based on inventory by Pilot Project KPHP in Central Kalimantan conducted by United Kingdom Indonesia Tropical Forest Management Programme (UK-ITFMP) year 1994 1997, forest area of Cental Kalimantan also has potentiality for herbal medicine such as Pasak Bumi, Saluang Belum, Akar Kuning, Akar Ginseng, Sintuk, Akar Busi, etc. The other potentiality of forest is intangible benefit such as biodiversity of flora and fauna, nature tourism, etc. This potential requires the existing of forest trees as the major component of forest ecosytem. Market of Forestry Product Forestry industry products have a wide market segment as it have good export demand as well as domestic demand. The domestic market absorb several kinds of product mostly sawn timber, plywood, and rattan. Tabel 3-15. Market destination of various forestry product year 2002
No
1
Commodity
Wood
Product
Plywood Moulding Lumber core Block board Veneer Sawn Timber Weaving
Destination
Domestic; Export to: Japan, Arab, Korea, Europe, Taiwan, Mexico Export to: Japan, Korea, Australia, Netherland, Belgium, Germany, China, Thailand, Denmark, Italy, Greece, Polandia Export to: USA, Taiwan Export to: China Export Domestic to: Java, Sumatera Domestic to: Cirebon Export to India
Rattan
Source: Dinas Perindustrian Central Kalimantan Province (2003)
Prospective Commodity of Forestry Sub Sector To maintain the natural forest sustainability, natural timber exploitation is strictly controlled by government. Several real action such as revoking of many usnsustainable forest concessions (HPH). In year 2000, through Presidential Decree no. 96/2000 jo.118/2000, government also has included HPH as business field that closed to investment in which a part of the share are owned by foreign citizen and/or foreign business entities. Government also applied tight control on several secondary industries of forestry, through the same decree government has decided that plywood industry is included in negative list for new investment unless for province of Papua, while new sawn industry also only allowed for Papua unless it using raw material from timber estate.
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In up coming years, timber estate (IUPHHT) seems to be the most possible timber source to response the market demand either as for log or secondary product. Timber estate is expected to produce a more sustainable product for pulp and hardwood product. Several secondary industries, which are not included in negative list, can use sustainable raw material from timber estate such as pulp and paper, particleboard, and furniture industry. The other prospective commodities are various non-timber forest products such as rattan, herbal medicine, and environmental services. Based on previous survey, one of the most prospective commodities of non-timber forest product is rattan, currently it has prospective market for raw materials, handicrafts or furniture, meanwhile the rattan can be provided in sustain manner as it can be produced from rattan cultivation. 3. Food Crops Sub Sector Food crops agriculture is one of traditional culture of native people in Central Kalimantan. Since long time ago, the Dayaknese has developed their cultivation system for their own needs on food mainly on paddy. The first popular cultivation system is shifting cutivation, application of this system in the past time also stimulated by the natural condition (land fertility, water, etc.) and availability of abundant land. In recent decades, fix cultivation for paddy and other food crops commodities have been widely applied, in line with penetration of new agriculture culture, government program and also technology introduction. In 2003, food crops sub sector contribute about 6% to local GRDP, this number is low if compared with contribution of plantation and forestry sub sector. This is mainly caused by basic characteristic of native people agriculture, which is oriented to meet their own need (called as subsisten system). However, in 2003, productivity of food crops, especially for wetland and dryland paddy increased for about 24% from the previous year (2002). The increasing caused by development of planted area and tight contolling of illegal logging, so that many people back work on food crops and leaving logging work. Food Crops Commodities and Area The present food crops area is about 215,351 ha, consists of paddy, vegetables, and horticulture commodities. Food crops agriculture mainly concentrated in Kapuas, Pulang Pisau, Kotawaringin Timur, Kotawaringin Barat, and Barito Utara. In 2003, District of Kapuas is the biggest paddy producer in Central Kalimantan, it produced about 197,871 ton paddy from 75,019 ha of paddy field. The second is District of Pulang Pisau which produced 72,626 ton of paddy from27,974 ha of paddy field.
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Table 3-16. Area of food crops agriculture in Central Kalimantan Commodities

Paddy Soybean Corn Peanuts Cassava Sweet Potatoes Vegetable Fruits
Area (Ha)
194,857 1,354 5,580 1,711 9,969 1,558 11,244 47,322
Area Growth
23.44 -28,06 15.70 17.68 8.38 -43.28 27.07 -
Production in 2003 (Ton)

489,046 1,461 9,136 1,861 119,756 10,603 15,417 105,517
Production Growth
23.73 -28.24 18.19 18.23 9.64 -43.24 -18.97 -
Source: Dinas Pertanian of Central Kalimantan (2003)
District of Kapuas is also the biggest producer of Cassava (26,251 ton), Corn (1,712 ton) and Sweet Potatoes (2,624 ton). The second largest is also Pulang Pisau, then its followed by Kotawaringin Barat and Katingan. Vegetables mainly produced in Kotawaringin Timur (13,741 ton), then followed by Kapuas (8,826 ton). While the biggest fiuits producer is Kapuas, Kotawaringin Timur and Kotawaringin Barat Market of Food Crops and Horticulture Sub Sector Products of food crops sub sector dominated by primary products, which are marketed to local/domestic market. The large secondary industry has not yet been developed, and the existing secondary industry mostly is small or medium scale industry. Prospective Commodity of Food Crops and Horticulture Sub Sector Some area of Central Kalimantan, especially those which have non-fertil soil type are very limited in developing food crops agriculture, however there are still a lot of fertil site that suitable for food crops especially in District of Kapuas, Pulang Pisau and Kotawaringin Timur. Area of investment opportunity in food crops covering: farm productivity, Postharvest facilities, Processing plant considering up to now Central Kalimantan does not have any signficants food processing industry, Financial assistance farmer, Human resource development, Research and development. Based on statistical data, consultant make list of several major commodities that suitable in each strategic regencies are as follows:

Kapuas is suitable for paddy, corn, soybean, fruit especially pineapple, banana, estimation of available land is about 38,000 Ha. Kotawaringin Timur is suitable for paddy, corn, pineapple, cassava, estimation of available land is 10,000. Barito Selatan is suitable for paddy, corn, soybean and cassava, estimation of available land is about 20,000 ha.
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Considering the market demand and suitabitlity of land, fruit commodities especially canned pineapple is one of the most potential commodities. Export demand for canned Pineapple is increase while the supply is limited, and land for this commoditiy is available mostly in District of Kapuas. 3.2. Commodity Analysis In previous description, through analysis of current major sector several commodities are identified as prospective commodities. The next step in this sub chapter is determination of competitiveness of each commoddity using several considerations. Competitiveness is the level of possibility for investment from the consultants point of view, it is divided into three categories that are high, moderate and low. The high competitivenss commoditiy means the commoditiy is possible for investment. The considerations it self are common components of investment feasibility such as availability of space, market condition, labour condition and infrastructure. If necessary, supporting business condition, sectoral policy and other specific consideration also taken into account. The material and process of analysis are presented in the table 3-18 in which several business opportunitiy are indicated having high competitiveness and will be further analyzed in next sub chapter, these opportunities are: 1. 2. 3. 4. 5. 6. 7. 8. Pineapple plantation and canning Oil palm plantation and CPO mills Cooking oil industry Rubber plantation and nursery Timber estate and pulp and paper industry Panel boards industry; Particle board and MDF Rattan furniture Ecotourism in Tanjung Puting National Park
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Table 3-17. Qualitative Potential of Sectoral Commodities in Central Kalimantan for Investment
Province: Central Kalimantan Catatan: Data-data yang diisi hanya indikator minimum
Province Industrial Commodities (A) Primary Sector 1. Food Crops: Corns Citrus/ Mandarin Aloe Vera Pineapples Banana 2. Plantation: Rubber (Sheet Rubber) Coconut Pepper Cacao Cashew nut Sugarcane Abaca Oil Palm CK Location Area and Suitability
Labour Condition
Land Trans.
Infrastructure Limitation (Province) River Port Facilities Electricity Trans.
Water Supply
Present Production
National
Market Condition Regional / Export
Growth & Trends
Remarks
Competitiveness
Kapuas Barito Selatan Pulang Pisau
Suitable 38.000 Ha Suitable 16.910 Ha Suitable 9.500 Ha
Moderate (506.360) Available Unskilled (506.360) Available Unskilled (506.360) Available
Available Available Available
Kuala Kapuas/2000 Trisakti/3500 Pulang Pisau/2000
Independent Independent Available PLN
Independent Independent
low low
no no no
no no no
increase increase flat
- high international market demmand, lack of national supply - low demmand from national/international market
high low
Available PAM low
Barito Utara Suitable 52.000 Ha Barito Timur Suitable 50.000 Ha Kotawaringin Tmr Suitable 50.000 Ha
Unskilled (506.360) Available Unskilled (506.360) Available Unskilled (506.360) Available
Available Available Available
Trisakti/3500 Trisakti/3500 Samuda/2000
Available PLTD Independent Available PLTD Independent Independent Independent
moderate Sig. National moderate low - moderate Sig. National
Sig. Export no
Increase Increase
- Dominant small holder (95%) with low quality SR for export and domestic market - Dominant small holder, consumed by national market
moderate low-moderate
Gunung Mas
Suitable 100.000 Ha
Unskilled (506.360) Damage
Available
Pulang Pisau/2000
Independent
Independent
nat rank
sig national
dominant
increase
- high demmand of CPO from international market
high
3. Forestry: HTI Mangrove 4. Livestock: Cattle Pig 5. Fisheries: Marine catching Marine aquaculture (grouper, crustache, seaweed) Brackish aquaculture (milkfish, shrimp) Freshwater aquaculture (Betutu) 6. Mining: Coal
Barito Utara
Suitable > 100.000 Ha
Unskilled (506.360) Damaged
Available
Trisakti/3500
Independent
Independent
low-moderate
no export
flat
- high capital intensive and long term return but high demmand of pulp in world market
high
Seruyan Pulang Pisau
Suitable 80.000 Ha Suitable 100 Ha
Unskilled (506.360) Available Unskilled (506.360) Available
Available Available
Kuala Pembuang/2000 Independent Pulang Pisau/2000 available PLN
Independent
moderate
Dominant Sig. National
no Sig. Export
Increase Increase
- avoid excessive mangrove destruction for semi intensive - High demmand of national and export market
low-moderate low-moderate
available PAM moderate
Murung Raya North Barito South Barito
130.580 K.Ton 458.974,5 K Ton 95.000 K Ton
Unskilled (530.475) Available Unskilled (530.475) Available Unskilled (530.475) Available
Seasonal Seasonal Seasonal
Trisakti/3500 Trisakti/3500 Trisakti/3500
Independent Independent Independent
Independent Independent Independent
low low low
Sign. National Sign. National Sign. National
dominant dominant dominant
Increase Increase Increase
low-moderate low-moderate low-moderate
Quartz Kaolin Gold Silver Bauxite
Murung Raya
unknown
Unskilled (530.475) Available
Seasonal
Trisakti/3500
Independent
Independent
low
Sign. National
dominant
flat
low
high moderate low
skilled (UMR): means availability of skilled labor moderate (UMR): means availability of labor but need training unskilled (UMR): labor of indigenous traditional
Pontianak/DWT Ketapang/DWT ./DWT
available PLN independent supply
available PAM independent supply
increase flat decrease
available: has good quality road but below standard for volume/ load capacity damage: major road are damage to heavy damage
suitable/Ha marginal/Ha not suitable/Ha (Ha = potential area)
available: can be sailed through year seasonal: difficult in dry season
Nat-rank: production between 1-10 rank of national production moderate low not available
significant national: significant volume for national market dominant local: consume only for local market
dominant export: large number of production (>50%) for export market significant export: some number of production (<50%) for export market
Province Industrial Commodities (B) Secondary Sector 1. Food industry: Maizena, banana powder Canning fruit juice (Aloe Vera, citrus, coconut and pineapple) Coco, Cacao powder Canning beef and sausage, chilled meat Canning fish processing Pharmaceutical industry Animal feed for cattle and poultry 2. Wood industry: Plywood Chip board/ Particle board Vener Sawn timber Wooden floor tile Rattan Furniture CK Location
Raw Material Condition
Labour Condition
Land Trans.
Water Supply
Present Production
National
Growth & Trends
Remarks
Competitiveness
Kapuas
See A.1
Unskilled (506.360)
available
available
Kuala Kapuas/2000
Available PLN
Available PAM low
no
no
increase
- high international market demmand, lack of national supply
high
Sampit Sampit
moderate moderate
Unskilled (506.360) Unskilled (506.360)
available available
available available
Samuda/2000 Samuda/2000
low-moderate low
sig. National
dominant dominant
decrease flat
- Shortage of raw maerial, industry should have HPH - high international market demmand, most factory owned by plywood industry
low - moderate high
Sampit
nat. rank
Unskilled (506.360)
available
available
Samuda/2000
Available PLN
Available PAM nat. rank
sig. National
dominant
increase
High export and natioanl demmand but need qualtiy workmanship
high
3. Pulp and Paper industry: Pulp industry (capital intensive) Paper industry: - industrial paper - culture paper - newsprint 4. Palm oil industry: Cooking oil Margarine Shortening (oleo food) 5. Manufacturing industry: Rubber industry (tire, etc) Metal industry Ceramic industry (china, table ware) Charcoal (mangrove) Biomass (wood and palm oil waste) Handicraft (wood, rattan, jewelry) 6. Chemical/ Petroleum industry: Gas and petroleum chemical industry Fertilizer industry Essence oil (ginger, patchouli, cassiavera) Marine paint Plastic/ flexible packaging Lubrication oil 7. Ship building: Wooden ship building Ship repair 8. Mining industry: Cement factory high moderate low skilled (UMR): means availability of skilled labor moderate (UMR): means availability of labor but need training unskilled (UMR): labor of indigenous traditional Pontianak/DWT Ketapang/DWT ./DWT available PLN independent supply available PAM independent supply increase flat decrease Nat-rank: production within rank 1-10 national moderate low available: has good quality road but below standard for volume/ load capacity damage: major road are damage to heavy damage Nat-rank: production within rank 1-10 national moderate low available: can be sailed through year seasonal: difficult in dry season significant national: significant volume for national market dominant local: consume only for local market dominant export: large number of production (>50%) for export market significant export: some number of production (<50%) for export market
Pang. Bun
nat. rank
Unskilled (506.360)
available
available
Kumai/2000
Independent
Independent
low
- high potentiality due to large raw material and high nat. demmand high
Competitiveness
Growth & Trends
- Required addition of attraction in order to attrack tourism
Remarks
high
high moderate low
increase
- increase - flat - decrease - dominant export: large number of production (>50%) for export market - significant export: some number of production (<50%) for export market
(dominant)
National
- significant national: significant volume for national market significant national: significant volume for national market - dominant local: consume only for local market dominant local: consume only for local market -
Present Production
Water Supply
independent
moderate
Nat-rank: production within rank 1-10 national - moderate - low
available PAM independent supply
independent
available PLN independent supply
Kumai/2000
- Pontianak/DWT Pontianak/DWT - Ketapang/DWT Ketapang/DWT - ./DWT ./DWT
available
- available: can be sailed through year available: can be sailed through year - seasonal: difficult in dry season seasonal: difficult in dry season
Land Trans.
Labour Condition
damage
- available: has good quality road but below standard for volume/ load capacity - damage: major road are damage to heavy damage
moderate
skilled (UMR): means availability of skilled labor moderate (UMR): means availability of labor but need training - unskilled (UMR): labor of indigenous traditional
Raw Material Condition
Province
CK
(C) Tertiary Sector 1. Utility industry: Water supply (bottling aqua) Electricity supply (independent power) Gas supply
3. Tourism industry: Nature and cultural tourism (river cruise) Recreational tourism Historical tourism Accomodations/ Hotel
2. Trade and services: Distributor Terminal operator Container terminal Shipping agent Forwarder and expedition service
Industrial Commodities
Kobar/Tj. Puting
Location
Nat. Rank
Nat-rank: production within rank 1-10 national - moderate - low
6. Property: Industrial estate Bonded industrial zone Housing estate/ commercial 4. Transportation: River transportation Land transportation Docking 5. Finance: Banking, insurance Ventura
A.
P i n e a p p l e ; Plantation and Canning General Product Features The pineapple, Ananas comosus Merr., is a member of the Bromeliaceae family, a large, diverse family of 2000 species. The bromeliad family contains hundreds of taxa (member species) used as ornamentals in greenhouses or sub-tropical areas: Billbergia, Vresia, Nidularium, Pitcairnia, Tillandsia. Tillandsia usneoides is "spanish moss" native to the Gulf States. Formerly, the pineapple was named A. sativus, Bromelia ananas, or B. comosus. Based on their habitat and morfology especially its leaves and fruit form, pineapple can be categorized into four types: Cayene (smooth leave, less thorn, big fruit), Queen (short leave with sharp thorn, oval fruit), Spanish (long and slim leave, smooth to rough thorn, spherical fruit with flat nodes/eyes), and Abacaxi (long leave with rough thorn, cylindrical or pyramidal fruits). At present, world pineapple plantation centered in several countries such as Brazil, Hawaii, Ivory coast, Mexico, Costarica, Puerto Rico, and Asia countries such as: Thailand, Phillipine, Malaysia and Indonesia. In Indonesia, Province of South Sumatera, West Java, North Sumatera, East Java and Riau are known as pineapple producer. National pineapple harvest area is approximately 165,690 ha or 25.24% from total target of fruit harvest area (657,000 ha) in 2002. Several regions in Kalimantan also cultivated pineapple in small scale such as Central and East Kalimantan. These plants are vegetatively propagated from crowns ("tops") and slips (side shoots arise in an older leaf axil). The size of the crown/slip may affect yield medium to large crowns give highest yield. Plants for establishing new fields are obtained from old fields after harvest, prior to clearing or burning. Pineapple Processing In addition to fresh fruit product, pineapple can be processed into more lasting (preserved) food or drinks with higher added value such as canned coctail/slice, syrup/juice, concentrate syrup, jelly/jam, etc. In international market, canned and syrup are the most popular with significant trading value. The complete chart of pineapple processing can be seen in the following figure:
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Pineapple
Peeling & Coring Peeled fruit, without core Procesing
Canned Coctail Juice / Fruit Concentrate Syrup Paste/Jam Market
Waste material
Sweets,leather, etc
Rendemen/ Syrup residue Core Peel
Procesing
Concentrate Syrup Meat softer material
Extraction
Waste / residu
Animal feed
Liquid Fruit extract ready to use Processing Pineapple Syrup Market
Netralizing
Liquid waste
Figure 3.3. Pineapple industry flowchart (Suprapti, 2001 in Kapet Sasamba 2004) Performance of Domestic Pineapple Processing Companies Indonesian pineapple processing industry in has been started since 1980. Recently there are around 6 pineappple processing industries have been operating for export market with total production capacity 282,000 ton of canned pineapple and 113,000 ton packed juice. Table 3-18. National producer of pineapple processing
Company PT. Great Giant Pineapple PT. Tri Delta Agrindo PT. Pulau Sambu PT. Para Sawita PT. Kencana Acid Indo Perkasa PT. Sari Segar Alami Location Lampung Lampung Tembilahan, Riau North Sumatera Lampung P. Bintan, Riau Investment Status PMA PMA PMDN PMDN PMDN PMDN Capacity (ton/year) Product Volume - canned pineapple - juice - canned pineapple - juice - canned pineapple - juice - pineapple juice - canned pineapple - juice - pineapple juice - canned pineapple - pineapple juice 200,000 100,000 35,000 4,000 25,000 3,000 2,000 22,000 2,000 2,000 282,000 113,000 Production (2003) 160,000 71,000 28,000 2,880 20,000 2,400 1,400 18,480 1,500 1,500 226,486 79,100
Total Capacity
Source: INDOCOMMERCIAL and PCII data
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All of the industries have been developing their own plantation area to secure the production quality. Lampung has the largest with 3 industries as other industries located in Java, North Sumatera, Riau and Jambi. Canned pineapple in Jambi consumes basic materials from pineapple plantation cultivates in organic soils. Market Opportunities World Market Fresh fruit business is a business valued about US$ 25 billions a year in international market, which exceeds the value of traditional crops such as soybeans (US$ 11.8 billions) and beef (US$ 12.6 billions) (FAO, 2003). In spite of being a large market there is still a lot of of room to grow. It is estimated that less than 10% of fruits produced in the worlds are sold on foreign markets, being mostly consumed within the country. International Society for Horticulture Science (ISHS) also reported that total world import of pineapple products were close to US$ 1.7 billions, distributed as follows: fresh US$ 720.3 milions, canned US$613 millions, Simple Juice US$ 245.54 millions, and concentrated juice US$ 83.5 millions. These figure shows that pineapple is still considered as an interesting fruit on international market, even in some importing countries, where just a small part of the population knows about the fruits. Based on research conducted by KAPET SASAMBA (2004), there are four types of popular pineapple product in current global market such as: Fresh, Canned, Single Strength Juice, and Concentrate. Most dominant export demand is for canned pineapple than followed by fresh pineapple, single strength juice, and concentrate juice. The condition of two major products (fresh and canned) is as follows: Global Fresh Pineapple Trading For fresh pineapple, six major producer countries produce 60% or 10.5 million ton in 2003, Thailand was the main producer of pineapple in the world followed by Phillipines, Brazil, China, India, and Costarica. Because of the perishability, pineapple in its fresh form is traded only on a limited scale and mostly in the neighbouring regions. For example, in spite of ranking third in production, Brazil only ranked 14th in exports of pineapple, and contributing only 1.17 % of the total exported volume worldwide.
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Table 3-19. Major world producer of fresh pineapple Country

Thailand Phillipines Brazil China India Costarica Nigeria Mexico Kenya Indonesia Colombia Vietnam Venezuela United States Ivory Coast South Africa All other Total
Source: FAO, ISHS and PCII data
Volume (000 tones) 2002 2003

1,700 1,652 1,404 1,316 1,110 1,060 888 721 600 555 353 348 296 296 250 161 2,074 14,780 1,955 1,900 1,615 1,513 1,277 1,219 1,021 829 660 623 388 383 326 326 275 177 2,277 16,751
Percentage (%)
12 11 10 9 8 7 6 5 4 4 2 2 2 2 2 1 14
Consumption of pineapple can be pictured the by the average of fruit consumption, which is in North America Spain, France, Netherland, Belgium, New Zealand, China, Iran, Egypt, Tunisia of 600800 gram/capita/day. The average of Portugal, Italia, Albania, Turkey , Libya and North Korea is 8001000 gram/capita/day. While for Mexico, Cuba, Honduras, Venezuela, Ecuador, Bolivia, Brazil, Argentina, U.K, Norwegia, Sweden, Finland, Denmark, Lithuania Germany, Croatia, Japan, Australia, Cameron is 400 600 gram/capita/day. At present, United States is by far the largest single-country importer of pineapple with france, Japan, and Belgium also being importers. FAO reported that during the year of 1984 - 2002, import of fresh pineapple steadily increase at number of 6.99% per year. It is often that importer counties use fresh pineapple as raw material for pineapple processing industry in their countries and then they re-export the result. The latest case is in India, and this also probabaly happen in the other importer countries.
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Table 3-20. Major importer of fresh pineapple

Country USA France Japan Belgium Italy Germany 2000 318,837 148,239 100,092 81,686 67,677 57,354 Volume (Tons) 2001 2002 321,298 405,715 162,684 156,426 118,344 122,871 100,798 108,539 71,238 80,014 59,885 75,909 2003*) 457,665 160,688 136,136 125,114 87,002 87,329 65,529 70,837 46,631 38,695 198,530 1,474,156
Canada Spain U.K Korean Rep. All Others Total
41,000 31,170 29,309 21,790 147,938 1,045,092
49,291 48,867 32,028 25,536 164,234 1,154,203
56,047 53,879 39,944 31,954 179,988 1,311,286
*) Preliminary; Source: FAOand PCII data
Global Canned Pineapple Trading The largest exporter of canned pineapple is Thailand, followed by Philippines, Indonesia and China. In 2003 world export of canned pineapple was 1,028,935 ton, out of which 39.7% was exported from Thailand, followed by Philippines at 24.1 % (Table 4). The share of Indonesia to the world exports of canned pineapple increased from 12.26% in 2000 to 12.88% in 2003. Table 3-21.
Country
Major exporter of canned pineapple

Volume (tons) 2001 2002 2003*)
2000
Thiland Phillipines Indonesia Kenya Netherlands Singapore China South Africa Germany Malaysia All others Total
446,392 251,423 131,690 56,212 31,170 23,707 22,400 34,378 17,313 14,808 44,611 1,074,104
418,722 254,186 135,807 55,700 33,783 28,270 26,567 24,788 18,626 15,999 41,634 1,054,082
384,958 186,457 149,830 71,316 20,391 21,128 41,121 32,778 23,908 20,072 53,355 1,005,314
357,488 188,506 159,817 80,328 22,100 23,161 55,715 32,006 28,095 23,369 58,350 1,028,935
Since 1993, Indonesian canned pineapple export shows an increase even with a small number of growth rate. Export volume has suffered significant drop in year 19971998 resulting from regional economic crisis. Normal condition recovered in 1999 and Indonesia caold has the position of third biggest canned pineapple exporter. During the period of 1997-1998, Thailand also had a hard period, but in 1999 they could also get a remarkable growth of export and very soon got back to the top of exporter list.
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The production of processed pineapple from Indonesia mostly oriented for export market, the export market demand comes mostly from United States, Asia and Europe. Dominant importer countries for Indonesian canned pineapple are United States, Singapore, Netherlands, Germany and Japan. Every country demanding a different taste of canned pineapple, from a sweet juice to a natural bitter flavor. Table 3-22. Export Volume and Value of Indonesia Canned Pineapple
Year Volume (Ton) Growth Value (US$)
1998 1999 2000 2001 2002 2003
102,652 136,115 131,690 135,807 149,830 159,817
-24.58 75,435 32.60 85,302 -3.25 60,284 3.13 62,742 10.33 79,352 6.6 84,641
In line with the export volume of canned pineapple, the world import volume of pineapple also facing a fluctuation, eventhough the total trend from 2000 to 2003 is increase. Based on FAO statistical data, during the period of 19602002, world canned pineapple import volume increases at a number of 3.5% per year, the highest growth rate was occurred during the period of 19841994 in which the average of import volume grew at a number of 6.97% per year. Table 3-23.
Country
Major importer of canned pineapple

Volume (tons) 2001 2002 2003*)
2000
United States Germany Rusia U.K Japan Spain France Canada Netherland Italy Belgium Poland Finland Sweden Australia Portugal Argentina All others Total
*) Preliminary;
316,852 132,047 11,274 54,112 57,211 33,317 31,685 29,486 61,793 35,056 23,226 12,075 10,573 9,434 11,607 10,039 15,660 131,436 986,883
293,658 128,399 20,857 51,371 59,616 35,331 34648 30,458 45,330 18,784 23,622 16,207 12,503 10,228 10,558 9,934 14,663 137,034 953,171
309,787 128,670 31,063 50,114 51,004 37,711 31,831 29,397 34,956 25,664 23,558 13,847 10,671 10,018 10,480 9,057 3,352 161,044 972,224
306,314 127,014 51,562 48,227 48,158 40,121 31,904 29,353 26,291 21,959 23,726 14,828 10,720 10,323 9,958 8,603 1,551 178,262 988,874
Source: FAOand PCII data
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Beside the existing major export destination countries as regular market for export, there are also many new emerging markets, even though the import value is still low, such as Australia, Korea, and Argentina and many other Europian Countries. The canned pineapple import data shown that canned pineapple has become acceptable product in european countries, and has opportunity for improvement. National Market In year 2002 Indonesia produce about 0.55 million tons of pineapple, this is the sixth biggest fruit product or about 4.7% of total fruits product Indonesia fresh pineapple production can be seen in following table: Table 3-24. Production of Indonesia Fresh Pineapple
Year 2000 2001 2002 2003 Area Harvested (ha) 6,994 7,960 9,034 10,253 Volume (Ton) 393,299 494,968 555,588 623,647 Export (Ton) 2,977 2,020 3,734
4,238
Import (Ton) 16 4 1 1
Source:Statistic of Agriculture(2003)
Generallly, fruit consumption is closely related to income per capita, culture and life style. FAO standard for fruit and vegetable consumption is 376.39 gram/day. In Indonesia, fruit and consumption is about 213 gram/person/day (fruit about 111.1 gram/person/day). In the next years, international consumption of fresh fruit is projected to increase as the national economic condition will be getting better and health life style become more popular. Table 3-25. Domestic consumption of Indonesian canned pineapple
Year 2000 2001 2002 2003 Production (tons) 186,852 193,178 210,976 226,486 Export (tons) 131,690 135,807 149,830 159,817 Import (tons) 94 85 47 31 Consumption (Ton) 55,256 57,456 61,193 66,700
Source: FAO and PCII calculation
Land Resources for Pineapple Plantation Potential location for pineapple plantation Identified by regional government through selection of land charcteritics which are suitable to the requirements of pineapple for growing. The other considerations are slope and spatial plan of regional government. As widely known, pinepple can grow on almost all of soil types, however the most suitable is well-drained sandy loams with low contains of lime, fertile and
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loose with pH (acidity) range from 4.5-6.5. Fumigation is practiced routinely, since nematodes are serious problems in most growing areas. Pineapple is relatively drought-tolerant, and can be grown in areas receiving as little as 25 inches/yr. Alternatively, 150 inches/yr are tolerated if drainage is adequate. Pineapples are resticted to tropical lowlands, with temperatures of 18-35C (6595F) and precipitation of 45 inches distributed in spring and fall. Humidity is usually high. If climate during ripening is too cool, fruit are too acid, and if climate is too warm, fruit may be insipidly sweet. Generally, most of soil types in Central Kalimantan are suitable for pineapple plantation, particularly in matured organic soil in southern part of province especially District of Kapuas, Pulang Pisau, Barito Selatan, and Kotawaringin Timur which were prepared for agriculture development. At present, these districts (excluding Kotawaringin Timur) have large suitable area for various food crops cultivation. In these districts, currently many smallholder farmers have cultivated pineapple both for their own needs or sale in traditional market. Local smallholders produce pineapple with very small market absorption due to insufficient of infrastructure and market penetration. Up to this moment, the growth of pineapple production still slow and has not yet so significantly increased. The trend of pineapple production in recent years can be seen in Table 3.26.
Figure 3.4. Small-scale Pineapple Plantation in Pulang Pisau Other weaknesses are less effective of industrial support (canning factory, bottling and packing), make the canned pineapple industry relied its container supply from Java. This should not considered as major limitation since Java is the nearest and most dominant economic orientation of Central Kalimantan.
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Table 3-26. Pineapple production of major districts in Central Kalimantan No

1 2 3 4 5 6
Kabupaten 2001
Kapuas Pulang Pisau Barito Selatan Kotawaringin Timur Kotawaringin Barat Others Total 2,764 86 3,020 200 150 6,220
Production (ton) 2002 2003

4,500 25 85 3,950 160 100 8,820 5,542 30 88 4,183 133 56 10,032
Growth
41.60 20.00 1.16 17.69 -18.45 -38.90
Sources: Kalimantan Tengah in Figures 2001-2003
Availability of land for New Investment Based on database held by regional government, proposed suitable land for pineapple plantation in each major district is as follows: Table 3-27. Current area of pineapple plantation in several major districts No
1 2 3 4 5 6
Kabupaten
Kapuas Pulang Pisau Barito Selatan Kotawaringin Timur Kotawaringin Barat Others Total
Current Plantation (ha)

824 150 31 597 19 35 1,656
Possibility of expansion (ha)

38,000 15,000 16,910 3,000 2,000 0 74,910
Source: Central Kalimantan in Figure (2003) and Dinas Pertanian of Central Kalimantan
These above mentioned available land for plantation is result of regional government identification based on several initial survey, which had been taken spatial plan and soil types into account. Those available area mostly located in KPPL area (Kawasan Pengembangan Pemukiman dan Penggunaan Lain/Area for settlement and other utilization) of each district. Infrastructure and Supporting Business A better condition of road infrastructure linked the above priority districts to provincial capital city, only Barito Selatan which still has poor access to Palangkaraya. However Barito Selatan has good road access to South Kalimantan (Banjarmasin). The road service in Kapuas is about 0.07 km/km2, Pulang Pisau 0.06 km/km2, Barito Selatan is 0.07 and Kotawringin Timur 0.08 /km2. Currently the main power for each district is supplied by PLN, the capacity of supply in Pulang Pisau is 85 KVA while Kotawaringin Timur 14,130 KVA. Major customer of PLN is household, because several big plantations provide theirown power plant using diesel or other power plant.
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Each district has owned local drinking water company, however the capacity still limited and serves mainly household. Almost all Kabupaten of South Kalimantan Province have chemical fertilizer and insecticide kiosk at Kecamatan level, but government manages fertilizer, insecticide for estate plantation with price higher than price for smallholders. However, these materials are available at Kabupaten market. Curently, people in Central Kalimantan have their own traditional pineaplle nursery in small scale. For good quality seed of pineapple still has to be imported mainly from from Java. Labor force The labor force for for pineapple plantation may comes from local people or transmigrant. They are distributed evenly in each agricultural center mainly Kapuas and Pulang Pisau. Current minimum wage for food crops primary industry is Rp 506,360.Table 3-28. Transmigrant in Kapuas, Pulang Pisau, and Kotawaringin Timur No Kabupaten 1 Kapuas 2 Pulang Pisau 3 Kotawaringin Timur
Source: Dinas Transmigrasi of Central Kalimantan (2003)
Transmigrant (household) 4929 13,494 6,807
Market Price International market price of canned pineapple is relatively stable at around US$ 8-10 per carton. Each carton contains 24 cans weighted 560 gram each can. Government Policy The pineapple canning industry is not included in investment negative list, large opportunity are orderly open for investment as central government through sectoral department intensively promoting national processing product of agribusiness for export market. Import duty are implemented to similar product which covered 5% tax excluding VAT 10%. Regional government through Dinas Pertanian Tanaman Pangan are very welcome to the investment in agriculture, especially for Kapuas and Pulang Pisau. In those two districts, pineapple plantation is expected to utilize in order to rehabilitate the peat agricultural area. For domestic market, producer should follows the regulation of Ministry of Health No. 329/Menkes/PER/XII/1976 about the usage of additive material
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(colouring, taste enhancer, antioxide, presever, coagulant, etc.) in canned fruits and foods. For the export market, europian countries have applied ISO 9000 qualtiy certificate that regulate the minimum requirement for imorted canned/packaged foods such as: 1. Ingredients, it is regulate the usage of additional material in canned fruit 2. Packaging & labelling, many countries have issued new regulation that regulate: - Pacaging and labelling should be made from environemtal friendly material and recycleable - Minimize the size and volume of package to prevent waste and maximize refilled system of packaging - Package should inform: the name of product, name and address of producer, nett weight, register number of product, major component of product. Tariff, all imported products are objected by import tax based on CIF, the average of import tax is range from 8%-17%. The import of pineaple juice and similar products to Uni europe is regulated by Council Directive 2001/112/EC of 20 December 2001 relating to fruit juice and certain similar products intended for human consumption Uni europe countries also issued Directive 94/62/EC about packaging and packaging material which regulate the maximum concentration of heavy metal content in the package (lead, cadmium, mercury and chromium) as well as technical requirement and composition of package.
B.
O i l P a l m ; Plantation and Crude Palm Oil (CPO) Processing General Product Features Oil plam (Elaeis guineensis Jacq.) is plantation crops form family of Palmae. It is originated from Brazil, and spread over to Africa, Equatorial, America, Southeast Asia and South Pacifik. In Indonesia, first oil palm tree was planted in 1884, originated from Mauritius-Africa and commercially planted in 1911 at Tanahitam, Hulu Sumatera Utara by Schadt a Germany citizen. Palm fruits grow in bunches, termed Fresh Fruit Bunches (FFB), which yield two types of oil: crude palm oil (CPO) and palm kernel oil (PKO). CPO is obtained from the flesh surrounding the seed after a process of cooking, mashing and pressing fruit, whereas PKO- is derived by extracting oil from the kernels. One hectare of oil palm yields approximately 20 ton FFBs, which yields 6 tons of oil. Oil palm trees have a long life expectancy cycle. Seedlings are grown in nurseries for approximately 12 months. The young palm trees are then
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transplanted into the fields with a density of around 128-143 trees per hectare. The trees start to yield fruit after the 14 years, and peak output occurs between years 8 to 14. Output then starts to decline. The trees can theoretically continue to yield fruit even beyond 25 years of age, however they then become too tall to be effectively harvested. A single mature tree at its peak can generate up to 8-10 bunches a year, weighing around 20-30 kg/bunch. CPO Processing CPO is a versatile vegetable oil that can be used as a basic raw material for edible oil and in a variety of industrial applications. Trough refination, bleaching, deodorization proccess, it becomes a liquid product namely olein (RBD olein) and also produce solid material namely stearine (RBD stearine), a by-product of the fractionation process. RBD olein is used mainly in the manufacture of cooking oil and margarine in industrial frying or processed foods like potato chips, french fries, instant noodles and other snack foods. RBD stearine is primarily used to produce soaps and detergents and in the manufacture of margarine and shortenings for food. (Motilaloswal, 2004). Palm kernel nuts yield PKO and palm kernel meal (PKM). CPO and PKO can be used to generate basic oleochemicals that are primarily used in the production of cosmetics, grease or lubricants, and plasticisers. Performance of Existing Oil Palm Plantation Companies Central Kalimantan has a rapid growth of oil palm plantation. Over one decade, it was developed into the fifth largest oil palm plantation area in Indonesia. The position of Central Kalimantan in national configuration is appeared in the table 3.29. Tabel 3-29. Central Kalimantan oil palm plantation rank in national level
No 1 2 3 4 5 6 Province Riau Sumatera Utara Kalimantan Barat Sumatera Selatan Kalimantan Tengah Jambi Area (Ha) 803,951 654,511 411,261 400,160 343,323 320,047
Source: Indonesia Agriculture Statistic (2003)
Total number of oil palm plantation company in year 2003 is 37 companies and increase into 64 by the end of 2004. Based on statistical data of Dinas Perkebunan of Central Kalimantan, those oil palm plantations mostly located in District of Kotawaringin Barat (15 units), followed by District of Seruyan (10 units), Kotawaringin Timur (15 units), inter district (8 units) and the remain 12 units distributed in the other districts.
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Central Kalimantan records an average of growth of palm oil plantation during the period of 2000-2004 at a number of 13.5% per year. Government projected that in the next few years, the growth will continue as recently local government has allocated a large area for new plantation. Consultant estimated that area of oil palm plantation in year 2007 could reach at least 410,000 ha or increase about 15% from current area. Table 3-30. Growth of palm oil plantation area of Central Kalimantan Year
2004 (aug) 2003 2002 2001 2000
Area of Plantation (ha)

357,720.30 343,323.00 295,946.00 252,625.00 216,120.00
Growth
4.2 16.0 17.1 16.9
Production of TBS* (ton)

1,511,749.21 1,605,752.32 118,5173.00 813,459.73 535,083.00
Source: Dinas Perkebunan of Central Kalimantan Province (2004) *) TBS = Fresh Bunch Fruit
To produce crude palm oil, in 2004, Central Kalimantan has 19 units of CPO factories, which were distributed in many districts especially in Kotawaringin Barat (7 units), Kotawaringin Timur (4 units) and Seruyan (4 units). Those factories run in full production capacity and produced about 380,851 tons CPO in 2003, or increased 60% from that in 2002. List of CPO factories and their capacity is as follows: Table 3-31. List of CPO factory in Central Kalimantan (2003)
Group Name
PT. Indo Truba Tengah PT. Gunung Sejahtera Ibu Pertiwi, PT. Gunung Sejahtera Puti Pesona PT. Wana Sawit Subur Lestari PT. Sungai Rangit PT. Kalimantan Sawit Kusuma PT. Gamareksa Mekarsari PT. Meta Epsi Agro PT. Lestari Unggul Jaya PT. Musirawas Citraharpindo PT. Agro Indomas PT. Krida Tama Lancar PT. Karya Makmur Bahagia PT. Bumihutani Lestari PT. Antang Ganda Utama PT. Katingan Indah Pratama PT. Bina Sawit PT. Bangun Jaya Alam Permai PT. Bumi Langgeng Perdanatra Total
Location
Seruyan Kotawaringin Barat Kotawaringin Barat Kotawaringin Barat Sukamara Sukamara Lamandau Kotawaringin Barat Seruyan Seruyan Seruyan Kotawaringin Timur Kotawaringin Timur Kotawaringin Timur Barito Utara Kotawaringin Timur Seruyan Kotawaringin Barat Kotawaringin Barat
Capacity (Ton/hour) 30 60 60 90 90 30 30 60 80 30 90 30 30 5 30 45 30 45 45 1000
Operational
1996 1997 2002 2001 2002 2002 2002 2001 2001 2001 2002 2002 2002 2002 1997 2003 2004 2004 2004
Source : Plantation Statistic of Central kalimantan 2004
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Global Market Condition The demand of CPO as a dominant material for world edible oil production is influenced by population growth and per capita income. Positive population growth and a rise in per capita income would support a positive outlook for edible oil demand. Production of the palm oil commodity in 2003 took over 28.12% of the global vegetable oil, and has been growing at the rate of 8% per year from 1999-2003. Its consumption has been growing slightly faster at 10%. Acreage under the plantation has been growing at the fastest rate of 6.47% per year, substantially higher than its arch rival/competitor soybean (3.36%). As CPO and soya oil are product substitutes with price being a major factor determining consumption preference, developments in the soya oil market should not be disregarded. Currently, soya oil accounts for 31.27%, and as the production of soya oil appears to be relatively flat in the near future. Any increase in the global demand for edible oil is expected to be met by palm oil. Global CPO Production In 2004, global production indicates that Indonesia and Malaysia are the major palm oil producer countries as it is presented in Table 3.9. Malaysia share is be 48.7% and Indonesia be 35.6% of the palm oil production in the world. Oil World, one of the leading forecasters, forecasted that Indonesian palm oil production will reach 17.7 million ton in 2010, while Malaysia will reach 16.9 million ton. Table 3-32. The Projection of World Palm Oil Production, 2000 2010
Year Production (000 Ton) 10,554 10,842 11,804 11,909 13,354 13,908 14,481 14,952 15,423 15,893 16,434 16,933 Malaysia Growth (%) 2.73 8.87 0.89 12.13 4.15 4.12 3.25 3.15 3.05 3.40 3.04 % to World 51.17 49.56 49.29 47.19 48.77 48.18 47.76 46.90 46.02 45.17 44.82 44.24 Production (000Ton) 6,250 7,050 8,030 9,200 9,750 10,393 11,167 12,222 13,389 14,711 16,057 17,772 Indonesia Growth (%) 12.80% 13.90% 14.57% 5.98% 6.59% 7.45% 9.45% 9.55% 9.87% 9.15% 10.68% % to World 30.30 32.23 33.53 36.46 35.61 36.00 36.83 38.33 39.95 41.81 43.80 46.43 World Production Growth (000 Ton) (%) 20,625 21,877 6.07 23,947 9.46 25,236 5.38 27,383 8.51 28,864 5.41 30,322 5.05 31,884 5.15 33,516 5.12 35,182 4.97 36,663 4.21 38,273 4.39
1999 2000 2001 2002 2003 2004 2005P 2006P 2007P 2008P 2009P 2010P
Source: GAPKI (Palm Oil Association of Indonesia) P: Projection
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Global CPO Trading Based on data from Oil World (2003), total world CPO export in 2003 is about 21,16 million tons. From that number, Indonesia held 32.3% share (about 6,38 million tons) and Malaysia as the biggest held about 58% (about 12,25 million tons). The other exporters are Papua New Guinea about 325 thousand tons, Singapore and Hongkong as re-exporting country about 256 thousand tons and 206 thousand tons respectively. Table 3-33. Indonesia Export of CPO Based on Destination Country
No
1 2 3 4 5 6
Destination
India Netherland China Malaysia Singapore Others Total
2000 1,639,068 593,599 438,084 56,911 273,322 1,109,043 4,110,027
Volume (Ton) 2001 2002 1,519,819 1,765,623 699,896 1,097,726 335,913 482,809 78,325 404,968 327,016 371,531 1,942,006 2,209,049 4,902,975 6,331,708
2003 1,779,089 1,106,098 486,491 408,057 374,365 2,225,897 6,379,997
Source: Statistic of Indonesia (2003)
Major destination of Indonesian export is India (27.9%), followed by Netherland and China with share about 17.3% and 7.6% respectively. The major consumer of palm oil are extended to South Africa and Eastern Europe from the traditional consumer countries of China, India, Netherland, etc. Global Consumption and Import In 2003, share of palm oil consumption to the world vegetable oil consumption is about 28.12% of CPO and 3.32% of palm kernel. On the other hand the soybean is about 31.27%, and then rape oil about 13.84%. The disadvantage of soybean and rape oils are extracted from seasonal crops. Each year it would be planted as a new cropping, while the oil palm is perennial crops that has cycle of 25 years to be replanting. Table 3-34. World Vegetable Oil Consumption No
1 2 3 4 5 6 7 8 9
Type of vegetable
Soybeans Palm Rape Seed Sun Flowers Seed Peanuts Cotton Seed Coconut Palm Kernel Olive Total
2000
MT 26.0 23.3 13.1 8.6 4.2 3.6 3.3 2.7 2.5 87.2 % 29.76 26.74 15.09 9.89 4.79 4.06 3.75 3.12 2.81
2003
MT 34.8 31.3 15.4 9.9 5.4 4.0 3.9 3.7 2.9 111.3 % 31.27 28.12 13.84 8.89 4.85 3.59 3.50 3.32 2.61
Source: Oil world, 2000
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The growth of CPO import shows a positive signal as in the last two years India and China increase their import with a significant number. In 2003, India is the single largest importer of CPO with the total number of import about 4,1 Million Tons, followed by China with import number at 3,3 Million MT and Europian Union Countries about 3,5 Million Tons.
Cotton seed Coconut Palm Kernel 3.32% 3.50% 3.59% Peanut 4.85% SunFlower seed 8.89% Rape seed 13.84%
Source: World Oil cited by IBS

Olive 2.61% Soybeans 31.27%
Palm 28.12%
Figure 3.5. World Vegetable Oil Consumption, 2003 National Market Condition In 1997, as an anticipation of the free trade era, government lowered the export tax on CPO. Following the economic crisis 1997, CPO producer found it increasingly attractive to supply their output to the export marketing order to rake in income in US dollar currency. As a result, the domestic production and supply for cooking oil dropped drastically. In December 1997, in a bid to stabilized the dometic production and supply of CPO, the government found it self force to increase the CPO export tax further and to introduce an additional export tax on the commodity, which provides the main basic material for cooking oil. Table 3-35. Domestic Consumption of CPO (in 000 ton)
Year
2000 2001 2002 2003 2004*)
Production (000 Ton) 7,050 8,030 9,200 9,750 10,393
Export (000 Ton) 4,110 4,903 6,331 6,380 7,387
Import (000 Ton) 3.7 0.1 9.5 1.1 1.1
Consumption (000 Ton) 2,944 3,127 2,878 3,371 3,007
Source: Statistic of Indonesia (2003)
Palm Oil Price Since late of 1999 the cooking oil price is higher than CPO price, this would be indication that the downstream of CPO has more value if it is comparing to export value of CPO. In future this situation will encourage the investors to process the CPO into high value product that could give the added value.
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800
700
600
CPO
500
US$/Ton
400
300
Cooking Oil
200
100
0 CPO Cooking Oil
1997 550 191
1998 665 445
1999 447 384
2001 283 397
2002 336 472
2003 440 618
2004 407
Source : Joint Marketing Office, PTP Nusantara (Persero), Jakarta
Figure 3.6. Trend of Indonesian CPO Price at Rotterdam Market Availability of land for Plantation The local regulation of Central Kalimantan has issued regulation that land for plantation shall be located in the area of KPP (Kawasan Pengembangan Produksi/Production Development Area) or in KPPL (Kawasan Pemukiman dan Penggunaan Lainnya/Settlement and Other Purpose Area). KPP area (2,713,426 ha) is widely open to private investment, while KPPL area prioritized for smallholder plantation or partnership scheme between local community and private companies. So far no exact number of allocated land for private companies in KPPL, so that the available land could not be precisely identified. Tabel 3-36. Spatial Plan of Central Kalimantan (Perda no 8, year 2003) No
1 2
Landuse
Protected area Cultivation Area Permanent Production forest Limited Production Forest Education andresearch Forest Timber Estate Prodution Development area Settlement and Other Development People Traditional Land Transmigration Total
Area (Ha)
2,256,608 4,263,993 3,802,245 4,989 136,340 2,713,426 1,940,331 254,499 154,850 15,356,395
Source: Bappeda Kalimnatan Tengah (2003)
Based on data of 2004, local government issued location permit letter to various investors (around 114 investor) to open plantation areas in Production Development Landuse (or KPP/Kawasan Pengembangan Produksi) covered
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around 1,855,315 ha. In the same year, it was recorded that about 36% of allocated area were operated as plantation while the remaining are under authorization process or even abandoned. Based on those above mentioned condition, the area that possible for new location permit or expansion in KPP area is as following calculation: a. Area of Production Development Area (KPP) b. Location Permit issued by BPN/Regent is 114 permit: - Turned into HGU ... - Under Processing .. - Not yet operating . Sub Total . c. Land available for plantation ( a b )...... 2,713,426 Ha 392,986 282,544 597,826 1,855,315 849,475 Ha Ha Ha Ha Ha
However, location permit could be revoked by government maximum three years after the permit issued for specific reasons especially if the permit holder (company) does not perform seriousness (no real activities in developing plantation) within. Infrastructure and Supporting Industries Agriculture sector particularly plantation requires appropriate road capacity for carrying raw material and product. Basically, a minimum 15 tons material should be accommodated by the existing road facilites. Today, plantation products primarily transported using multi mode transportation through river and road. For some plantation in District Kotawaringin Timur and Katingan, river transportation still the priority considering river capacity of carrying bulky product, nevertheless now river in Central Kalimantan facing problem regarding the fluctuation of water debit in dry and wet season. During the dry season water surface down and trasnsportation is hampered. Quantity and Quality of Road Network The present average road length compare to area (square km) are indicated as low at 0.04 km/km2, this number can br compared to road network condition in South Kalimantan which estimated as much higher at 0.2 km/km2 or West Kalimantan at 0.07 km/ km2. CPO Bulk Terminal Currently, Central Kalimantan has two CPO bulky Terminals located in Bumiharjo - District of Kotawaringin Barat and in Bagendang - District of Kotawaringin Timur. These two terminals could be classified as special port, which can be built by its plantation estates with a licence from Ministry of Transportation or can also be built by Government (PT Pelindo as State Owned
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Company) based on a Memorandum of Understanding (MOU) between PT. Pelindo and Plantation Estates Entrepreneur/GPPI. The MOU is compulsory due to PT. Pelindo will take some rent out retribution or other costs to Plantation Estate Entrepreneurs. CPO Bulky Port is not a permanent one. In other word, it will not be used when the plantation estate or investors do not use it for transporting CPO. As they have downstream processing units to process CPO for cooking oil or other products that are ready to transport, the port can be modified respectively. It is the reason, to build the port in flexible way to make it easier for other purposes. CPO bulky port in Bumiharjo, Kotawaringin Barat has been operated since October 2002. So far, 6 plantation estates have made agreement of using this bulky port in short term program. The first MOU was between PT. Pelindo III and Astra Agro Lestari Group in West Kotawaringin and Sinar Mas Group/PT. Lestari Unggul Jaya in East Kotawaringin/Seruyan. It is expected that all plantation estates in West Kotawaringin and Seruyan will make use of this CPO bulky port.
2 Tanks owned by Sinar Mas Group
2 Tanks owned by Astra Agro Lestari
Figure 3.7. CPO bulky terminal in Bumiharjo-Kotawaringin Barat While PT. Pelindo CPO Bulky port in Bagendang Village - Kotawaringin Timur still in finishing step and have not operated yet and now still on going discussion for operating this port between PT. Pelindo III and plantation estates entrepreneurs in East Kotawaringin. Besides CPO production in East Kotawaringin still limited (just 2 processing units in operation in Mentaya Hulu) and location of port more than 100 km from plantation
Figure 3.8. CPO bulky terminal in Bagendang-Kotawaringin Timur

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Power Supply Present power supply of electricity in Kalimantan is marginal to cover future demanding industries. The national power supply in outside of Java are use mainly for urban and cities. Industries like CPO mills and crumb rubber factories developed their own power supply. Presently some of CPO plantaion have their own powerplant by using palm oil waste for coal substitution. Supporting Industries Plantation development requires supporting industries in providing seeds, fertilizer including transportation facilities and other equipments. Palm oil seed are provided by research station in North Sumatera and takes time for delivery. Presently thereare no seed industry in Kalimantan. Heavy equipment renting company are available in Sampit and Pangkalan Bun, particularly for forestry exploitation and plantation preparation. Service of cargo transport is available but number of vehicle is limited. Seedling centers that have reputable sources of oil palm planting material in Indonesia are as follows: 1) Oil palm planting material of Dolok Sinumbuh; 2) Oil palm planting material of Lame; 3) Oil palm planting material of Yangambi; 4) Oil palm planting material of Bah Jambi; 5) Oil palm planting material of Marihat; 6) Oil palm planting material of Avros Almost all Kabupaten of South Kalimantan Province have chemical fertilizer and insecticide kiosk at Kecamatan level, but government manages fertilizer, insecticide for estate plantation with price higher than price for smallholders. However, these materials are available at Kabupaten market. Labor force At present, around 400 thousand of labour are engaged with plantation development, this number estimated around 50% from total labor force. Frequently, labor from java is required either recruited from transmigration settlement or directly send from Java Island. Minimum regional wage of Cental Kalimantan is determined as Rp 506,360 which is considered as high compare to Central Java Rp 365,000. Transmigration is one of quality labour source particularly in agriculture. Around 260,000 trnasmigration from Java are settled in Central Kalimantan which part of them were recruited through national program started in 1980 and the other are voluntary tranmigrant. Distribution of transmigration location are explained in the following table:
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Table 3-37. Transmigrant Settlement in Central Kalimantan

Kabupaten Location Number of transmigrant (household)
Kotawaringin Barat Lamandau Sukamara Kotawaringin Timur Seruyan Katingan Barito Selatan Barito Utara Murung Raya Barito Timur Gunung Mas Kapuas Pulang Pisau Palangkaraya Total
Arut Selatan, Kumai, Kotawaringin Lama Bulik Jelai Mentaya Hulu, Mentaya Hilir Utara, Parenggean, Pulau Hanaut, Antang Kalang Seruyan Tengah, Seruyan Hilir Sanaman Mantikei Dusun Tengah Teweh Tengah, Teweh Timur Permata Intan Pematang Karau Kurun, Manuhing Basarang, Selat, Kapuas Tengah Pandih Batu,Kahayan Kuala, Kahayan Hilir Pahandut
11,908 6537 144 6,807 2,038 229 798 4,542 182 1,912 1,749 4929 13,494 737 64,126
Source: Dinas Transmigrasi Cental Kalimantan (2001)
Governments Sectoral/Industrial Policy Based on the Regulation of the Minister of Forestry and Estate Crops Number 107/ Kpts-II/1999 about License for the Plantation / estate crops companies, there are five patterns of estate crops' development in Central Kalimantan such as: 1. 2. 3. 4. 5. Cooperative pattern is a pattern of plantation entrepreneurship for the share holders 100% belong to cooperative bodies of plantation. Partnership between the cooperative body and investor with share of cooperative bigger than investor. Partnership between the cooperative body and investor is a pattern of share holders for 80% belong to investor and minimum 20% for the cooperative body that can be gradually increased. Built, Operate and Transfer (BOT) pattern is a pattern to develop and operate the plantation done by investor / company, then within a certain span of time is totally handed over to cooperative body. Built to Transfer (BTN) is a pattern of investment for the investor to build the plantation and or the factory, then in a time it is handed over to others in the cooperative groups.
For new Procedure for the Plantation Business, based on the same decree, document that should be prepared are as follow: 1. 2. Principle land use permit that issued by concerned Bupati; Technical consideration and recommendation on availability of land that issued by Province Forestry Service;
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3. 4. 5. 6. 7. 8. 9. C.
Recommendation letter that issued by Governor; Plantation business plan; Tax Number of Principal (NPWP); Firm establishment documents; Map of proposed plantation site, size 1:100,000 Land Ownership Statement that firm or its group that has land not exceeded the maximum land allowable, issued by firm or its group; Statement of partnership scheme that has been choosing by investor.
Palm Cooking Oil General Product Features Cooking oil is one of basic needs of Indonesian people, with current consumption more than 2.5 million per year or about 12 kg/live/year. Cooking oil is used for calor transporter in cooking process, both in small number (shallow or pan frying) or big number (deep frying). There are variuos types of cooking oil based on its raw material and form in room temperature. Based on raw material, cooking oil has two variant that area vegetable cooking oil and animal cooking oil. Vegetable cooking oil is made from plant such as plam oil, soybean, coconut, corn, etc, while animal cokoing oil is made from animal such as chicken, pork, cow, and fish. The most dominant cooking oil in Indonesia is palm cooking oil (more than 70%) which also known as palm olein, followed by coconut cooking oil. Several advantage of using oil plam cooking oil are relatively cheap price, easy to be found in market, nutrient content, and cholesterol content. Cooking oil produced through two major steps that are refination process and fractination process. Refination process consists of refinery process (to reduce the water content, fat acid, and clean up the impurity material), bleaching (colouring), and deodorizing. The result of refination process is called RDBPO (stands for refined, bleached, and deodorized palm oil). The next step is fractionation process to separate liquid fraction (olein) and solid fraction (stearin) after crystallization at the controlled temperature. The olein fraction (RBD olein) will be further processed to produce cooking oil, while stearin is a very useful source of fully natural hard fat component for products such as shortenings, margarines, vanaspati etc beside as an excellent raw material for soap making and a cost effective replacement for tallow in soap manufacturing, animal feeds and oleo chemicals. Among all quality parameters, palm cooking oil quality more determined by its vaporized level which means the temperature at which cooking oil begin vaporize/produce smoke. The high of vaporized level value, means the highest quality of cooking oil.
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Raw Material / CPO Production As CPO downstream product, cooking oil is absorbed around 70% of CPO raw material as the other 30% is further processed for soap (11%), margarine (10%) and oleo chemical (9%). Production of raw material for the palm cooking oil industry has shown an upward trend since 1997. By 2004, production of raw material has reached 10,393 thousand metric ton which increased 10% from the previous year (2003) and many parties optimistic that this scenario is projected to grow positively. Considering attractive global consumer prices, large amount of oil palm plantations has been developing and expansive development being occurred in Kalimantan, particularly in West Kalimantan, Central Kalimantan and East Kalimantan. This development has been increased the production of CPO from Kalimantan provinces for export market and national consumption. In national scale, the extension of palm oil plantation in East and West Kalimantan is included the largest compare to Sumatera provinces. Cooking oil as simple downstream industries has been developed in East Kalimantan, by the operation of 2 factories and another 2 unit factories are working in West Kalimantan which one of them owned by state plantation company. Table 3-38. Development of Plantation Area and its CPO Production in Kalimantan 2000 2003
Province West Kalimantan Central Kalimantan East Kalimantan South Kalimantan Total
Source: Provincse in figure (2003)
Area (Ha)
2000 Production (Ton) 266,035 352,036 74,140 32,873 68,938 68,696 93,973 37,239 503,086 490,844
Area (Ha)
2003 Production (Ton) 349,101 517,090 343,323 380,851 158,786 158,231 155,668 267,658 1,006,878 1,323,830
Unfortunately, most cooking oil producers are not integrated with the upstream industry and, as such, they are highly dependent on CPO producer for their operation. On the other hand, many CPO producers currently prefer to supply their output the export market. Early in 1997, in anticipation of commencement of the free trade era, government lowered the export tax on CPO. Following the economic crisis 1997, CPO producer found it increasingly attractive to supply their output to the export marketing order to rake in income in US dollar currency. As a result, the domestic production and supply for cooking oil dropped drastically. In December 1997, in a bid to stabilized the dometic production and supply of CPO, the government found it self force to increase the CPO export tax further and to introduce an additional export tax on the commodity, which provides the main basic material for cooking oil.
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However, the introduction of additional export charge did not work as expected. As a result the ccoking oil industry cut down their outputn rates due to the shortage of raw material, nad there was a scarcity of coking oil in domestic market. This was so despite the fact that the domestic demand for ccoking oil continue to increase. Such a situation sent the cooking oil price soaring to a very high level. In view of this, the government issued a policy a policy in 1998, forbidding CPO producer from exporting their output. However, due to the pressures from different parties, including some international agencies, the government revoked the ban in April1998 and replace itn with CPO export tax policy. In a subsequent development, the domestic supply of cooking oil started to stabilize on agradual basis although the price of commodity remained high. This condition started when the supply and demand of global market of CPO began to come to an equilibrium. Of late, the supply of cooking oil on the domestic market has been improving further because the exchange rate of the rupiah has been relatively stable. The stability of the value of the rupiah has abated CPO producers desire to export their output (Data Consult, 1999) Basically, the location of cooking oil industry does not have to be close to raw material source (CPO oriducer), because CPO does not have voluminous characteristic. However the coking oil industry should has storage for raw material and relatively close to the harbor. Considering that factors, the potential location for cooking oil industry in Central Kalimantan is three big citie which relatively near to the harbor such as Kotawaringin Barat, Kotawaringin Timur, and Kapuas. Moreover those districts are relatively close to the raw material. Performance of Existing Cooking Oil Companies Indonesian cooking oil is dominated by CPO-based cooking oil, an official record of the Ministry of Industry and Trade said that the country has 46 CPO-based cooking oil producers scattered in 11 provinces with annual capacity near to 7 million tons, the capacity is not included that of small producers and not properly registered at the ministry. Considering the total production of cooking oil in Indonesia at 3,7 million ton in year 2000 and increased to 5,3 million tons in 2003, it is concluded that around 75% of the factory capacity being operated. But compare to large number of CPO production from the plantation consumption there were more cooking oil required for export and national consumption. North Sumatera is recognized as the largest producer in Indonesia with about 18 factories, meanwhile Jakarta has 6 CPO-based cooking oil factories. The growth of domestic cooking oil production can be seen in the following Table:
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Table 3-39. Output of Indonesias Cooking Oil 2000 - 2003

Year CPO-based Volume(Ton) Growth CCO-based Other-oil
2000 2001 2002 2003 2004*)
3,688,960 4,482,060 5,202,166 5,347,841 5,625,430
21.5 16.1 2.8 5.2
200,328 220,360 231,200 236,100 240,200
174,484 191,932 200,550 208,200 215,100
Source: DATACONSULT (2004) *) Preliminary
The comparison of number of industry and its capacity or cooking oil processing factory with the available area of plantation in many provinces in Indonesia is explain in the following table. Table 3-40. Comparison of number of industry and its capacity in Indonesia
Province North Sumatera Jakarta East Java West Java Riau Lampung South Sumatera Central Java West Sumatera West Kalimantan Unit 18 6 8 3 3 2 2 1 1 2
46
Total
Source: DATA CONSULT (2004)
Production Capacity (ton/year) 1,986,212 864,455 1,019,928 689,000 1,496,250 237,000 531,000 90,000 33,000 55,355 7,002,200
There are large variation of production capacity per unit per year depending to the scale capacity of machinery which around 30,000 to 2,000,000 ton. From total number of cooking oil industries, 47% of factory are operated by non-palm oil plantation owner. Large company groups dominate coking oil industry such as the Salim Group, Sinar Mas Group, Hasil Karsa Group, and Musim Mas Group. Hasil Karsa has 4 cooking oil factories with total capacity at 961,675 tons/annum. The Musim Mas Group has 5 factories with total annual capcity at 1.76 million tons, the company group was founded by Anwar Karim in 1972 in Medan. The largest producer amongst all is the Sinar Mas Group and Salim Group, these two company groups jointly established PT. Sayang Heulang. However, in 1991, the Sinar Mas Group divested its sharesand established its own subsidiary PT. SMART Corporation in Surabaya-East Java. The Sinar Mas Group also took over PT. Ivo Mas Tunggal which was established by Panin Group in 1978 with the name of PT. Indonesia Vegetable Oil Company in 1985. The company has two factories located in Medan and Surabaya, now it
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has an annual capacity of 314,400 tons/year and the products are known with the brand names of Filma, Obor, and Paloma. Global Market Condition The other cooking oil producer in Asia is Malaysia. In recent years, cooking oil production of Malaysia decreased, which is mainly caused by large conversion of land utilization from plantation to industries and Malaysia has more advantage in developing higher value downstream product of CPO, oleo chemical and oleo food. This condition will open opportunities for Indonesia to develop more primary product of palm oil (CPO) and establish a simpler downstream product of cooking oil, margarine and shortening. Major destination of cooking oil export is to Asian Countries such as India, China, Hongkong, Middle East Countries, and Singapore. In addition, Indonesa also exports cooking oil to Spain, the USA, Germany, Turkey, and the Netherlands. Import of cooking oil is significantly decreased from 1,762 ton in 1996 to only 14 ton in year 2001. In recent years, palm cooking oil/palm olein has turned into the biggest threats for soybean cooking oil as it is soon became popular when entered world market including United States market. Soybean farmers in United States met their contender as price of palm cooking oil is cheaper than soybean cooking oil with almost similar quality. Positive signal arose as world consumption of palm cooking oil increased by average 4% between 2000-2003 referring to Oil World Annual Report. Moreover, that number is likely to be increase considering that the above data were not significantly covered consumer demand in Africa and East Europe. Table 3-41. Comparison of World Consumption in Various Vegetable Oil Between 1993 1999 (000,000 ton)
Vegetable Oil
Soybean Oil palm Sunflower Olive Coconut Rape Seed Peanut
Source: Oil World Annual, 2003
Consumption (*000 ton) 1997 2000 23 26.0 17.7 23.3 8.8 8.6 2.4 2.5 3.2 3.3 12 13.1 2.5 4.2
2003 34.8 31.3 9.9 2.9 3.9 15.4 5.4
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National Market Condition Domestic consumption of cooking oil increases which may resulting from increase population and also increase of consumption per capita. A slight declined occurred in 1998 due to limited national cooking oil supply , which created a higher prices in retail market.. Table 3-42. Development of Domestic Consumption of Cooking oil
Year 2000 2001 2002 2003
Average growth
Production
Export
Import
(ton)
3,688,960 4,482,060 5,202,166 5,347,841 19.34%
(ton)
2,292,363 3,054,076 3,528,916 3,494,279 26.58
(ton)
67 14 401 397 -25.75
Consumption (ton) 1,396,381 1,427,998 1,673,651 1,853,959 10.30%
Source: DATACONSULT (2004)
By taking the population into account, consultant projects the domestic consumption of cooking oil as shown below: Table 3-43. Projection of Domestic Consumption of Cooking Oil
Year 2003 2004 2005P 2006P 2007P 2008P 2009P 2010P
Source: PCII
Total Population (million) 219,89 222,62 225,34 228,03 230,70 233,35 235,98 238,58
Cooking Oil Consumption (Ton) 1,853,959 2,002,275 2,162,450 2,335,450 2,522,290 2,724,075 2,942,000 3,177,360
Consumption per Capita (Kg) 8.43 8.99 9.60 10.24 10.93 11.67 12.47 13.32
Government Policy As widely known, palm cooking oil is a strategic commodities as it is one of basic needs of Indonesian people together with paddy rice and fuel. Supply of cooking oil is heavily dependent on availability of crude palm oil as raw material. Unfortunately, when the CPO price in international market increase, (1995) many CPO producers prefer to export the CPO to gain high benefit rather than sell it to domestic cooking oil companies. This condition caused domestic consumption fall to 1.1 million tons (1999), to secure the availability of CPO supply to domestic cooking oil companies Government objected a high export tax regulation to CPO exporter. After such hard time, domestic consumption increase to 1.85 million tons in 2003.
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D.
R u b b e r; Processing and Nursery General Product Feature Rubber tree (Hevea brasiliensis) is a tropical tree. It is native to the Amazon Basin in Brazil and adjoining countries. In the early stages (about 1910) most rubber was harvested from "wild trees" growing in the Amazon Basin and to a lesser extent from other natural sources of natural rubber (such as Ficus elastica) growing in the Congo Basin of Africa. Hevea was taken from the Amazon to South East Asia by the British Colonial Office where it was grown experimentally and later on plantations. Subsequently, cultivation spread to Indochina (Vietnam and Cambodia), the Dutch East Indies (Indonesia) and Thailand, and subsequently to Africa (Liberia, Nigeria, Cote d'Ivoire). Initially cultivation took place on plantations, but smallholders rapidly adopted it as a source of income. Mature Hevea trees on rubber plantations are 20-30 metres high. Such trees flower once a year, and after insect cross-pollination produce large fruits containing several thimble-sized seeds with hard outer coats. If satisfactorily germinated and planted within 2-3 weeks, seeds grow to produce seedling plants. Depending on conditions, the latter then take 5-10 years to reach 'maturity', which is defined as the stage when tapping can be started. In practice, this is the time when the trunk has about 500 mm circumference at 1 metre above ground level. At present, rubber is used as raw material for many developing industries, mainly tire industry. It is estimeted that more than 70% of world natural rubber production consumed by tire industry. In the future, rubber demand will be increase since the industry activities arose along with the increasingly people population number and needs, while the synthetic rubber can not always replace the nature and role of natural rubber. Indonesia is the second biggest producer of natural rubber after Thailand, rubber plantation spread in two third of provinces in Indonesia. However, Minister of Agriculture (2004) said that around 80% of current rubber plantation in Indonesia is owned by smallholder with old rubber trees (around 20 years old). Those old rubber trees has caused a low productivitiy of rubber plantation, therefore, governement has been paid attention to the rejuvenation program of rubber trees in rubber plantation. Raw Material In national scale, Central Kalimantan holds the sixth largest area of rubber plantation with about 357,345 hectare of rubber plantation. Position Central Kalimantan in national configuration is appeared in the following Tables:
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Table 3-44. Rubber plantation of Central Kalimantan in national scale.

No 1 2 3 4 5 6 Province Sumatera Selatan Sumatera Utara Jambi Riau Kalimantan Barat Kalimantan Tengah Area (Ha) 679,248 440,314 438,498 405,476 365,319 357,345
Source: Indonesia Agriculture Statistic (2003)
Most of rubber plantation in Central Kalimantan owned by smallholder (more than 90%). Unfortunately the productivity of local rubber plantation is still low (about 500-600 kg/ha/year) if compared to the productivity of large private estates (1000 to 1500 Kg/Ha/year). Low productivity of small holder planataion is caused by : Rubber plants are not given proper care or fertilized. The ability of absorbing technology is very limited. Most of rubber trees come from unselected seeds. The density of trees per hectare is not in good order. The age of rubber trees are old (more than 20 year)
Rejuvenation of old rubber is needed as the province has about 9% of the rubber plantation in Central Kalimantan is covered by old rubber trees (41,467.50 hectares). Rejuvenation shall be combined with local farming culture such as planting seasonal food crops (ginger, corn, or other commodities) between the juvenil ruber trees. This traditional system can be conducted only in several years until rubber trees grow and their canopy cover the soil surfaces. The potential districts to do these activities are Barito Timur, Gunung Mas, Kapuas, Pulang Pisau dan Barito Utara Performance of Existing Rubber Companies In 2003, national natural rubber production is 1,79 million ton which was indicated grew into 2 million ton in 2004. The natural rubber came from around 3,3 million hectares of plantation in more than 20 provinces. The largest proportion of rubber production by type are Technically Specified Rubber (TSR) which holds about 95% of total product, followed by Ribbed Smoked Sheets (RSS) which holds 2%, Latex Concentrate 0.7%, and the others product 2.3%. The major grades of TSR is SIR 20 which is derived from smallholder coagula, while the major grades of RSS is RSS 1. National installed capacity of SIR industry is about 2 million tons/year with Nort Sumatera and South Sumatera as two largest producer. While national installed capacity of RSS industry is 543 thousand ton/year with North Sumatera as the biggest. Based on that number, utilization of national production capacity is about 71% of rubber processing industries.
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Table 3.45 Installed Capacity of rubber industry in Indonesia (2003)

Province Aceh North Sumatera West Sumatera Riau Jambi South Sumatera Lampung Bengkulu West Java Central Java West Kalimantan Central Kalimantan South Kalimantan East Kalimantan Total Number of Industry 1 33 6 10 7 21 4 6 13 7 3 10 121 SIR Installed Capacity 7,200 470,697 105,600 135,400 235,500 544,000 36,000 36,898 47,100 209,000 77,400 99,400 2,004,195 Number of Industry 11 62 2 7 5 115 91 5 2 6 3 309 RSS Installed Capacity 22,560 278,670 2,475 13,610 4,353 60,926 81,635 34,365 2,500 17,750 27,000 545,844
Source: Rubber Association of Indonesia (2004)
In Central Kalimantan in 90s especially in East Kotawaringin sub district there was national private company, PT. Kayu Tribuana Rama, which used old rubber woods from small holder. The company it could only operate for 2-3 years because of lack of sustain raw materials. That company had inventoried the potential of old rubber woods in Kapuas, Barito Selatan and Barito Utara. Market Condition In 2004 the natural rubber production exceed the consumption at 70,000 ton, and in 2003 the oversupply was 190,000 ton. The oversupply not happened to natural rubber but also happened to synthetic rubber (See Table 3.44). The possibility will happen in near future just with market oriented of buyers. Traditional market of Indonesian rubber is Japan, USA, and Singapore and new market could be China, which has about 300 tire producers of 4,000 rubber-processing enterprises. Currently China is a major exporter of tires, based on International trade data indicates that China exported nearly 111 million tires. In addition the Japan largest tire maker, Bridgestone, has established tire factory in China that commencement in 2004 with production level 8,000 tires a day. Thailand is the major natural rubber supplier to China. According to International Rubber Study Group, China market in 2020 is accounted at 4 million ton of projected market demand.
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Table 3-46. Position of Natural and Synthetic Rubber in The World

Description 2002 Natural Rubber (in 1000 ton) Production 7440 Consumption 7500 Balance -60 Synthetic Rubber (in 1000 ton) Production 10930 Consumption 10730 Balance 200 2003 8060 7870 190 11350 11220 130 %Change 8.3 4.9 2004 8250 8180 70 11870 11550 320 20120 19730 390 %Change 2.4 3.9
3.8 4.6
4.6 2.9
Natural + Synthetic rubber (in 1000 ton) Production 18370 19410 Consumption 18230 19090 Balance 140 320
Source: International Rubber Study Group, 2004
5.7 4.7
3.7 3.4
Table 3.46 indicates the rubber consumption trend increasing by 3.9% and production by 2.4%, while the synthetic rubber consumption increasing by 2.9% and production increasing by 4.6%. However, by increasing the price of natural gas and oil the synthetic rubber will has constraint in expanding the production. However, the natural rubber will compete with synthetic rubber, currently the synthetic rubber has oversupply at 320,000 ton. Considering the fact that production of rubber products is limited by ITRC policy, local government should encourage the private and government estate to participate in rubber replanting and to facilitate smallholders accessing to rubber replanting technology. One of the businesses that can be offered to private companies is rubber seedling nursery business. It is suggested that in motivating the investors willingness to involve in seedling nursery business, each investor be authorized to deal with certain rubber smallholding area in contract farming system. For contract farming system, smallholders and investor sign the contract in which the investor will supply the recommended seedling and has obligation to buy its product, while the smallholders should practice all recommended technology given by investor. The sale price should be based on market price at the moment of rubber delivery. In the long term, by increasing price of oil and natural gas, the natural rubber will be more competitive than synthetic rubber. Meanwhile more rubber planting area is expanding /replanting by smallholder with better seed quality, better productivity and waiting for mature stage for harvest. Rubber processing industries to produce SIR and RSS are also to be promoted in Central Kalimantan to anticipate the increasing world market demand of natural rubber. World and Chinese Rubber Market Phenomena International Rubber Study Group indicates the world consumption of natural rubber as presented in Figure 3.9.
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Figure 3.9. World Rubber Consumption Projection and Actual, 1960-2020

10,000
9,000
8,000
7,000
6,000
1000 ton
Projection
5,000
4,000
3,000
Actual
2,000
1,000
0 1960 1970 1980 1990

-- Year -=>
2000
2010
2020
In 2020 nearly 10-11 million ton of natural rubber would be required by the world, of this projection Chinese market accounting for 4 million ton. Study Group estimates the world production of natural rubber to reach a maximum of 89 million ton, inferring a shortfall of approximately 2-3 million ton. Indonesian rubber should take action in anticipating the world demand and more realistic for Indonesian natural rubber to fulfill the Chinese market. However currently the Thailand rubber supply the Chinese market at 80% Chinese requirement and this market share decreasing to about 70% at the expense of Vietnam, Malaysia, etc. Consultant opinion that in coming soon the China will diversify its suppliers to accommodate the business risk, at this moment Indonesian should penetrate the Chinese market actively. The Figure 3-10 indicates the Chinese natural rubber import countries.
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Figure 3.10. China Natural Rubber Imports by Selected Countries Origin, 1975-2002
450
400
350
Thailand Indonesia Malaysia
Singapore Sri Langka
300
1000 ton
250
200
150
100
50
0 1975 1980 1985 1990

-- Year -->>
1995
2000
In penetrating the Chinese market the International Tripartite Rubber Council (ITRC) should be strengthen their cooperation so the rubber price could be managed at reason level. Market Price In order to more control the price fluctuation of rubber commodity in the world market, early September 2001 the three Ministers of Industry and Trade of the three ASEAN countries (Indonesia, Malaysia, and Thailand) have agreed to form International Tripartite Rubber Council (ITRC) and National Tripartite Rubber Council. ITRC will work on 2 price raising scheme, which is: Limiting rubber export volume scheme, and Supply management scheme.
Within the second scheme, the three countries will decrease their national rubber production as much as 4% in 2002-2003 period. This scheme includes the replanting of rubber plantation, increase rubber plan growth and yield diversification. Within the scenario, production will reduce 155,000 ton in 2002 and 200,000 ton in 2003. Impact of this action is shown in international market price, CIF Rotterdam Market in 2001 was 69.50 US$ Cent/ Kg and in 2004 the price was 122.5 US$ Cent/Kg for Standard Indonesian Rubber (SIR). However at present new rubber
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market is China beside traditional Indonesian rubber market US, Japan, and Singapore countries. The rubber international market price trend is presented in Figure3-11. Figure 3.11. Indonesian Rubber Price at Rotterdam Market
14,000
12,000
CIF Rotterdam Price

10,000 8,465 8,000
R /K p g
11,521
6,536 6,000
6,513
4,000
Calculated Price at Farm Gate Price

2,000 1,307 1,302
2,304
1,700
Source: Rotterdam Auction Report, 2004
0 2001
2002
-- Year -->
2003
2004
Although the rubber international price is increasing year-by-year since 2002, the farm gate price is not increasing significantly. The Indonesian rubber international market price increasing seems has a close correlation to International Tripartite Rubber Council (ITRC) policy to reduce the supply by 150,000 ton per year in 2002 and 200,000 ton by year of 2003. Therefore there is indication that rubber market sensitive to the rubber supply from Indonesia, Malaysia, and Thailand as main producer countries. However, a rule of thumb in agro-economic phenomena, individual can not influence the market it should be in common action but whenever the market price establish every individual country will go to the market so the price will be going down. ITRC should strength their cooperation and invite the other rubber producing countries to establish the common market. Infrastructure and Supporting Industries Rubber can be propagated utilizing seedlings or vegetatively, through the use of buddings. The government is emphasis to use of clonal (vegetative propagated) rubber. Rubber planting material should be produced from recommended closnes, for derivation of both rootstock and scion. The existing seedling center is South Sumatra. The new investors are recommended to get the recommended clone from this center. Almost all Kabupaten of Central Kalimantan Province have chemical fertilizer and insecticide kiosk at Kecamatan level, but government manages fertilizer, insecticide for estate plantation with price higher than price for smallholders. However, these materials are available at Kabupaten market.
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E.
Rattan Processing Industry General Product Features Rattan is included in group of crawler palm tree which found mostly in tropical rain forest in Asia and Africa. This goup is from sub-family of calamoidae which has 13 genus and about 600 species, in Indonesia rattan can be found in Java, Kalimantan, Suamtera, Sulawesi, and several other islands. Administratively, rattan is included as forestry product (non timber forest product), even though many of it comes from smallholder cultivation. Kalimantan island has the highest of rattan diversity as it has about 100 species of rattan which more than 50 species is commercial species. Sumatera has about 75 species, Sulawesi has 25 species, and Java has 25 species. Almost all of rattan cultivation is managed by local/traditional people, the skill and knowledge about rattan cultivation has been transferred traditionally from old generation to the next generation. Business opportunity for various rattan products can be seen through increase of production volume and export. In current economic situation, when purchasing capacity of community decrease, export market shall be important choice. Rattan has high economic value, this is concerning its specific characteristic of elastic, flexible, strong and simmilar form, therefore it is very suitable for furniture industry and various handicraft products. Rattan product also has high local content and less dependency on imported raw material. Raw material for rattan can be obtained from cultivated rattan besides natural rattan. Rattan industry can also absorb manpower so that this industry will bring good effect to regional economic as well as to sustaibnable natural resources mangement. Raw Material As previously mentioned, rattan source can be categorized into two that are cultivated rattan and natural forest rattan. The common cultivated rattan is small (short diameter) such as rattan irit, jahab (Calamus trachycoleus), taman/sega (Calamus caesius), while the natural rattan usually big (long diameter) such as: manau (Calamus manau), batang, lambang, pulut, tohiti, semambu, etc. The existance of natural rattan strongly depend upon the quality of forest stands (trees). Indonesia is known as the biggest rattan producer in the world, it holds about 80% of world rattan product supply followed by China, Vietnam and Phillipines. During the year 1999 to 2003, Ministry of Forestry reported that average of annual capacity of rattan production both for natural and cultivated reachs 696,000 ton, originated mainly from Kalimantan and Sulawesi Island. Share of
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cultivated rattan to the national rattan rattan production is about 40% or about 278,400 ton/year Table 3-47. Annual sustainable rattan harvesting in Indonesia Regions Sumatera Kalimantan Sulawesi Nusa Tenggara Total
Production (ton) 106,900 193,000 361,000 36,000 696,000
% 15.3 27.7 51.8 5.2
Erwinsyah (1999) said that record of rattan cultivation in Central Kaliantan begun at Barito River area which mostly covers district of Barito Selatan and Barito Timur in 1850. The area of rattan cultivation grew rapidly and reached 15,000 ha, the dominant species is rattan irit (Calamus trachycoleus). The rotan irit species harvested at the age of 7-8 years, initally it used only for local needs, but then it becomes an inter island trading commoditiy and even become export commodity. Almost all rattan production from Central Kalimantan comes from small holder farming. In recent years, rattan production decreased significantly as the response to the decrease of market price. Usually, when market price low, rattan farmer usually keep the rattan their farm and will increase production when the price getting better. Rattan production of Central Kalimantan is presented the following table: The major rattan producer in Central Kalimantan are District of Katingan and Barito Selatan, they hold about 80% of the total rattan production with the monthly supply capacity of each district about 10,000 ton. In year 2004, Government of Indonesia has issued the regulation to ban the export of raw material of natural rattan rattan, this is to protect environment besides to secure the supply of raw material for domestic furniture industry. Performance of Existing Rattan Processing Companies Based on data from Ministry of Industry (2002), the number of registered rattan industry in Indonesia is about 584 industries, which distributed in 24 provinces. Based on the total national production capacity, semi-finish rattan industries reach 245,000 ton/year, while finished rattan industries obtain at 350,000 ton/ year. From this figure, around 10%of semi-finish production capacity in 2003 are oriented for export including 50% of finisih production capacity. About 50% of the rattan industries are located in Java Island, they are separated in several location such as District of Cirebon, Surabaya, Jabodetabek, etc. District of Cirebon has the highest number of rattan industry as about 30% of the industry located there.
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Finish rattan industries in Cirebon reach 91,000 ton in year 2004. Total national production is estimated around 270,000 ton in the same year. Domestic consumption of finisih rattan achieved around 130,000 ton which is equal with export volume for finish rattan product. Table 3-48. Export of rattan product from Indonesia
Product Raw Material Semi-finish Finish Total
Source: Asmindo 2004
Export Volume (Ton) 2000 16,545,470 2,290,823 117,976,211 136,812,604 2001 18,558,960 2,380,203 115,944,786 136,883,949 2002 17,188,534 5,751,543 133,386,540 156,326,617 2003 5,207,705 22,740,576 136,887,641 164,835,922
Growth -31.977 114.916 5.080 6.408
It is important to know that rattan product especially furniture is nearly the same to fashion product which has elastic market, eventhough the global economic is weak but the rattan product trading is relatively stabil or even increase. Market Opportunities Almost all sulphured rattan from Central Kalimantan bring to Cirebon (West Java), in Cirebon it sorted and manufactured are made to meet the local standard. Then most of Indonesian rattan products are sent to foreign destination countries. The main export destination of Indonesia rattan furniture product are Europe countries, it is about 47% of total rattan furniture product. In the next five years, the production is projected to be increase as the Government of Indonesia issued export ban policy for natural rattan in year 2003, while the area of rattan cultivation is expanded. Table 3-49. Indonesian export of rattan furniture by country of destination Importer 2001
United States Europa Japan Australia others Total
Import Volume (ton) 2002

21,960,864 59,030,355 17,585,515
Growth 2003
18,304,100 64,068,455 18,170,509 1.17 11.08 -0.98 19.07 14.24
8.66
17,883,464 52,002,451 18,530,114
3,702,309
23,826,448
4,783,293
52,854,735
5,248,978
31,095,605
115,944,786
133,386,540
136,887,641
From international furniture data, currently rattan furniture takes 2% of total trading furniture. Considering the shortage of wood raw materials for wood-basee furniture in many countries, this means that the market oportunities of rattan
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product is very big as long as it can accommodate the design trend and market prefference. As shown in the figure before, rattan can be exported in several types of product that are raw material (only permitted for cultivated rattan), semi-finish (Smooth Polish, Peal, Core, Weaving), and Finish Product (Furniture, handicraft). The number of export is presented in the following table: Labor Force Rattan furniture requires specific medium to high skills, for example skill of weaving or designing models. Currently availability of quality labor force for furniture finishing in Central Kalimantan is limited. However, Labor force can be imported from several rattan furniture centers in java such as Cirebon, Surabaya, Jabotabek area, etc. The other choice is conducting short training in Central Kalimantan using cooperation with regional government instances. Environemtal Analysis As widely known, rattan furniture industry can absorb all types and sizes of raw material, besides the waste of production still useful for several uses, so that theoretically this industry vary less polluted environment. Negatif impacts possibly appear if raw material obtained from unsustainable natural rattan harvesting. In such case, many countries will refuse the rattan products which use unsustaible raw material. To overcome the issues, it is important to promote rattan cultivation for sustainable rattan raw material supply, besides creating a certification system that certify the product from sustainable rattan harvesting or from rattan cultivation. F. P u l p & P a p e r ; Pulp-Base Timber Estate and Processing General Product Feature The pulp and paper industry converts wood or recycled fiber into pulp and primary forms of paper. Other companies in the paper and allied products industry use the products of the pulp and paper industry to manufacture specialized products including paperboard boxes, writing paper, and sanitary paper. Processes in the manufacture of pulp and paper can, in general terms, be split into three steps: pulp making, pulp processing, and paper/paperboard production. Paperboard sheets are thicker than paper sheets; paperboard is thicker than 0.3 mm. In general, however, paper and paperboard production processes are identical.
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Pulping Pulping is the process of dissolving wood chips into individual fibers using certain methods. At this stage, the processed furnish (wood or other fiber source) is digested into its fibrous constituents. The bonds between fibers may be broken chemically, mechanically, or by a combination of the techniques called semichemical pulping. The choice of pulping technique is dependent on the type of furnish and the desired qualities of the finished product, but chemical pulping is the most prevalent. Currently pulping uses various types of wood. However, other materials such as dried rice stalks, straw, rosella, kenaf bagasse, and ketebon, and used paper pulp can also be utillized for pulp production. Chemical pulps are typically manufactured into products that have high-quality standards or require special properties. Chemical pulping degrades wood by dissolving the lignin bonds holding the cellulose fibers together. Generally, this process involves the cooking/digesting of wood chips in aqueous chemical solutions at elevated temperatures and pressures. There are two major types of chemical pulping currently: 1) kraft/soda pulping and 2) sulfite pulping. These processes differ primarily in the chemicals used for digesting. Sulfite and Kraft technology use chemical materials for separating lignin from cellulose fibre (bleaching process). In kraft process, wood chips is mixed with whitening materials such as chlorine or its derivative material in a cooking process. Sulfite method produces brighter, softer, and dilute pulp than kraft pulp. Sulfite and kraft mostly produce rayon, acetate fibre, plastic filler and cellophane. Used paper can also be recycled for pulp making through the same process (Slamet, 1997 in Yulianti 1999). Semi-chemical pulping is often very stiff, making this process common in corrugated container manufacture. This process primarily uses hardwood as furnish. The major process difference between chemical pulping and semichemical pulping is that semi-chemical pulping uses lower temperatures, more dilute cooking liquor or shorter cooking times, and mechanical disintegration for fiber separation. Mechanically produced pulp is of low strength and quality. Such pulps are used principally for newsprint and other non-permanent paper goods. Mechanical pulping relies on physical pressure instead of chemicals to separate furnish fibers; however, chemicals are sometimes added at the various stages of refining. Processes include: 1) stone groundwood, 2) refiner mechanical, 3) thermomechanical, 4) chemimechanical, and 5) chemi-thermo-mechanical. Pulp-Base Timber Estate Pulp and paper production requires several major inputs such as basic raw materials (wood/bamboo chips, sawdust, used paper, etc), water, and chemical material (sodium sulide, hypochlorite, chlorine dioxide, additives, etc.) As a mater of fact, most of pulp factories in Indonesia use wood and waste wood as the major raw material. Only a few use bamboo and used paper. Many of them
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use wood taken from natural forests, waste wood resulting from the land-clearing activity by a plantation companies, and waste wood resulting from logging activities. Since wood supply from natural forest are limited and since the output/product of such forests are also required by other industries, the Government has developed and implemented a pulp related timber estate program since 1985 which was implemented under the supervision of the Ministry of Forestry. At present, there are large numbers of mature (ready to be harvested) pulp-base timber estate. Those are timbe estate which was developed using reforestation fund in degraded forest which originally planted by forest concession holder or other large pulp companies. Present potential product of pulp-base timber estate are still large compare to production capacity of pulp, since many large companies who own the timber estate hit by economic problem during crisis and pulp processing industries are slowly progressed while there is no more government subsidy from reforestation fund. Table 3-50. Growth of Pulp-base Timber Estate area in Indonesia Year
1995 1996 1997 1998 1999 2000 2001 2002 2003
Area (ha)
676,211.21 848,531.21 949,414.21 1,032,018.21 1,117,762.21 1,175,914.21 1,232,213.21 1,319,827.21 1,641,518.00
Growth of Area
31.56 25.48 11.89 8.70 8.31 5.20 4.79 7.11 24.3
Source: Minsitry of forestry (2004)
Performance of Indonesian Pulp and Paper Companies In 2003, the national capacaity has reached 6,29 million ton per annum,which owned by 80 pulp industries, including 10 integrated to paper plants such as PT. Indah Kiat Pulp and Paper, PT. Kertas Kraft Aceh and PT. Pakerin. (see the detail profile of Indonesian pulp industry is presented in table 3.). If compared to the output production in year 2003, it is indicated that maximum capacity utilization (84%) is achieved. This high capacity utilization of pulp industry will lead to a more attractive as investment consideration for pulp and paper industry. Indonesian pulp started slowly before 1990, before timber were ready for yield. In 1993, the total capacity of pulp industry was 1.33 million ton per annum (APKI, 2003), but in 1997 the annual capacity shot up to 4.23 million tons. Despite the economic crisis in 1998, the national capacity grew further in 1999 to 4.54 million tons, mean while the other industries which relying on imported raw material have
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remained in doldrums. The crisis which made value of rupiah sink, has made pulp and paper industry more competitive on the export market Abundant supply of natural raw materials and low labor wages were two most important factors in the past that lured many pulp and paper investors into Indonesia. Before the crisis, BKPM approved numerous new investment and expansion projects, however, following the outbreak of crisis all the project are rescheduled due to high dependency to foreign borrowing as pulp industry is highly capital intensive projects. Table 3.51. Profile of Indonesian Pulp and Paper Industry in 2003
Status and Location (2003)
- State owned - Domestic Private Investment - Foreign Private Investment Total - Integrated (pulp and paper) - Pulp - Paper - Java - Sumatera - Kalimantan Total Installed capacity (ton/annum) - Paper - Pulp
Source: APKI (2003)
No. of Mills
3 65 12 80 10 3 67 64 14 2 80 1998 7,479,530 4,323,600
Installed Capacity (ton per annum)

Pulp 240,000 3,322,100 2,725,000 6,287,100
5,072,100 1,215,000 340,500 5,382,000 564,600 6,287,100 1999 9,097,180 4,543,600
Paper Pulp 337,000 3.8 % 5,041,180 52.8 % 4,666,500 43.3 % 10,045,580

2,517,000 7,528,580 8,554,440 1,491,140 10,045,580 2000 9,116,180 5,228,100 80.7 % 19.3 % 5.4 % 85.6 % 9.0 % 2001 9,904,080 5,587,100
Paper 3.4 % 50.2 % 46.5 %

25.1 % 74.9 % 85.2 % 14.8 % 2002 10,065,580 6,087,100
The biggest pulp production capacity is of PT. Riau Andalan Pulp and Paper in Riau, while the second largest is Sinar Mas Group through PT. Indah Kiat Pulp and Paper (IKPP), followed in the third by PT. Lontar Papyrus. The largest paper producer in the country is PT. Indah Kiat Pulp and Paper, now having 2,110,000 ton per annum, produced from three companies in Serang (Banten), Tangerang (Banten) and Bengkalis (Riau). The two paper mills in Kalimantan are in East Kalimantan (PT. Kiani Kertas) and West Kalimantan (PT. Wetkalindo Pulp and Paper Mill). Compared to the other islands, Central Kalimantan is relatively left behind in development of pulp industry, the major weakness are low capacity of all season transport infrastructures and ineffective industrial support (transportation, trade and business service). More investment incentive will be required to compensate the weakness and make Central Kalimantan more competitive not only for pulp related timber estate but also pulp and paper industry.
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Table 3-52. Production Capacity of Major Pulp Producer in Indonesia Name of Companies
Long Fibre Pulp - PT. Inti Indorayon Utama - PT. Kertas Kraft Aceh Short Fibre Pulp - PT. Riau Andalan Pulp & Paper - PT. Indah Kiat Pulp & Paper - PT. Lontar Papyrus - PT. Kiani Kertas - PT. Tanjung Enim Lestari - PT. Pakerin - Others Total Paper - PT. Indah Kiat Pulp &Paper - PT. Pindo Deli Pulp & Paper - PT. Pabrik Kertas Tjiwi Kimia - PT. Pakerin - PT. Fajar Surya Wisesa - PT. Surabaya Agung Industri Pulp and Paper - PT. Aspex Kumbong - PT. Riau Andalan Kertas - Others Total
Source: APKI (2003)
Location
North Sumatera Aceh Riau Riau Jambi East Kalimantan South Sumatera East Java
Status
PMA BUMN PMA PMA PMA PMDN PMA PMDN
Prod. Capacity (ton/annum)

240,000 165,000 2,000,000 1,820,000 665,000 525,000 450,000 145,000 277,100 6,287,100 106,000 700,000 1,305,000 1,465,000 1,044,000 700,000 500,000 486,800 430,000 350,000 2,958,780 10,045,580
Tangerang Bengkalis Serang West Java East Java East Java West Java East Java West Java
PMA PMA PMDN PMDN PMDN PMDN PMA
Global Market Condition International Market In recent years, world pulp production and consumption shown a fluctuation, the highest production occurred in year 2000 before it declined in 2001 and had a slight increase in 2002 and 2003. Total wood pulp production in 2003 was about 167.7 million tons. The top producer country was USA, which has about 53.5 Million tons of pulp production, while at the same time, they also become the largest pulp consumer which consumed about 54.5 million tons in yer 2003. PricewarterhouseCooper (2004) reported that demmand of pulp and paper products is closely linked to trends in gross domestic products (GDP). Most western nations reported low GDP growth rates in 2003. Ranging from 0.1% in France to 3.4% in New Zaeland. The United States reported 3.1%, Japan 2.3% and Canada 1.6%.
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Table 3-53. Major Producer Countries of Wood Pulp

Country 2000 Production USA Canada Finland Sweden Japan Others Total Consumption USA Canada Japan China Finland Others Total
*) Preliminary Source: FAO (2003) and PCI
Volume (000 tons) 2001 2002 53,680 25,110 11,168 11,028 10,792 165,744 165,744 54,752 14,071 13,374 9,857 9,656 166,362 53,569 25,744 11,729 11,382 10,668 167,633 167,633 54,470 14,205 13,047 10,175 9,762 168,400
2003 52,355 26,200 12,012 11,441 10,451 168,333 168,333 54,400 14,280 13,100 10,277 9,855 168,700
57,831 26,696 12,009 11,545 11,373 171,476 171,476 58,611 15,090 14,333 7,680 10,472 171,181
While there was a slight increase in pulp and paper volume and price in 2003, but there was an indication of over capacity that hamper the sector especially in North America and Europe. In United States, a reduction in production capacity resulted in higher prices for newsprint and magazile papers, conversely, proces for these products decresed or remained stable in Europe where over-supply persisted. Table 3-54. Major Producer Countries of Paper and Paperboard
Country 2000 Producer: USA Canada China Japan Germany Finland Sweden Others Total Consumer: USA China Japan Germany U.K Italy France Others Total
Source: FAO (2003)
Volume (000 tons) 2001 2002 81,438 19,834 37,929 30,717 17,879 12,502 10,534 109,597 320,430 88,606 44,130 30,938 18,544 12,316 10,983 10,926 106,455 322,898 81,792 20,226 37,929 30,686 18,526 12,776 10,724 111,690 324,349 89,507 44,322 31,826 18,807 12,218 11,727 10,930 104,887 324,224
2003 81,600 20,156 38,050 30,620 18,852 13,021 11,121 117,416 330,836 89,400 45,100 31,930 18,851 12,350 11,822 10,960 110,295 220,413
86,545 20,921 35,439 31,828 18,182 13,509 10,786 106,636 323,846 93,685 42,266 31,860 19,087 11,496 11,273 11,394 103,654 324,715
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In the other hands, GDP growth and consequently demand was much stronger in emerging market, with China posting a 9.1% increase, India 7.6% and Russia 7.3%. as growth in those nations continues to outpace western antions, thei influences to global supply and demmand equation will increase. The forest industry in China and Russia continue to change, Chinese demmand for pulp and paper products is out-pacing domestic supply. Should this trend continue, the demand from China for forest product will become a noticeable influence in worlds market. Generally, Russia has a low production cost and vast timber supplies, so that product from Russia will have significant impact on world market. National Market Condition Despite the economic crisis in 1997 and issue of natural raw material shortage, Indonesian pulp production continued to show good performance. In 1997, the production was 3.06 million tons, up to 4.67 million tons in 2001 and in 5.1 million in 2003. PT. Riau Andalan Pulp and Paper and PT. Indah Kiat are the two biggest pulp producer, in 2003, their share to the national pulp production are 38.6% and 22.6% respectively. Table 3-55. National Pulp Production and Export
Year Production (000 ton) Export Volume (000 ton) Ratio Export to Production
1997 1998 1999 2000 2001 2002 2003 2004*
3,058 3,430 3,694 4,089 4,665 4,969 5,300 5,777

**) Projection
1,186 1,656 1,179 1,329 1,698 2,245 2,350 2,541
38.78 48.28 31.92 32.50 36.40 45.18 44.34 44.0
*) preliminary; source: APKI;
As shown in the table 3.55 above, Indonesian pulp export, which has been dominated by short fiber pulp, has been increased by average 12.9% (1997 to 2003). Simultaneously significant grow of demand for long fiber pulp resulting an increasing import volume. Long fiber pulp is usually a base material for strong industrial paper including cement bay and other paper (tissue). Indonesia pulp and paper industry still has opportunities to grow due to abundance supplies of basic materials as large number of HTI ready for harvest in the future. Geoposition of Kalimantan is another advantages particularly its proximity to Asian country as dominant consumer.
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Table 3-56. National Pulp Consumption and Import

Year Consumption (000ton) Import Volume (000ton)
1997 1998 1999 2000 2001 2002 2003

Source: APKI
2,815 2,613 3,472 3,529 3,531 3,550 3,790
943 839 957 769 564 826 840
As the increase of population and economic condition, estimated Pulp consumption in 2010 is as follows: Table 3-57. National Pulp Consumption Projection
Year Consumption (000ton) Estimated Population
Source: PCII Estimation
2003 3,790 219,888
2004 3,914 222,624
2005 4,041 225,339
2007 4,304 230,703
2010 4,724 238,576
In line with pulp production graphic, totally, national production of paper also has continued to increase. Data Consult (2003), analyzed that the increase was a result of the rupiah fall or the soaring of the US dollar against rupaih. Producer was boosted to increase production because of good sales export market. In 2000, export dropped about 7.6% but still considerable in volume at 2.84 million ton. In 2001, exports dropped further because of falling price in the world market while demmand on the domestic was picking up. Table 3-58. National Paper and Paperboard Production
Year 1997 1998 1999 2000 2001 2002 2003 Production (000 tons) 4,821 5,487 6,720 6,849 6,951 7,212 7,339 Export (000 tons) 1,800 2,833 2,950 2,837 2,345 2,446 2,489
Ratio Export to Production
37.33 51.65 43.91 41.43 33.74 33.92
Source:APKI , 2003
From total year 2000 paper production (7 million ton), 61% produced as industrial paper, 34% culture paper and the rest was for other paper commodities. In general, domestic demand for paper are increasing, even the consumption percapita of paper is still very low (17 kg/ year) if compared to China (25 kg/year), Malaysia (30 kg/year) and opposed to US consumption (300 kg/year).
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The previous economic crisis has influenced the domestic consumption of paper, mainly industrial paper to a slow growth between period 1997 2000. In the contrary consumption for culture paper and other paper were declined because closely related with the slide down of purchasing capacity. The national paper consumption year 2000 is diversified into 76% industrial paper, 20% culture paper and 4% as other paper product. Where the demand for domestic consumption considerably equal with export market. Table 3-59. Paper and Paperboard Consumption Import
Year 1997 1998 1999 2000 2001 2002 2003 Consumption (000 ton) 3,283 2,783 3,914 4,224 4,806 5,016 5,104 Import
(000ton) Consumption per capita (kg/capita)
261 130 144 213 200 250 254
16.9 14.1 19.6 20.8 23.3 24.0 26.0
Source: APKI , 2003
Data Consult (2004) predicted that the demand for paper will continue to pick up in the next four years. The demmand for tissue paper will grow 5% annualy, industrial paper 8%, cultural paper 17.6% and cigarette paper by 0.7%- altogether by about 11% annualy on the average. Table 3-60. Paper Consumption Projection Type of product 2004*)
Cigarette paper Industrial Paper Cultural Paper Tissue Paper Total 28.6 3,911 1,290 130 5,361
Volume ( 000 tons) 2005*P 2007*P

30.0 4,224 1,549 143 5,947 33.1 4,927 2,231 174 7,365
2010*P
36.2 5,800 2,941 202 8,979
Source : Data Consult and PCII calculation
The increase of domestic consumption will create a problem with dwindling supply of raw material, considering the HTI projects have not been fully productive. So that a new invstment in timber estate is absolutely required and shuld be stimulated by several incentive from government. Price Fluctuation As may known, around 70% world pulp supply is controlled by Norscan countries (North America and Scandinavian), which together produce some 22-24 million ton per annum and consumed most of the production for their own demand of paper industry. The prices of Indonesian pulp are fluctuated to follow the demand influence of Norscan in international prices, which were declining from US$ 863 per million ton in 1995 to US$ 350 per million ton in early 2001 and again increase to US$ 460 per million in year 2003. Although foreign currency prices is
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declining, Indonesian pulp still obtained benefit from rupiah depreciation currency cost. Land Resources for Timber Estate (HTI) in Central Kalimantan As one of forestry production center in the past time, Central Kalimantan has a big number of forest area. At present, based on Perda No. 8 year 2003, allocated area for forestry is 8,207,567 ha as follows: Table 3-61. Area allocated for forestry based on spatial plan
No 1 2 Landcover/Landuse Protected area Cultivated - Production Forest - Education and Research - Limited production Total Area (Ha) 2,256,608 4,400,333 4,989 3,802,245 8,207,567
Source: Bappeda of Central Kalimantan Province (2004
Due to Decree of Ministry of Forestry no. 35 year 1997, timber estate is planted forest which is established to increase potentiality and productivity of production forest in order to meet timber demand, through application of intensive sylviculture system. Government Regulation stated that timber estate development is directed to degraded land (bare land, covered by bush, grass) inside production forest, while currently area of degraded land inside forest area in Central Kalimantan is about 2,815,803 ha (+ 60% of the total area of production forest), this large area will be a big challenge and also a potentiality for pulp timber estate regarding so far the planted timber estate in Central Kalimantan is 166,880 ha. Infrastructure and Supporting Facilities Sub sector of forestry especially secondary industry required infrastructure for transportation of many forest product. Commodity of forestry currently transported using land transportation and river transportation, and river transportation is the most dominant ones. Heavy equipment renting companies are available in Sampit and Pangkalan Bun, particularly for forestry exploitation and plantation preparation. Service of cargo transport is available but number of vehicle is limited. Governments Sectoral/Industrial Policy 1. Investment in Forest Concession in form of Forest Utilization. According to law no. 41 year 1999, beside HPH, forest utilization is allowed in order to increase the income and economic added value through certain
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permitted activities. This forest utilization is not only in production forest but also in certain zone of national park 2. Timber Estate (Hutan Tanaman Industri/ HTI ) Establishment of plantation forest is expected to become the other form of forest rehabilitation as long as it is conducted in degraded land, not in productive forest. In order to stimulate the development of HTI, provincial government expected that the authority to issue permit of HTI transferred from central government to the regional government. This is considering the demand of wood is keep increasing and need immediate action. Central government regulates the implementation of HTI through PPNo. 34/2004, and some decrees of Ministry of Forestry.
G.
Particle Board; Particle Board and Medium Density Fiber Board (MDF) General Product Features Particle board is categorized as wood panel product. In general, it is defined as a structural material made of wood fragments or fiber, that are mechanically pressed into sheet form and bonded together with resin. Particle board is made up of many small 'particles' or bits of wood glued together and pressed. When the edge of the board is scraped these paticles about 1/16" and less tear out randomly leaving a textured appearance. Particle board is usually coated with some kind of flat paper or laminate surface to encase the particle core, which also provides some strength. Particle board is actually very weak and can't be used in anything structural like stairs or floors. MDF or Medium Density Fiberboard is a type of particle board that is often used in the construction of subwoofer enclosures. MDF is more like a heavy thick cardboard than particle board. There is no paper or laminate coating on the surface, and when cut it creates a smooth edge and makes lots of fine dust. MDF is often used in lower-end painted cabinets and furniture. Its edges will hold a crisp pattern when cut but dent easier than wood; and it has some strength but not nearly as much as plywood. It can't be used structurally either but is often used for millwork in place of real wood.
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Source: www.ronhazelton.com
Figure 3.12. MDF (left) and Common Particle Board (Right) Masonite is a type of High Density Fiberboard and has similar properties to MDF but it is generally much harder and sold in thinner sheets. It's dust is not as fine as MDF, probably because of the coated / baked hardened surface on one or both sides. Large-scale production of MDF began in the 1980s. Its name derives from the distinction in densities of particleboard. MDF typically has a density of around 800 kg/m. Low density fibreboard, such as caneite, ranges in density from 160 to 450 kg/m, while high density fibreboard, such as masonite, has a density of around 1000 kg/m. The same manufacturing process is used. And finally, OSB or Oriented Strand Board is a plywood-like sheet product made from long chips -strands- of wood, scattered across the sheet randomly and pressed and suspended in a resin glue (similar to what holds the layers of plywood together). It has a rough, uneven surface and is generally used in situations where plywood would be used but the strength of regular plywood isn't required, like for house sheathing, but not for flooring. It used to be far less expensive than plywood but recently a lot of it is being sent to Iraq and Afghanistan for rebuilding programs so it has become nearly as expensive.
Source: www.ronhazelton.com
Figure 3.13. Oriented chips in Oriented Strand Boards (OSB) Particle Board Processing Particle board, is made by binding wood particles ranging in size from flakes to sawdust together with a suitable adhesive, such as a plastic resin, and pressing or
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extruding them to form sheets. Particle board is used as a cheaper substitute for plywood in some applications; but even though it has a higher density, it is less resistant to puncture and the effects of weather. When properly veneered it is suitable for making furniture. In its raw form it makes an excellent subflooring for dry locations. Generally, particle board processing comprises six major steps such as: preparation, gluing, mat forming, pressing, sanding and stacking, and packing. In preparation step, raw materials (mainly wood waste) are turned into chips using drum chipper rotary, later those chips are processed to produce flakes and then they are dried up. The flakes are processed again to create particles, smaller particles are separated from the bigger ones. Smaller particles are used for outer part of particle board while the bigger are glued together using urea formaldehyde (UF). In gluing process, wood particle are blended together with resin and other supporting chemical materials such as stearic acid, hardener-OD, wax-OD, phenolic formaldehyde, melamine formaldehyde and urea formaldehyde. After gluing process, all glued materials are cooled down and come to mat former. During mat forming process, glued materials are molded as the desired size using flake form which is consist of steel structure and sheet metal work. To strengthen bond between wood particle, particle wood processing uses high pressures hydraulic and high temperature. Usually it uses 350 Newton/cm2 pressure and temperature at 200O C. Raw Material Particle board technology is developed due to the concern over the availability of long-term supplies of wood fiber. With the rapid dwindling of forest resources, wood is becoming a rare and most sought after commodity, thus creating scope for alternate wood substitutes. As an alternative, recently, many particleboard/MDF industries in Malaysia utilized rubber wood with a little mixed hardwood thrown in. Particle board industry converts almost all of raw material (+100%) into end product. This is counted as very efficient if compared to plywood (55%), sawn timber (50%), wood working (35%) and furniture (25-30%). It can also utilize residues of wood processing plants (ply wood, sawn timber, furniture, etc.) as well as utilize wood from planted trees like rubber. Under current land use situation, Central Kalimantan still has a big potentiality for improvement of particle board industry as it still has a large area of forest and also large area of old rubber trees as an alternative of raw material. By 2003, about 47% of plantation area is planted by rubber tree. These rubber plantation consist of juvenile trees on about 103,404 hectare, productive trees on about 190,404 hectare and old/damaged trees were technically approximated about 41,094 hectare. From the old/damaged trees, the number of stands is
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approximated about 14,793,840 trees, with average is 360 stands/ha (M.J. Rosyid et.al, 2001). The number of potential rubber wood logs are 8,107,172 m3 (1.818 stands is equivalent with 1 m3 rubber woods) (M.J. Rosyid et.al, 2001). Performance of Existing Industries The story of particle board industry in Indonesia has been started since 1975 as the first Pilot Plan of Particle Board project was started in Cibadak-Sukabumi. Continued success of the project, the second particle board industry was established in East Kalimantan by PT. Bukuan Sawmill. The particle board industry, and also the other wood processing industries, met their best time as the government issued log export ban in 1984. it is mostly integrated to the other wood processing industry mainly plywood, as initially it was aimed at utilized the waste from wood processing. The number of particle board/MDF mills increased from 19 factories in 1994 to 36 particle board in year 2003. The production capacity also increased increased from 1.2 million m3 to the production capacity of 1.7 million m3 in 2003. The hardest time for particleboard industry is in year 1997 as many plywood industries collapsed, the production of particle board decreased about 40% as many particle board industries -which were integrated to plywood industries- fell in fulfilling raw material because they relied their raw material supply up on plywood companies. The production increased again in the next year as many particle board industries adjusted their equipment to the others raw materials and looked for new raw material sources for it. Table 3-62. National Particle Board Production
Year Production Capacity (000 m3) Production (000 m3) Ratio 87 85 51 62 59 64 61 62
1996 1997 1998 1999 2000 2001 2002 2003
1,400 1,400 1,400 1,400 1,450 1,500 1,550 1,700
1,223 1,193 715 869 856 953 953 1,050
*) preliminary; source: FAO and PCII
The biggest production capacity is of PT. Daya Besar Agung Corp. in East Kalimantan, followed PT. Rimba Partikel Indonesian in Central Java as the second biggest and PT. Kartika Kapuas Sari in West Kalimantan as third biggest. PT. Daya Besar Agung is subsidiary company of Daya Besar Group, it was established in 1979 as a domestic investment with initial name PT. Daya Besar Group and changed into PT. Daya Besar Agung in 1985. This company has an integrated wood processing as they also produce plywood with production capacity of 285,724 m3/year, sawn timber of 36,000 m3/year, block board about
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16,000 m3/year, polyester plywood 42,500 m3/year and overlay board about 42,500 m3/year. Table 3-63. Major Producer of Particle Board/MDF in Indonesia Name of Companies Particle Board/MDF
PT. Daya Besar Agung Corp. PT. Rimba Partikel Indonesia PT. Adinaco Serasi PT. Kartika Kapuas Sari PT. Rimba Windy Indah PT. Parindo Permai PT. Novopan Indotama PT. Perawang Lumber Industry PT. Limbah Kayu Utama PT. Partikalindo Lestari PT. Mangole Timber Production Others Total East Kalimantan Central Java West Kalimantan West Kalimantan West Kalimantan Lampung West Kalimantan Riau Jambi West Kalimantan North Maluku PMDN PMA PMDN PMDN PMDN PMDN PMDN PMDN PMDN PMDN PMDN 225,000 150,000 135,000 136,000 120,000 108,000 100,000 90,000 75,000 60,000 60,000 341,000 2,050,000
Location
Status
Prod. Capacity (m3/annum)
Market Condition International Market Based on data from FAO, world particle board production shows an increase in recent years. The production in year 2003 before is about 152 million tons or increased 33% from year 1998. As the other forestry product, demand of panel board products is closely linked to trends in gross domestic products (GDP) and population. Most western nations reported low GDP growth rates in 2003. Ranging from 0.1% in France to 3.4% in New Zaeland. The United States reported 3.1%, Japan 2.3% and Canada 1.6%. Considering the global economic condition, world consumption of particle board shows a fluctuation and has a decrease in 2001 for about 1.2% from the previous years. However, the general trends is increase as in year 2003 the consumption is about 151,786 or about 39% from it in 1998.
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Table 3-64. World Production and Consumption of three kinds of Particle Board Years Production
1998 1999 2000 2001 2002 2003 Consumption 1998 1999 2000 2001 2002 2003
Source: FAO and PCII
Production (000 m3) Particle Board Fiber Board

72,490 79,868 84,599 82,865 84,593 85,533 71,511 79,408 83,455 82,241 84,159 85,450 27,730 30,477 33,555 34,806 39,329 42,350 28,431 31,144 36,845 36,357 41,382 42,311
MDF
14,674 16,692 18,482 19,846 22,970 24,100 14,227 16,151 19,649 19,653 23,316 24,025
Total
114,894 127,037 136,636 137,517 146,892 151,983 114,169 126,703 139,949 138,251 148,857 151,786
The major producer of particle board is 2003 is USA with share about 18% to the total production, followed by Germany, China and Canada with each share about 11%, 10% and 10% respectively. However, most those countries also have high consumption of particle board, which meant they are also potential market for particle board product. Table 3-65. Gap of production and consumption in major countries*)
Country USA Canada China Germany France Italy Poland Russia Spain UK Other Total Production (000 m3) 27,979 14,751 14,697 16,852 5,835 5,303 6,163 4,089 5,747 3,725 46,843 151,983 Total Consumption (000 m3) 44,154 4,955 19,460 12,103 4,280 5,403 5,558 4,569 5,551 6,355 39,399 151,786 Gap of Production and consumption -16,175 9,796 -4,763 4,749 1,555 -101 605 -480 196 -2,630 7,444 197
Source: FAO and PCII *) for Particle board, Fiber board and MDF
In addition to domestic consumption, particle board from Indonesia is exported, even many producers say that export market is their major segment which brought higher benefit rather than domestic market. The low domestic consumption which caused by economic crisis has stimulated export of particle board product. Major destination of Indonesian export is Taiwan (+ 30%), Hongkong (+19%), and Korea (+ 14%).
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Table 3-66. Indonesian Export Volume of three kinds of Particle Board Years Production
1998 1999 2000 2001 2002 2003
Volume (000 m3) Particle Board Fiber Board

540 251 241 159 171 180 114 268 277 285 302 320
MDF
71 160 158 148 191 200
Total
725 679 676 592 664 700
National Market In 1997 and 1998, the domestic consumption was suffered by economic crisis, the consumption dropped into 14,000 m3 as a result of decreased production and lower of purchasing power of people. However, this condition began to back to the track as in 1999 the consumption increased to 231,000 m3. It is expected that the consumption will continue to grow as the economic development of the country is getting better. Table 3-67. Domestic Consumption of Particle Board*)
Year Production (000 m3) Export (000 m3) 725 679 676 592 664 700 Import (000 m3) 24 23 54 71 182 200 Consumption (000 m3) 14 213 234 432 471 550 620 699 798 919 Populations
1998 1999 2000 2001 2002 2003 2004*) 2005** 2007** 2010**
715 869 856 953 953 1,050 1,170 1,303 1,452 1,617
214356 217120 219,888 222,624 225,339 230,703 238,576
H.
Nature Tourism of Tanjung Puting National Park General Feature Tanjung Puting was gazetted as National Park on lowland area of 415,000 Ha in South coastal Central Kalimantan. It has a unique fauna and flora reserve as a secure habitat of endangered Orang Utan. This park was also the first place in Indonesia o become a rehabilitation center for orangutan. There are now three orang utan rehabilitation loaction: Tanjung Harapan, Pondok Tanggui, and famous rehabilitation camp in Camp Leakey.
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Indonesia has another rehabilitation center of Orang Utan in Bahorok North Sumatera, but available protected habitat area (Lauser National Park) is smaller compare to Tanjung Puting due high land utilization pressure.
a Figure 3.14. Key species of Tanjung Puting National Park

a. Orangutan in natural habitat b. Orangutan in rehabilitation center of Pondok Tangui c. Bekantan monkey in natural habitat of Tanjung Puting
UNESCO has declared Tanjung Puting National Park as a Biosphere Reserve, and it is also a sister park to Taman Negara Malaysia under a cooperation agreement between Indonesia and Malaysia The other recognized accessible National Parks in Indonesia are Ujung Kulon as the only habitat of Java Rhino, Way Kambas as the reserve of Elephant and Sumatera Rhino, Komodo island as the protected habitat of Komodo and Bunaken island as marine biotic conservation. Tourism Development Tanjung Putting National Park offers a unique potency of ecotourism development. The prominent icon to be developed is wildlife watch adventure by using various tracking facilities. Besides orangutan, several other intersting wildlife species to be watched are bekantan (Nasalis larvatus), maroon leaf monkey (Presbytis rubicunda rubida), and various species of birds. The park also offers beautiful sight of lowland tropical rainforest with mysterious wetland ecosystem. Trekking adventure shall be completed by river canoing to see the black swamp ecsystem and having a rest in appropriate lodge. Present attraction and tourist interest of Tanjung Putting located in development zone which are : - Tanjung Harapan as information center : - Camp Leakey as Orang Utan Rehabilitation Center : - Pondok Tangui and Natai Lengkuas:
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Additional complimentary attractiveness to the present National Parks facilities will raise the visiting of the tourist and increasing the length of stay in the park and surrounding destination. Several potential for private sector investment:
Ecotourism: - beach attraction and marine wildlife if possible (snorkeling, diving) - living (staying) in wildlife with good accommodation (Boathouse or Raft house) - improvement of tracking routes by combination of ground tracking, elevated board walking, watching stations, canoeing, etc. - river cruising to Danau Burung (Bird lake) Other potential business for National Park information center: - souvenir and handicraft - theater and live wildlife show - Small simulation
Tanjung Puting National Park is accessible by air from Jakarta, Jogya and Semarang to Pangkalan Bun, Central Kalimantan. Access to the Park is available by river transport from Kumai 15 km westward Pangkalan Bun around one hour travel.
Figure 3.15. Transportation to Tanjung Puting and Sight of Sekonyer River Air transporation from Jakarta/Semarang to Pangkalan Bun available in regular schedule that is 3 times in a week. From Pangkalan Bun to national park, daily transportation is available using long boat.
Market Opportunities
Indonesia as prominent tourism destination in Asia suffered from decreasing tourist visit volume after monetary crisis 1996 and continue to second fall after World Trade Center bombing 2001 and Bali bombing 2002. Number of tourist visit are slowly increase, but still big gap to reach the peak tourism record in 1996. Tanjung Putting destination is a specific market segment with particular consumer demand. Although regular tourism attraction (in leisure and recreation) is not a competitive supplies to ecotourism, the ecotourism facilities in many countries
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has improve it concept to accommodate more leisure interest without any degradation to environment quality of the region. More peoples are tolerated to visit national park as long as managed under the minimum disturbance to the environment. A better quality and more educated visitor will lead to an increasing income for maintenance and operation and keeping a more sustainable environment of the Park, this specific tourism segment has much better resistance to global economic impact compare to regular tourism. Considering that major competitiveness of Indonesia tourism are still oriented to its nature and culture, the tourism projection in the future will continue increasing particularly to the specific segment which are: ecotourism and marine tourism (diving and surfing). Table 3.68 : Tourism Projection (2002 to 2010) To Tanjung Putting (Segment, Number and Length of Stay)
Period 2002 2003 2004 2005 2006 2007 2008 2009 2010 Foreign 864 933 1,008 1,088 1,208 1,341 1,489 1,652 1,834 Domestik 820 910 1,010 1,121 1,278 1,457 1,661 1,894 2,159 Total 1,684 1,843 2,018 2,210 2,487 2,798 3,150 3,546 3,993 Mandays 4,231 6,452 7,063 7,734 11,190 12,593 14,175 15,959 17,970
The visitor (particularly foreign tourists) is followed the fluctuation of national tourist statistics which suffered decline during monetary crisis and after World Trade Center bombing (September 2001). The peak is reached in 1996, just before monetary crisis with 3,980 visitors. The composition of visitor in average is dominated by domestic tourist which are ranges from 47% to 57% from total visitor.
Table 3.69 Tourism To Tanjung Putting (Segment, Number and Length of Stay)
Period 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Foreign Total 807 905 1,280 1,310 1,746 1,475 107 933 366 411 864 3,536 4,319 4,319 1,959 Mandays 4,262 2,986 7,501 5,145 6,966 Total 2,021 1,458 1,227 2,031 2,234 1,574 1,215 1,238 336 172 393 695 2,342 2,342 594 Domestik Mandays 2,897 1,699 1,770 3,015 3,181 Total 2,828 2,363 2,507 3,341 3,980 3,049 1,322 2,171 702 583 1,257 4,231 6,661 6,661 2,553 Total Mandays 7,159 4,685 9,271 8,160 10,147 Average length of Stay (Days) 2-3 2 4 2-3 2-3 5 3 3-4 3-4
- Data is not avalaible
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The foreign visitor to Tanjung Puting National Parks are dominated by Tourist from North America, United Kingdom and other Europe and lower percentage are gained by visitor from Australia, New Zealand and Japan and Asia. The length of stay of tourist visit either from foreign or domestic are ranging between 2 to 5 days. Tanjung Puting National Park has difficulties in providing operation and maintenance of the park with a smaller number of tourist visit and short visiting days. Cooperation with private sector will be fruitful to improve the National Park attractiveness without scarifying ecological condition.
Table 3.70 Country Origin of Tourism To Tanjung Puting Period 2003 January February March April May June July August September October November December Total Total 49 15 12 39 77 30 71 116 123 46 55 18 651 North America 13 5 5 14 12 5 14 25 35 9 15 3 155 United Kingdom 19 1 2 10 31 11 11 17 27 18 10 3 160 Other Europe 7 6 4 8 17 9 25 45 48 7 22 7 205 Australia and New Zealand 10 3 1 6 17 2 20 19 13 12 6 3 112 Japan and Other Asia 0 0 0 1 0 3 1 10 0 0 2 2 19
Performance of Existing Natural Tourism Management
Presently many National Park are completely subsidized by Central Government, with relatively small interest to gain an independence sustainable income for maintenance and operation. Based on Governement Regulation no 34 year 2002, Tanjung Putting is divided into three zones which are:
Core zone Core zone is basic zone in national park which has high environemental value or unique ecosystem. Core zone is protected ans has a very limited utilization. Several permitted utilization are: research and development for science, education, selected activities to support cultivation. Forest zone Forest zone is surrounding the core zone in national park which has high environemental value or unique ecosystem. Forest zone has a wider utilization permit. Several permitted utilization in forest zone are: limited tourism/ecotourism, research and development for utilization, education and selected activities to support cultivation. Utilization zone Utilization zone is the outer zone of national park which has natural attraction in form of plant, animals, or ecosystem. Utilization zone should has enough
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area to secure the sustainability of nature and ecotourism potencies. The environment of utilization zone should condusive for ecotourism development. Several permitted utilization in forest zone are: tourism/ecotourism, research and development for utilization, education and selected activities to support cultivation. Based on the above mentioned regulation, proposed investment for toursim facility development will be located in forest zone and utilization zone.
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CHAPTER IV CURRENT SITUATION AND FUTURE PROSPECT OF MAJOR STRATEGIC AREAS 2 4.1. Major Strategic Area of Central Kalimantan Central Kalimantan gains the intensive regional and national shipping traffic in Java Sea. Coast line of Central Kalimantan directly faces Java Island, which has made economics of Central Kalimantan strongly influenced by economics of Java Island. Strategic area Central Kalimantan usually located in coastal and estuary. Several established strategic area in the coastal and estaury are Pangkalan Bun, Sampit, and Kapuas. Geographical position has made those areas as gateway for inter islands and export trading activities and distribution center of consumption goods for the whole province. Palangkaraya it self as capital city plays role as administrative center rather than economic growth center. Naturally, land of Central Kalimantan is crossed by many rivers which flow parallel to the Java Sea. Cities/regions inside a watershed area (upstream dan downstream) effectively connected by river transportation, but transportation infrastructure mainly inland transportation to connect one city to the others in different watershed river system is still very less. Beside three growth center of Central Kalimantan, there is Kabupaten Buntok which considered as strategic area from its high potentiality of natural resources and its location in the mid stream of Barito River and adjacent to South Kalimantan border. 4.2. A. Leading Sector In Each Strategic Area Kotawaringin Barat Area (Pangkalan Bun) 1. Major Sector
Presently, economic structure of Kabupaten Kotawaringin Barat dominated by agriculture sector and Industrial Processing, each contributes 31% and 24% respectively to the GRDP of Kotawaringin Barat of Year 2003. Agriculture sector supported by five major sub sector, that are plantation contribute (22%), forestry (10%), food crops (3%), animal husbandry (2%) and fishery (3%). Contribution of forestry sub sector to the GRDP decreased 15.25% during years 1996 to 2003, while contribution of plantation sub sector growth from 8,09% in 1996 to 22,66% in 2003.
IV-1
Table 4-1. Structure of GRDP of Kotawaringin Barat (2003) Sector 2001

Agriculture - Food crops - Plantation - Animal Husbandry - Forestry - Fishery Mining and Quarry Processing Industry Electricity, Gas, Water Construction Trade Transportation and Communication Renting and Finance Services
Source: Kotawaringin Barat in Figure (2003)
GRDP (in million) 2002

186,880.75 12,563.48 77,996.73 6,555.33 74,760.46 15,004.75 2,637.83 133,306.71 2,453.66 28,217.96 105,274.06 73,170.36 15,379.46 36,164.20
2003
202,823.59 14,080.02 91,810.38 6,716.80 73,741.91 16,474.48 2,899.31 137,903.38 2,483.70 28,338.94 109,672.98 77,162.73 15,664.27 38,978.16
176,582.32 14,229.82 62,629.74 6,452.34 76,270.52 13,999.90 2,448.70 133,944.91 2,163.42 27,719.98 102,610.98 69,950.78 14,499.89 35,478.39
From above statistical data, we can see that in recent years, major business field (sub sector) in agriculture sector has moved from sub sector of forestry into sub sector of plantation. The shortage of raw material of forestry and slow growth of HTI has triggered the decrease of forestry contribution. 2. Infrastructure and Supporting Industries
Land Transportation Kabupaten Kotawaringin Barat connected to Kotawaringin Timur through South Ass Road, the ratio of road length compared to area (road service) is 0.12 km/km2 or one of the highest rank in entire province. Currently, the road condition in Kotawaringin Barat by status is as follows: a. National Road : 167.94 Km, in medium ro good condition b. Provincial Road : 148,50 Km, in medium to good condition c. District Road : 1,030.21Km, in medium to good condition. Based on information from Bappeda of Kotawarinngin Barat, the problems of land transportation is high maintenance cost regarding labile soil type and vulnerable of erosion. Kotawaringin Barat also crossed by many rivers so that many bridge shall be built. The regional government also has develop road in rural area to break the isolation and connect rural area to the capital city, the condition of road in rural area is as follows:
IV-2
Table 4-2. Length Road surface of Kotawaringin Barat (2003) Type of Surface Paved Road Rocky Not paved Rural 5.85 km 91.80 km 533.75 km 639.90 Km
Urban 84.71 km 83.79 km 533.75 km 206.83 km
District 195.79 km 83.79 km 479.08 km 873.43 km
Sea/River Transportation Kabupaten Kotawaringin Barat has 3 major ports and 4 river berths. The sea ports of Kumai and riverport of Pangkalan Bun serve passenger and cargo transportation, while port of Bumiharjo is bulk terminal for CPO transportation. Those ports serve business activities in Pangkalan Bun and its surrounding district such as Lamandau and Sukamara. The condition of those ports is as follows: Table 4-3. Specification of Port in Pangkalan Bun and Kumai
No
1 2 3
Port name
Class Extent - Water (Ha) - Land (m2) Shipping path - Length (mill) - Wide (m) - Depth (MLWS) Tidal - Lowest - Highest Stock Field - Length - Construction - Construction year - Capacity (Ton/m3) - Condition Passenger Port (m2) Number of Visit Un loaded cargo : - Domestic Shipping - Foreign Shipping - Local Shipping Loaded cargo : - Domestic Shipping - Foreign Shipping - Local Shipping
Pangkalan Bun
V 7,570 7,060 24 50 2.5 4 7 86 Wood 1982 1 Good 1,152 121,605 57 117,472 273,317 180
Kumai
V 8,842 509,275 50 50 5 4.2 7 280 Concrete 2 Good 300 1,605 122,918 36,133 115,141 85,655
4 5
6 7 8
Source: Bappeda of Central Kalimantan (2001)
IV-3
The main problem in river transportation is fluctuation of river water during dry and wet season. During the dry season water surface down and rock or wood waste appears and increasing the risk of crash. Figure 4-1. Kumai Port in Kotawaringin Barat
Table 4-4. Specification of CPO Port in Bumiharjo No Specification 1 Path : - Width - Depth 2 River - Width - Depth 3 Berth - Construction - Dolpin 4 Stock field
Source: Bappeda Kotawaringin Barat (2003)
Value 50 m -6 LWS 500 m 42 km Concrete (120 m2) 4 unit 150 m2
Air Transportation District Kotawaringin Barat has one airport which categorized to II A, with length of runaway 1,650 m, width 30 m and operating hour 8 hours and can be landed by CN-235. The airport serves the following flight line: 1. 2. 3. 4. 5. Pangkalan Bun Banjarmasin Pangkalan Bun Pontianak Pangkalan Bun Sampit Pangkalan Bun Semarang Pangkalan Bun Ketapang
IV-4
Infrastructure Development Plan Regional government of Kotawaringin Barat has scheduled to improve road access to all ports (Kumai and Bumiharjo) in next few years. The other road segment to be developed is Kumai Tanjung Penghujan in order to improve. In order to provide good facilities for investor, local government of Kotawaringin Barat has decided to build Industrial Estate that will be taking place in Bumiharjo region, near to the Bumiharjo CPO terminal. Total allocated area is 100 ha, currently it has came to the land acquisition step (30% of total area). 3. Major Industries
Agriculture sector dominated by plantation sub sector with CPO and rubber as main commodities. From the identification result, production and area of plantation commodities are as follows: Table 4-5. Major Products of Plantation Sub Sector No
1
Commodity
Palm Oil - Fresh Bunch Fruit - CPO - PKO Rubber - (slab/lump) Coconut Pepper - Fresh Pepper Nilam Fresh Leave Nilam Oil
Area (ha)
120,519
Product (ton)
787,708 307,000 360 86,173 1,508 1,487 287 1.57
Notes
Prod: 7,29 ton/ha
2 3 4 5
21,716 5,640 5,432 400
Prod: 0,29 ton/ha Prod: 0,34 ton/ha Prod: 0,21 ton/ha
Source : Dinas Perkebunan of Kotawaringin Barat (2003)
Palm Oil Based on regional government policy, until 2003, allocated area for plantation in Kotawaringin Barat is about 368,960 Ha (Dinas Perkebunan of Central Kalimantan, 2003), alocated to 26 palm oil plantation companies through Location Permit . This number seems has reached the limit plantation so that new location permit for large area will not be issued by regional government. Until year 2003, there are about 18 plantation companies operating in Kotawaringin Barat and, amongst the largest companies are PT. Wana Sawit Subur Lestari (HGU 18,144 ha), followed by PT. Bangun Jaya Alam Permai (HGU 12,300 ha), and PT. Gunung Sejahtera Puti Pesona (9,000 ha). To produce Crude Palm Oil, there are 8 (eight) CPO mills already registered, five of them already operated while the remaining three are under construction, names and capacity of each companies is shown in the table 4-6, beside those CPO mills, 2 (two) Palm Kernel Oil (PKO) mills already operated that are:
IV-5
Table 4-6. Realization of CPO factory in Kotawaringin Barat No

1 2 3 4 5 6 7 8 1 2
Name of Factory
CPO Operating PT. Indo Truba Tengah PT. Gunung Sejahtera Ibu Pertiwi PT. Wana Sawit Subur Lestari PT. Gunung Sejahtera Putri Pesona PT. Meta Epsi Agro CPO Under Construction PT. Bumi Langgeng Perdana PT. Gunung Sejahtera Yoli Makmur PT. BJAP PKO Operating PT. Wana SawitSubur Lestari PT. PT. Gunung Sejahtera Putri Pesona
Capacity
30 Ton/hour 60 Ton/hour 90 Ton/hour 60 Ton/hour 30 Ton/hour 30 Ton/hour 30 Ton/hour 60 Ton/hour 15 Ton/hour 15 Ton/hour
Operational
1995 1997 2001 2002 2002 2002 2002
In next years, the regional government projected that all allocated area (368,960) will be planted so that the production of CPO will continue growth. By year 2005, Dinas Perkebunan forecasting that the production of CPO will reach 648,300 Ton. Table 4-7. CPO. Production and Projected Production in Kotawaringin Barat
No 1 2 3 4 5 Year 2001 2002 2003 2004 2005 Production 101,000 215,000 307,000 428,100 648,300
Source: Dinas Perkebunan Kotawaringin Barat (2003)
700,000
Production
648,300
600,000
500,000
428,100
400,000
300,000
307,000
200,000
215,000
100,000
101,000
0
2001
2002
2003
2004
2005
Figure 4-2 Realization and projection of CPO production

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Regarding the limited area for plantation expansion in Kotawaringin Barat, application of new oil palm plantation are directed to move to hinterland area of Kotawaringin Barat such as Sukamara, Lamandau and Seruyan. Palm oil from Kotawaringin Barat transported mainly to down stream industries in Java and Sumatera. In recent years it is also exported directly from Pangkalan Bun, the details is presented in following tables : Table 4-8. Market of CPO factory from Kotawaringin Barat No
1 2 3 4
Name of Factory
Operating Domestic PT. Indo Truba Tengah PT. Gunung Sejahtera Ibu Pertiwi PT. Wana Sawit Subur Lestari PT. Gunung Sejahtera Putri Pesona
Selling Volume
35,345,000 76,712,000 38,740,000 9,800,000
Receiver/Buyer
PT. BKR Belawan, Dumai PT. Smart, Jakarta PT. Smart, Surabaya PT. Best, Surabaya PT. Asia Agung Jaya, Jakarta PT. Hasil Abadi Makmur, Jkt PT SOG PT. Mega Surya Mas, Sby Malaysia Malaysia
5 1 2
PT. Meta Epsi Agro Operated Export 2,500 MT PT. Bukit Kapur Raksa Medan PT. Gunung Sejahtera Ibu Pertiwi 2,918 MT and PT. Gunung Sejahtera Putri Pesona
Rubber For rubber commodity, up to this moment Kotawaringin Barat do not has secondary industry (crumb rubber factories), the primary rubber product are transported to SIR factory in the other districts especially Kotawaringin Timur. Coconut Up to this moment, coconut is cultivated only by smallholder farmers. The area of coconut plantation growing slowly as shown in the table 4-6. Coconut mainly consumed by local/domestic market, so far no large coconut processing for a larger market Development of coconut for national or export market are not feasible from raw material supply and market absorption: Table 4-9. Growth of coconut plantation area
No 1 2 3 Year 2001 2002 2003 Area 4,448 4,461 5460
Source: Kotawaringi Barat in Figure(2003)
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Forestry Currently Kotawaringin Barat still one of the big wood producer in Kalimantan, however the amount of raw material from natural forest is going decrease about 40% from the amount of five years ago. Some of the forestry company such as PT. Korindo and PT. Tanjung Lingga have explore the wood resource in other province to fulfill the need of raw material for their plywood industries. 4. Labor Force
Labor force resources in Kotawaringin Barat come from local people and also from transmigrant. Total number of work force in this district is 94.296 (46,29% female and 53.71% male), This means that 71,22% of the total population is work force. Based on education level, the vast majority of labor force in Kotawaringin is low skilled (graduated from elementary school or lower) about 70%, the medium skilled labor (junior high school and high school) about 25%, the other is skilled labor (University) about 5%. 5. Prospected Industries/Commodities
Based on the above mention condition, Kotawarngin Barat is suitable for development of secondary and tertiary industry such as Wood industry (Moulding, pulp and pepper, plywood), cooking oil or shortening industry, Crumb rubber, or Pepper processing (Packing). While the primary industries such as plantation forest, palm oil, are directed to the hinterland of Kotawaringin Barat such as Seruyan, Lamandau and Sukamara. 6. Government Policy on Development of Investment
Basically, the regent of Kotawaringin Barat District has the following policy regarding the investment development: 1. Kotawaringin Barat Disrict is very open for new investment and promising to give good incentive and law guarantee for any business activities. 2. Improving cooperation between government and private company or community in form of operational cooperation (KSO) or other cooperation to promote new investment. 3. Improving skills of labor through education and training. 4. Improving infrastructure such as: lengthening of airport runaway, establish new road segments to the production centers, and improving sea port facilities to support export performance. 5. Improving cooperation with universities and research center. 6. Arranging an even distribution of the investment location The regional government also emphasizes the small holder-nucleus system in order to improve the welfare of community and to avoid upcoming social conflict between community and the plantation companies.
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Based on decree of Ministry of Agriculture no 357/Kpts/HK.350/5/12002, for new plantation with area < 25 ha only obligate to apply in Dinas Perkebunan Kotawaringin Barat. The requirements for Plantation Business Permit are: Latest company establishment certificate Tax payer registration number (NPWP) Letter of domicile from sub district officer Document of Plantation Business Plan Recommendation (location permit) from Land Registration Agency Technical consideration of land availability from Forestry Agency for any plantation that adjacent with forest 7. Technical recommendation from Plantation agency 8. Official statement from applicant that the land is below or equals to the maximum area allowed for plantation. 9. Official statement of choosing one of development pattern, the statement is registered in public notary 10. Location map with scale 1:100,000 11. Environmental Impact Assessment approval from regional EIA commission. 1. 2. 3. 4. 5. 6.
B.
Kotawaringin Timur (Sampit) 1. Major Sector
In 2003, the economic structure of Kabupaten Kotawaringin Timur dominated by agriculture sector and Trading, they contribute 35% and 22% respectively of the total GRDP of Year 2002. Table 4-10. Structure of GRDP of Kotawaringin Timur (2002) Sector 2000
Agriculture - Food crops - Pantation - Animal Husbandry - Forestray - Fishery Mining and Querry Proccessing Industry Electricity, Gas, Water Construction Trade Transportation and Communication Renting and Finance Services 246,614.18 43,248.81 29,737.16 18,932.33 104,510.42 50,185.47 3,227.52 75,949.83 3,006.97 28,660.06 145,980.87 90,601.38 14,457.67 40,183.64
GRDP 2001
244,959.35 47,642.21 34,901.83 16,722.23 94,603.13 51,089.96 3,544.79 87,202.41 3,639.00 23,382.99 143,836.09 99,218.86 14,365.04 45,817.33
2002
243,285.30 47,272.68 42,224.37 14,409.78 87,730.56 48,647.91 3,524.80 96,326.86 3,753.36 24,900.78 154,313.05 97,883.38 14,693.10 46,549.67
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Agriculture sector in Kotawaringi Timur supported by five major sub sectors, sub sector of plantation contribute about 17.6%, forestry about 36.5%, food crops about 19.6%, animal husbandry 6% and fishery 20.2%. The history of Sampit is almost the same with Pangkalan Bun, in period of 19702000 it is also known as one of forestry icon in Central Kalimantan. In recent years, major business field (sub sector) in agriculture sector has moved from forestry base into plantation. The shortage of natural timber and slow growth of HTI has triggered the decrease of forestry contribution. 2. Infrastructure and Supporting Industries
Land Transportation Kabupaten Kotawaringin Timur connected to Palangkaraya through South Ass Road, the ratio of road length compared to area is 0.08 km/km2. Capital city of Kotawaringin Timur has been connected to 9 Kecamatan (from 10 existing Kecamatan). The distance of Kecamatan that can be reached by in land transportation is as follows: 1. 2. 3. 4. 5. 6. 7. Mentaya Hilir (Samuda), distance from Sampit 48 Km Mentaya Hilir Utara (Bagendang), distance from Sampit is 28 Km Baamang (Baamang), distance from Sampit is 2 Km Kota Besi (Kota Besi), distance from Sampit is 18 Km Cempaga (Cempaka Mulia) distance from Sampit is 48 Km Parenggean (Parenggean) distance from Sampit is 105 Km Mentaya Hulu (Kuala Kuayan), distance from Sampit is 167 Km
The length of National Road is 193,000 Km, Provincial Road 173,000 Km, District Road 837,500 Km, and City Road 129,859 Km. While the length of paved (Asphalt) road is 93,290 Km, hardening 84,190 Km, and Land road is 660,02 Km Sea/River Tranportation Kabupaten Kotawaringin Timur has two major river port, one bulk terminal, 11 private owned port, and many small berth along Mentaya River. Sampit port (river port) was established in 1914 and started operation on Juli 1948. This port initially used by first Dutch Wood Industry Hantberijven. At this moment Sampit Port managed by PT (Persero) Pelindo III branch Sampit. The specification of Sampit Port, Samuda Port and Bagendang terminal is as follows:
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Table 4-11. Specification of Sampit and Samuda Port

No
1 2 3
Port name
Class - Water area (Ha) - Land area (m2) Shipping path - Length (mill) - Wide (m) - Depth (MLWS) - Highest tidal - Lowest tidal Stock Field - Length - Construction - Construction year - Capacity (Ton/m3) - Condition - Berth Length - Construction Year - Berth Construction - Berth Capacity - Berth Condition Passenger Port (m2) Number of Visit Un loaded cargo : - Domestic Shipping - Foreign Shipping - Local Shipping Loaded cargo : - Domestic Shipping - Foreign Shipping - Local Shipping
Sampit
IV 609 14,681 34 200 -4.5 5.3 7.5 4,077.5 Concrete 1991 4.5 Good 316 1981 Concrete 2 Good 1,200 2,164 2,314 178,803 72,661 739,050
Samuda
V 1,921 2,448 20 50 2,5 0.5 5.5
4 5
7 8 9
42 1984 Wood 1 50% 300 1,605 122,918 36,133 115,141 85,655
Source: Bappeda Kalteng Province (2001)
In year 2000, Crude Palm Oil (CPO) terminal was established in Bagendang area Kecamatan Mentaya Hilir Utara. This Location is chosen concerning the result of feasibility study of Development and Operational Plan of CPO Bulk Terminal in Central Kalimantan, based on research contract between PT (Persero) Pelabuhan Indonesia III with Marine Research Center of Insititut Teknologi Sepuluh Nopember Surabaya (LEMLIT-ITS). Table 4-12. Spesification of Bulk Terminal Bagendang
No 1 2 4 5 6 7 8 9 Specification Distance from Sampit Area Trestle Electricty Intefrated piping lines Tank Concrete Road Loading Point Value 23 km 46.7 Ha 6.75 x 48 750 Kva,mA 250 Ton/jam 3 unit 10 x 600 M2 525 M2
Source: Profile of Kotawaringin Timur (2003)
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Air Transportation Kabupaten Kotawaringin Timur has one air port, the specification is as follows: Table 4-13. Specification of air port in Sampit
Specification of Sampit Airport Distance from Sampit Runaway Taxi Way Over run Apron Material of Runaway
: 4,5 Km : 1600 x 30 m : 75 x 15 m : 60x 30 m : 40 x 60 m : 57.000 m
Infrastructure Development Plan Industrial estate is one of important facility for attracing investor, in Kotawaringin Timur it will be taking place in Bagendang area near the Bagendang CPO terminal. Total allocated area is 100 ha, currently it has came to the land acqusition step by local government. 3. Major Industries
Plantation Until 2004, area for plantation through location permit is about 505,708.5 ha (Dinas Perkebunan of Kotawaringin Timur, 2004), allocated to 45 palm oil plantation companies. This number almost reaches the limit of land allocated for plantation, so it seems new location permit will not be issued by regional government. From that numbers of location permit 27 companies are operating, and 8 of them using nucleus-small holder scheme, however the planting realization of still less than 30% of total allocated area. Until year 2003, there are 5 CPO mills already registered, names and capacity of each companies is shown in the following table:: Table 4-14. Realization of CPO Factory in Kotawaringin Timur No
1 2 3 4 5 PT. PT. PT. PT. PT.
Name of Factory
Kridatama Lancar Karya Makmur Bahagia Katingan Indah Utama Uni Primacom Bumi Hutani Lestari
Capacity
45 Ton/hour 30 Ton/hour 45 Ton/hour 20 Ton/hour 5 Ton/hour
Operational
2001 2002 2002
Source: Dinas Perkebunan Kotawringin Timur (2004)
Forestry
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From the identification in field, several commodities produced by primary industry of forestry sub sector are as follows timber (log) 523,927 m3 and Rattan 10,969 m3. The production of log is decreased due to limited of log potency in forest concession; on the other hand rattan is sustainable because it has been cultivated by local people. There are also several secondary commodities and products of forestry sub sector as shown in the following table: Table 4-15. Major Primary Product of Forestry Sub Sector No
1
Commodity
Timber Base - LOG - Sawn Timber - Plywood - Molding - Veneer - Non Wood (Rattan)
Product (M3)
360,950 129,701 6,701 19,832 7,354 919
Source : Dinas Perindustrian Kotawaringin Barat (2003)
Figure 4-3. Rattan and Moulding Product of Kotawaringin Timur Fishery Kotawaringin Timur has about 10,869 ha mangrove forest, so far only 170 has been used as fish pond it also has several river flows that is potential for inland fisheries. Commodities produced by primary fishery sub sector are Catch Fish 10,000 Ton and Cultivated 18,165 Ton. Food Crops The biggest food crops product of Kotawaringin Timur is rice, in West Part of Central Kalimantan (6 regencies), Kotawaringin Timur and Katingan are the largest producer of food crops, while amongst all regency Central Kalimantan Kapuas and Pulang Pisau is bigger than Kotawaringin Timur. The area of food crops in Kotawaringin Timur is 13,000 ha while the production of paddy field 30,600 Ton. 4. Labor Force
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The number of work force in Kotawaringin timur is about 89,474 that is from the age 15-59 years. The largest labor force number is in Baamang Sub District that has about 35% of the total work force. The vast majority of the labor force is low skilled (graduated from elementary school or lower) it reach almost 77% of the total labor force, the rest is medium and skilled. The other labor force source is about 9,000 householder of transmigrant living in Kotawaringin Timur and surrounding area. They are trained labor especially for agriculture sector. 5. Prospected Industries/Commodities
Based on the above mention condition, Kotawaringin Timur is suitable for development of secondary and tertiary industry especially for forest product such as Wood industry (Moulding, pulp and paper, plywood) and rattan, beside also suitable for non wood industry such as crumb rubber. The primary industries such as plantation forest, palm oil, are directed to the hinterland of Kotawaringin Timur such as Katingan and Seruyan. 6. Policy of Investment Development
In order to improve the investment in Kotawaringin Timur, the regional government is now implementing several policies, such as: 1. One roof service for application of permit with clear finishing time, quick and on schedule. 2. Government will give hands to facilitate every problems faced by investor including land dispute solving and providing facility to domestic and foreign investor by concerning the current prevail law. 3. Improving the infrastructure and facilities.
The procedure of new investment is described by following figure:

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Application
Approval of Investment
Permit
Permit of Implementation
Domestic Investment
Requirement
To import capital goods & raw material
Permit of Implementation
- Latest company establishment certificate - Copy of NPWP - Business Plan
Alteration Plan
To import and using expatriate

To Dir. General of immigration for issuing visa of expatriate
For foreigner shall be complted by
- Alteration of business field NPWP - Alteration of Investment - Alteration of expatriate - Alteration of share holder - Extending JWPP - Alteration of status - Merger - Etc.
To employ expatriate Facility of machine/equipme nt import Facility of raw materials import

As legal basis to
- To start production - To apply for expansion of investment - Restructuring of investment - Apply for additional of raw material
Figure 4-4. Investment Application Procedure in Kotawaringin Barat C. South Barito Area (Buntok) 1. Leading Sector
Currently, Buntok area has not yet shown a strong specific performance in economic development, but in future government of Central Kalimantan projected Buntok as connector between northern part of Central Kalimantan to Palangkaraya through new road segment Buntok - Palangkaraya. Beside forest area (+ 3,700 km2) Buntok has a large swampy area (2,715 km2), this has made Buntok known as one of Rattan producer and suitable for inland fishery cultivation. In the north and east part of Buntok, government has allocated land for development of Plantation such as: Coconut and rubber which covered area of 91.339 ha.
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Agriculture is the major sector in Buntok, it is dominated about 50 percent of gross domestic product. The dominant sub sectors are forestry and plantation. 2. Infrastructure
Land Transportation Currently, Buntok City has not yet passed by one of the main road. In order to break the semi-isolation and to open the access from north part of Central Kalimantan to Palangkaraya City, governemnt has started establishment of new road segment from Buntok to Palangkaraya. The ratio of road length compared to area is 0.07 .km/km2. Until this time, the length of road in Kotawaringin Barat is as follows: 1. Type of Surface - Asphalted : 104.60 km - Rocky : 67.10 km - Not paved : 4.80 km 2. Road Condition - Good : 76.50km - Moderate : 125.00 km - Damaged : 95.00 km - Very Damaged : 78.00 km Air Transportation Kabupaten Barito Selatan has one air port, the specification is as follows: Table 4-16. Specification of air port in Buntok
Area Distance from Buntok Runaway Can be landed by Class Operational hour
Source : Bappeda Kalimantan Tengah (2001)
: 300 ha : 10 Km : 750 x 23 m : CASA 212 : IV B : 2 hour
3.
Major Industries
Forestry Based on data of Pemda Buntok, the land cover of Buntok in 2002 consists of Forest area (3,773.95 ha), Swamp (2,715 km2), River/lake (446 km2) and others (1,894.32 ha). Every year, Buntok produce about 5,000 ton rattan.
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Fishery Production of fresh water fish in year 2000 is about 15 and proceed fish about 2,7 ton. This production came from cultivation of fresh water fish in pool, floating net, public area, and mina padi (paddy joined with fishery) Plantation So far, area that allocated for plantation through location permit is about 111,500 Ha (Dinas Perkebunan Propinsi Kalimantan Tengah, 2003), the permit is given to 7 palm oil plantation companies. So far no palm oil plantation is operating. The potency of m\new plantation is still wide. 4. Labor Force
Labor force in Barito Selatan is limited, from the study of Bappeda in 2001, number of effective labor force in Buntok is about 30,000. Most of the labor force s low skilled (graduate from elementary school or lower) about 80%. 5. Prospected Industries
Kabupaten Barito Selatan is suitable for development of primary industry especially forestry (HTI, rattan cultivation), plantation (palm oil) and land fishery.
D.
Kapuas Area of District of Kapuas is about 9.77 % to the total area of Central Kalimantan Province. Naturally, it is divided into two types of land such as water ebb area in southern part which has food crop potency and non water ebb area in northern part which has potency of many plantation commodities. Economics of District Kapuas in the year 2003 still predominated by agriculture sector with its role equal to 55.36 % with dominant sub of sector is food crops agriculture. Occupying the second biggest is commerce sector with role equal to 17,05 % and third biggest is service sector with role equal to 8,64 %. 1. Infrastructure
Land transportation in District kapuas is very vital. District of Kapuas represents link area of band of Palangka Raya to Banjarmasin. At present, road segment of Kapuas-Palangkaraya especially in Tumbang Nusa area is under construction, this is to avoid floods which often happened in the wet season. District of Kapuas has two big rivers namely River of Kapuas Murung with length 66 km and river of Kapuas with length 600 km, they can be used as water transportation to hinterland area river. District of Kapuas also have 4 canal of
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Anjir Serapat (28 km), Anjir Kalampan (14.5 km), Anjir Basarang (24 km) and Anjir Tamban (25 km). 2. Major Industries
Forestry Pursuant to statistical there are 3 forest concessions which operate in District Kapuas. Total area of forest concession is 79,350 ha. The other major forest product of District of Kapuas is rattan. Fishery The area of water area in District of Kapuas is River ( 51,720 ha), Swamp (156,362 ha) and Lake (98 ha). Amount of fishery product year 2003 is: river fish (1,240 ton), Swamp fish (1,788 ton), Lake fish (772 ton) and Sea about to 4,931 ton. Plantation Major plantation commodity of District of Kapuas are coffee which has 603 ha area with production of 197,554 kg, rubber of 24,073 ha with production 50,124 ton and coconut with 10,280 ha area with production of 11,074 ton. 3. Labor Force
From existing data, the number of work seeker in 2004 is counted 3,897 people, it is estimated only 5 % absorbed in work field.. 4. Prospective Industries
District Kapuas is suitable for development of primary industry especially forestry (HTI, rattan cultivation), and land fishery. E. Tanjung Puting Area 1. Major Assets
Tanjung Puting is one of the most famous National Park in Kalimantan. Located in two district (Kotawaringin Barat and Seruyan), Tanjung Putting has become icon of tourism in Central Kalimantan. The total area is 415,000 ha, occupies most of the peninsula between Teluk Kumai and the Seruyan River and offers a varied natural landscape ranging from peat and freshwater swamp forests to lowland tropical rainforests and heath forests. UNESCO has listed Tanjung Puting as a Biosphere Reserve Area. The key species in Tanjung Puting National Park are two kinds of primates: the Orangutan and the endemic Proboscis monkey. The main object I as follows:
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Camp Leakey Located about 30 minutes to the right from the branch of Sekonyer river. This area also functions as orangutans rehabilitation center and become an important visitor attraction. The Camp and surrounding area is designated as a special utility zone. Over the years, the camp has served the research efforts of several scientist and students. Tourist will be able to walk on certain trails of the trail system without disturbing the research activities. On the way to Camp Leakey (on Sekonyer Simpang Kanan river), you may occasionally see crocodiles and the false gavials. Tanjung Harapan The first guard post in the park that was constructed in the late of 1970's. Tanjung Harapan was the original site of the Sekonyer Village, which was moved across the Sekonyer river. The area surrounding is designated as utilization zone. In this area, several facilities for park management as well as for visitors have been constructing. Tanjung Harapan is also an alternate orangutan center. Pondok Tanguy New established rehabilitation center for orangutans. Located between Tanjung Harapan and Natai Lengkuas, this are also designates as a special utilization zone. Rimba Lodge The word RIMBA means JUNGLE or FOREST in the Indonesian language. Located on the left side of river Sekonyer, 10 minutes upriver from Tanjung Harapan Orangutan Rehabilitation Center. The lodge is simple, clean and shady as it is covered by trees. Built with Dayak architectures, spacious and air-ness. There are 15 river-edge bedrooms and 20 rooms inland with chilling fan and teak bathrooms. The restaurant is spacious with Chinese and Western food. The lodge has been accommodated successfully for the hundred delegates who attended the GREAT APE CONFERENCE. Clients can also paddle a canoe along the river banks nearby. 2. Current Management of National Park
Designated as national park through Decree of Ministry of Agriculture year 1982, its covered area 415.040 ha. Daily management is conducted by Balai Taman National Tanjung Puting (Tanjung Putting National Park Office) Ministry of Forestry, that is located in Pangkalan Bun .
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3.
Prospective Business in National Park
The investment location in Tanjung Puting located in buffer zone, where tourism attraction can be developed and facilities can be built (trekking, transportation, safety,etc). The improvement of attraction shall pay attention to environmental aspect and following the governments rule.
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Investment Opportunities Study For Each Province of East, West, Central and South Kalimantan FINAL REPORT For Central Kalimantan BKPM - JICA
CHAPTER V CONSTRAINTS IN INVESTMENT CLIMATE 5.1. Illegal Economic Activities Issue Around 15%-20% of furniture manufactures or at least 400 companies is facing the problems of lack of raw material. An estimation the raw materials of log that needed by about 6,000 furniture companies is 12-16 million cubic meter per month, while the government allow the forest concession (HPH) to cut the log at 5.7 million cube mater per month. So there is a gap between demand and supply. Asmindo, association of furniture companies, point outs the total illegal logging is estimated at 800,000-1,000,000 cube meter per month from Papua, Sumatra, and Kalimantan and it is sold directly to Malaysia and Singapore. As it is well known the Indonesia economic is under improving while some sectors still in slow down, however in national basis the oil palm early 1998 throughout to mid-1999 oil palm area expansion slowed significantly and CPO production declined for the first time since 1969. So the palm oil situation in Kalimantan area. While coal mining of Central, South, and East Kalimantan is under growth as bulky product to be sent to Java and others imported countries. The decline in growth of investment can be contributed to the following factors: (1) The governments levy Most businessmen point out the levy that collected by Kabupaten/City have burdened the cost. From the business point of view the consumers will pay the incremental cost will be split out one part to be paid by labor and the other part will be paid by end users. (2) Consistency in law enforcement Since the reform era the opportunity for communities reclaim their land from plantation companies is more favorable. Since the fall of Suharto, the plantation companies can no longer call on the armed forces to control the security situation. Most of cases the local authority concerned encourage the business firm sit together with communities to have a negotiation and persuasion. Unable to rely on Indonesian authorities for assistance some companies have slow down their activities and effect the labor lay down or withdrawals. Other constraint is HGU land title that issued by Agency for National Land Affairs based on old map and mostly without checking in the field so the consequence the overlapping land use is common happened. Also some business permits that issued by central government could be annulled by Kabupaten / City government or vice versa. (3) Limitation of plantation concession size. In March 1999, the Ministry of Forestry and Estate Crops released regulation that limited plantation concession size. In this regulation, tree crop plantation development area was set at 20,000 Ha in any one province, and up to a
PT. Pacific Consulindo International Indonesia (PCII)
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maximum of 100,000 Ha in the whole country for a given company. However this regulation is nothing stopping conglomerates from starting up new companies in order to obtain more land. (4) Contradiction perception between Central Government (Ministry of Forestry) and Kabupaten Government on log export. The Kabupaten government considers the log is legal to be exported on the other hand the Central government has perception export log is illegal. This affects the Indonesia furniture industries. Log smuggling from Papua, Kalimantan, and Sumatra is estimated at 800,000 1,000,000 m3 with price about Rp800,000-1,000,000/m3 and the margin still at Rp.400,000.- While the log inter-island trading to Java the price is at Rp.1.8 2 million per cube meter with margin at Rp.100,000-200,000 per m3. Different margin between export and inter-island trade is due to high cost during the transportation. Different agency in issuing the business permit of Forest Plantation (HTI) and Forestry Industry (Pulp and paper industries), business permit for HTI is managing by Ministry of Forestry while the business permits for pulp and paper industries is managing by Ministry of Trade and Industry (before Cabinet of Indonesia Bersatu). Both agencies should have well coordination in promoting the both sectors. Unfortunately the coordination among agencies not to easy to be realized in the field. The Kabupaten/City government intend to ask the central government to delivery this authority the Kabupaten / City government to make it be simple. (5) No fiscal incentive The property tax (PBB) for plantation based on average estimated price whether it has good accessibility or not. This creates the jealousy among plantation within province and between island such as Sumatra which has relatively good infrastructures. Any complain has been raised and the result at moment the estimated land value has change from 44 class into 48 class. For Kalimantan island there is no special fiscal incentive for investment. (6) No accurate data available for mining business investment Except coal mining the Zircon, limestone, oil, gold, uranium, iron have no accurate data available at local government. Most of Kabupaten is waiting if any investor willing to make the exploration study to identify the mining resource accurately. However, the local government put the mining sector as the top priority. 5.2. Institutional Coordination Issue Local businessmen assessed the capability and knowledge of Kabupaten staff incharge on investment within South Kalimantan, and it indicates that needs to be improved immediately in facing the incoming situation of investment. According to BKPMD Province at Kabupaten level various organization format for investment affair have been designed therefore it make a little bit difficult to
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supervising including training program for Kabupaten staff in investment. Between province and Kabupaten there is no link of command so it has create the complicated coordination. Staff of BKPMD at Province level has staff function to Governor, while the investment staff at Kabupaten level is staff to Bupati, and the Bupati based on the UU22/1999 has responsible to their people in Kabupaten area and has no line of command between Governor and Bupati. All the business principle permits issued by Bupati and it process at Kabupaten then the HGU land title the investor should go to BPN (Agency for National Land Affairs) at Kabupaten and Province. Kabupaten Government has authorized by BPN in specific items of: 1. 2. 3. 4. 5. 6. 7. 8. 9. issue the principle permits organize the land acquisition for development solution of land dispute on utilizing land right land compensation for land that using for development decide the land distribution and absentee land decide the communal land (tanah ulayat) and its problem utilize the idle land issue the land cultivation permit prepare the plan of land use.
While the Province Government has no clear role in land affairs, all problems of land coordinated by BPN as central government agency. In UU no.22/1999 the Province Government should functions as coordinator between Kabupaten and Kabupaten and supervising the Kabupaten / City administration. The provincial government would be the extended hand of central government in region. 5.3. Regional Autonomy Issue Kabupaten and City has wide authorities to govern the country from central government through UU 22/1999. The objective is to promote a self-support capacity to the Kabupaten and city level. They have hierarchical status to responsible to central government, while province, which is stated in regulation as central government aim in local supervision; have no direct hierarchical link to Kabupaten and cities. Overcharged implementations of authorities are sometimes proceed by Kabupaten and cities particularly in issuing local regulation which more often oriented in collecting revenue through local tax and local retribution. Provincial role are weak as Kabupaten and city has hierarchical access to central government. The role of province to supervise on behalf of central government and coordination of inter Kabupaten affair are not effective. Many Kabupatens and cities are not able to allocate their routine budget from PAD (local revenue), except some wealthy Kabupaten. Excessive effort to collect revenue from tax and retribution become their target, which make a further high economy cost and low competitiveness of the region to attract investment.
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To overcome the problem of PAD in South Kalimantan the Kabupaten Government and Kabupaten Parliament issued the local regulation (PERDA) to legal the levy an commodity that pass through the river. Each Kabupaten that passed by water and land transportation mode have to pay for each Kabupaten. For instance, the CPO pass through three Kabupaten has to pay 3 times of levy at respective post, each kilogram CPO charge at Rp.10.- per post. Therefore the CPO would be charged more than one time. The PERDA used the terminology of donation of third party instead of retribution. Experiences of businessmen of oil palm plantation the levy also collected during the fruit still in fresh harvest. Their own generator, electricity in plantation complex also should pay the retribution. All of this could increasing the production cost that could be bewared by end users and also by pressed the salary of employment and wages of labor. A new Law No. 32/2004 as new revision to previous Law No. 22/1999 has been approved by legislative, which provide more hierarchical power for the provinces in coordinating and supervising the development within their Kabupatens and cities. Presidential Decree of One Roof Services To attract more investment in Indonesia, a Keppres (Presidential Decree) No. 29/2004 was implemented to easier investment application through One Roof System Services. This one roof system was operating under BKPM in close coordination with sectoral department, and aimed to provide a time cost saver service to the investor. Response from local and provincial government are mostly subject the lost of their chance (income) to manage the services. Local and provincial officer feel that One Roof System Service in central level still get some difficulties in proceeding a multi sectoral permit (like pulp which requires certain approval from Forestry and Industry and Trade). Although there also no guarantee that province or Kabupaten/ city can provide a better service if dealt with national policy level in central sectoral offices. 5.4. Dispute of Land Issue Land acquisition: require a standard regulation/ process procedure of acquisition dealing with local traditional land ownership issues require a support from local government for socialization and confirmation, involving local people HGU application process still operated by central government (BPN), takes time and complicated resulting from inconsistence boundaries of cross sectoral land use (mining overtaking agricultural land use).
Land Registration: -
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utilization permit (HGU) only valid for 30 years: around min. 5 years was use for land preparation, community empowerment and planting (agriculture sector) investor use HGU for Bank Loan Corrateral and remain land development progress left behind. Land dispute occurred to local/ indigenous ownership with many claims refer to traditional unwritten law. As understand large part of indigenous are practicing shifting cultivation, where the left area are considered as their belonging although it has re-growth into secondary forest local government should be involved as they have important role to minimize land dispute by set up socialization to local community and stakeholder since the planning to production stage. The land/property tax is installed to any plantation or HTI, soon after application is agreed by local government and no grace period implemented. Along 5-7 years before production period, investor has to pay property tax classified as produced plantation. The value of land/ property tax are arranged by central government and distinguished into areas in West and East Indonesia. There is similar value for plantation utilization applies both to conversion area with better infrastructure (Sumatra) and remote isolated area (Kalimantan). Investor will choose Sumatra instead of Kalimantan by same property tax value of property tax in Indonesia are applies base in sq meter unit, while in Malaysia hectare unit is familiar to use for plantation.
Land Dispute: -
Land and Property Tax: -
Land Database: Lack of coordinating, updating and sustain monitoring of land data resulting problem in map provision: inconsistence maps of sectoral land use (forestry, plantation, mining, etc.). lacking of actual suitability map provided by local government, whereas some field data may available in other agency, university or private sector. Investor always received an old map with obsolete data; possibility the same map given to earlier investor before they make field investigation or survey. Overlapping land use by sectoral utilization caused by lack of sectoral coordination in database monitoring
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5.5. Infrastructure Issue Inland Tranportation Central Kalimantan has the worst road condition compared to the other provinces in Kalimantan. The province facing the problems of natural constraints as it has a lot of big rivers flows from north to south and small number of population. This area needs an efficient and comprehensive road system. To construct the road in the areas would face the problems of soft soil and very limited quarry especial stone. On the other hand the investor especially the plantation site could be far away from the existing main roads (some about 10 Km or more length) so the investor should construct their own access road and drainage system. Indeed in this study the Consultant will unable to make estimation the figure the length of road that new investors should be constructed. It is depend upon the project site that will be selected by investor Supporting Industry including Distribution sector / facility Most the appropriate supporting industry and distribution sector facilities are located in South Kalimantan Province. Although basic materials were imported from Central Kalimantan, Banjarmasin as regional hub has better faciliteis includes with stary hotels, Banks, supporting industries and communication facilities. 5.6. Governments Effort to deal with the Issues At present the Provincial Government has re-inventory the land dispute and idle land as well. At some extend possible to improve the existing procedures of investment for Central Kalimantan Province, however the revised law No 22/1999 should be helpfull in improving the investment procedures and is waiting to be effective.
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5.7. Proposal for Central Kalimantan Province (1) The government should carefully consider further oil palm development; the existing plantation should be encouraged to plant their land with estate crops. The area of forestland considered suitable for oil palm development and conversion is already limited in this province. The new investor should be encouraged to establish the down stream industries of existing CPO such as palm olein industry at region. (2) The government should serious in limiting the size of land holdings private companies can obtain they should make sure that conglomerates can not acquire more land by opening up new companies. (3) Local government should actively consult local communities about further development that needs land before Kabupaten government allocates land to particular company. (4) Encourage the HTI development especially to degraded lands rather than forestlands. Redirecting HTI development to degraded lands would allow the government to facilitate the development HTI while minimizing the impact of further development on Indonesias existing forest cover. (5) Simplified the procedures and sufficient measures the law enforcement and consistency. (6) Enforce the Kabupaten Government and Kabupatens legislative, they should socialization the proposed local regulation (PERDA) at least 2 (two) years before its commencement. Authorized the Provincial Government in charge as Ombudsman (mediator) Agency to control and review the Kabupaten PERDA.
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CHAPTER VI PROPOSAL OF PROSPECTIVE PROJECT 6.1. A. Pineapple Plantation and Pineapple Canning Industry Development Production Process Pineapple
Peeling & Coring Peeled fruit, without core Procesing Canned Coctail Juice / Fruit Concentrate Syrup Paste/Jam Waste material Sweets,leather, etc Market
Rendemen/ Syrup residue Core Peel
Procesing
Concentrate Syrup Meat softer material
Extraction
Waste / residu
Animal feed
Liquid Fruit extract ready to use Processing Pineapple Syrup Market
Netralizing
Liquid waste
Pineapple (Ananas comosus Merr.), a member of the Bromeliaceae family, is originated from south America. At present, world pineapple plantation centered in several countries such as Brazil, Hawaii, Ivory coast, Mexico, and Costarica, and Puerto Rico. In Asia, it is cultivated mainly in Thailand, Phillipine, Malaysia and Indonesia. In Indonesia, Province of South Sumatera, West Java, North Sumatera, East Java and Riau are known as pineapple producer. National pineapple harvest area is approximately 165,690 ha or 25.24% from total target of fruit harvest area (657,000 ha) in 2002. Several regions in Kalimantan also cultivated pineapple in small scale such as Central and East Kalimantan. In addition to fresh fruit product, pineapple can be processed into more lasting (preserved) food or drinks with higher added value such as canned coctail/slice, syrup/juice, concentrate syrup, jelly/jam, etc.
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Based on research conducted by KAPET SASAMBA (2004), there are four types of popular pineapple product in global market such as: Fresh, Canned, Single Strength Juice, and Concentrate. Most dominant export demand is for canned pineapple than followed by fresh pineapple, single strength juice, and concentrate juice There are some issues appeare in pineapple canning industries, which are: - Requirement on pure and good quality pineapples for raw material. The pineapple canning industry should be integrated with pineapple plantation to produce a good and sustainable quality standard. - There were some pineapple industries failed because of high dependency to raw fruit produce by local farmer (e.g. Subang, North Sumatera). The pineapple from small holder usually not uniform.. - A ratio of 70% fresh pineapple can be processed into canned pineapple with additional ingredient includes sugar, citric acid and others according taste required by recipe. - Although national pineapple production is high, it doesnt configurate the potential of pineapple canning industry, still major fresh fruit were absorbed by domestic market. - Pineapple are suitable to grow in most type of soil including sandy soil and matured organic soil. Several good pineapple, which were growing in wetleand soil like in Jambi, Riau (Sambu Island), South Sumatera and Central Kalimantan.
B.
Competitiveness Pineapple can grow on almost all of soil types, however the most suitable is welldrained sandy loams with low contains of lime, fertile and loose with pH (acidity) range from 4.5-6.5. Pineapple is relatively drought-tolerant, and can be grown in areas receiving as little as 25 inches/yr. Alternatively, 150 inches/yr are tolerated if drainage is adequate. Generally, most of soil type in Central Kalimantan is suitable for pineapple plantation, particularly in matured organic soil in southern part of province especially District of Kapuas, Pulang Pisau, Barito Selatan, and Kotawaringin Timur which were prepared for agriculture development. In these districts, currently many smallholder farmers have cultivated pineapple both for their own needs or sale in traditional market. Central Kalimantan has a large potential area for pineapple plantation. Those area mostly located in KPPL area (Kawasan Pengembangan Pemukiman dan Penggunaan Lain/Area for settlement and other utilization) of each district. As previously mentioned, four districts such as Kapuas, Pulang Pisau, Barito Selatan, and Kotawaringin Timur are most suitable with availability of area.
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Even though not included in ten biggest fresh pineapple producers, Indonesia is counted as the third largest exporter of canned pineapple after Philippines and Thailand. In 2003, global export of canned pineapple reached 1,028,935 mt, out of which 12.88% is from Indonesia, this is up 12.26% of share in year 2000. Canning pineapple industries in Indonesia has been produced since 1980, recently around 6 industries were producing for export market with total capacity 282,000 ton of canned pineapple and 113,000 ton juice concentrate. The table 6.1 shows that current utilization of production capacity of Indonesia canned pineapple is around 75-80%, with the Lampung as the biggest producer. The production is intensively growing which is mostly oriented for export market. This growth has influenced large extension area of plantation which spreaded over Sulawesi and Sumatera. Lampung is the largest with 3 industries as other industries located in Java, North Sumatera, Riau and Jambi. Canned pineapple in Jambi consumes basic materials from pineapple plantation cultivates in organic soils. Table 6-1. National producers of canned pineapples
Company PT. Great Giant Pineapple PT. Tri Delta Agrindo PT. Pulau Sambu PT. Para Sawita PT. Kencana Acid Indo Perkasa PT. Sari Segar Alami Location Lampung Lampung Tembilahan, Riau North Sumatera Lampung P. Bintan, Riau Investment Status PMA PMA PMDN PMDN PMDN PMDN Capacity (ton/year) Product Volume - canned pineapple 200,000 - juice 100,000 - canned pineapple 35,000 - juice 4,000 - canned pineapple 25,000 - juice 3,000 - pineapple juice 2,000 - canned pineapple 22,000 - juice 2,000 - pineapple juice 2,000 - canned pineapple 282,000 - pineapple juice 113,000 Production (2003) 160,000 71,000 28,000 2,880 20,000 2,400 1,400 18,480 1,500 1,500 226,486 79,100
Total Capacity
Source: INDOCOMMERCIAL and PCII data
The pineapple industry is not included in investment negative list, large opportunity are clearly open for investment, as central government also intensively promoted agriculture processing product for export market. Table 6-2. Production and Consumption of Canned Pineapple in Indonesia
Year
2000 2001 2002 2003
Production (tons) 186,852 193,178 210,976 226,486
Export (tons) 131,690 135,807 149,830 159,817
Import (tons) 94 85 47 31
Consumption (Ton) 55,256 57,456 61,193 66,700
Source: Consultant estimation based to INDOCOMMERCIAL data
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C.
Proposed Location Based on database held by regional government, proposed suitable land for pineapple plantation are available in the following District: Table 6-3. Proposed available land for pineapple plantation
District Kapuas Pulang Pisau Barito Selatan Current Area (ha) 824 150 31 Proposed Location (ha) 38,000 15,000 16,910
Source: Various sources in local governement
Those available area are mostly located in KPP/KPPL area in each district.
D.
Market Opportunity International Society for Horticulture Science (ISHS) reported that total world imports of pineapple products were approaching to US$ 1.7 billions, distributed as follows: US$ 720.3 millions of fresh fruits,US$613 millions of canned fruits, US$ 245.54 millions of simple Juice, and US$ 83.5 millions of concentrated juice. World imported of fresh pineapple has grown at an annual rate of 6.28% from 1990 to 2002, similar trend also occurred for canned pineapple. These figures showed that pineapple is still considered an attractive fruit on international market. Major canned pineapple production in Indonesia (90%) is oriented to response the export market demand in United States, Europe and Asia. Recently, the global major importing countries were USA, Germany and Japan. United States was the largest importer and continues to occupy the same position even now. Japan has increased its share significantly, Germany has almost maintained the same share but the demand of UK has declined. Every country demanding a different taste of canned pineapple, from a sweet juice to a natural bitter flavor Beside the existing major export destination countries as regular market for export, there are also new emerging markets although the requested volume is still low, such as Australia, Korea, and Argentina and many other Eastern European Countries. In year 2002 Indonesia produces about 0.55 million tons of pineapple, included as the sixth biggest fruit production in Indonesia. The fresh pineapple production of Indonesia is presented in the following table:
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Table 6-4.
Year 2000 2001 2002 2003
Production and Export of Indonesian Fresh Pineapple

Export (Ton) 2,977 2,020 3,734
4,238
Area Harvested Volume (Ton) (ha) 6,994 393,299 7,960 494,968 9,034 555,588 10,253 623,647
Import (Ton) 16 4 1 1
Source:Statistic of Agriculture(2003)
In Indonesia, fruit consumption is about 111.1 gram/person/day. In the future,, international consumption of fresh fruit is projected to increase as more countries consumes pineapple. With better national economic condition and improved health life style, national consumption will also increase. Table 6-5. Production and consumption of Indonesian Canned Pineapple
Year
2000 2001 2002 2003
Production (tons) 186,852 193,178 210,976 226,486
Export (tons) 131,690 135,807 149,830 159,817
Import (tons) 94 85 47 31
Consumption (Ton) 55,256 57,456 61,193 66,700
Source: FAO and PCII calculation
E.
Infrastructure A better condition of road infrastructure linked the above prioritized districts to provincial capital city, only Barito Selatan still has poor road access to Palangkaraya. However Barito Selatan has good road access to South Kalimantan (Banjarmasin). The road service in Kapuas is about 0.07 km/km2, Pulang Pisau 0.06 km/km2, Barito Selatan is 0.07 and Kotawringin Timur 0.08 /km2. Currently the needs of power for each district is supplied by PLN, the supply capacity of supply in Pulang Pisau is 85 KVA while Kotawaringin Timur 14,130 KVA. Major customer of PLN is household, because several big plantations provide theirown power plant using diesel or other power plants. Each district has owned local drinking water company, even though the capacity still limited and serves mainly household. Almost all Districts of Central Kalimantan Province have chemical fertilizer and insecticide kiosk at Kecamatan level, but government manages fertilizer, insecticide for estate plantation with price higher than price for smallholders. However, these materials are available at Kabupaten market. Curently, people in Central Kalimantan have their own traditional pineaplle nursery in small scale. For good quality seed of pineapple still has to be imported mainly from from Java.
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F.
Proposed Business Scale and Basic Cost Factor With good soil and plantation management, pineapple productivity can reach more than 50 ton/ha. Proposed pineapple canning and plantation in Central Kalimantan is classified as medium scale investment with 50-70 thousand ton per year of canned pineapple. To meet the requirement of 70 thousand ton of canning capacity, about 5000-6000 ha of plantation is required. Several basic cost factors are: 1. Land price/m2 .... 2. Seed per units.. 3. Pesticide per ha.. 4. Manpower - Land processing (Man Day) .. - Regional Minimum Wage . Rp Rp Rp Rp Rp 35,000,400,400,000,18,000,506,350,-
G.
Contact Person
CHIEF OF DINAS PERTANIAN TANAMAN PANGAN PROVINCE OF KALIMANTAN TENGAH JL. WILLEM AS No 5, PALANGKARAYA PHONE; 62-536-27885, FAX: 62-536-24200
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6.2. A.
Oil Palm Plantation and CPO Processing Development Production Process

Fresh Bunch Sterilization Beating machine
Residu
Fruit Pressing Rough CPO Kernel Breaking Refination Hydro Cyclone Refined CPO Fibre
Liquid Waste
Liquid Waste
Palm Kernel Shell Fuel for boiler
Waste Processing Fertilizer Thrown away
Oil palm tree (Elaeis guineensis Jacq.) is plantation crops form family of Palmae, it was commercially planted in Indonesia (crop estate) in 1911 at Tanahitam, Hulu Sumatera Utara by Schadt a Germany citizen. Palm fruits grow in bunches, termed Fresh Fruit Bunches (FFB), which yield two types of oil: crude palm oil (CPO) and palm kernel oil (PKO). One hectare of oil palm can yield approximately 20 ton FFBs. CPO is obtained from the flesh surrounding the seed after a process of cooking, mashing and pressing fruit, whereas PKO- is derived by extracting oil from the kernels. A single mature tree at its peak can generate up to 8-10 bunches a year, weighing around 20-30 kg/bunch. CPO is a versatile vegetable oil that can be used as a basic raw material for edible oil and in a variety of industrial applications. Trough refination, bleaching, deodorization proccess, it becomes a liquid product namely olein (RBD olein) and also produce solid material namely stearine (RBD stearine), a by-product of the fractionation process.
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RBD olein is used mainly in the manufacture of cooking oil and margarine in industrial frying or processed foods like potato chips, french fries, instant noodles and other snack foods. RBD stearine is primarily used to produce soaps and detergents and in the manufacture of margarine and shortenings for food. (Motilaloswal, 2004). B. Competitiveness Having tropic equatorial climate (means rainfall around 2,732 mm and temperature range between 29-32OC) and dominated soil type of red-yellow podsolic, major area of Central Kalimantan are suitable for plantation. oil palm is one of the most suitable commodity to grow on the soil and humid tropical weather of Central Kalimantan, beside it also gains a growing demand in global market. Central Kalimantan has a rapid growth of oil palm plantation. Over one decade, it was developed into the fifth largest oil palm plantation area in Indonesia. Central Kalimantan records an average of growth of palm oil plantation during the period of 2000-2004 at a number of 13.5% per year. Total number of oil palm plantation company in year 2003 is 37 companies and increase into 64 by the end of 2004. Provincial Government projected that in the next few years, the growth will continue as recently local government has allocated a large area for new plantation. Consultant estimated that area of oil palm plantation in year 2007 could reach at least 410,000 ha or increase about 15% from current area. After decentralization, local government issued location permit letter to various investors (around 163 investor) to open plantation areas in Production Development Landuse (or KPP/Kawasan Pengembangan Produksi) covered around 2,330,000 ha. In the year 2003, it was recorded that about 36% of allocated area were operated as plantation while the remaining are under authorization process or even abandoned. The area that possible for new location permit or expansion in KPP area is as following calculation: a. Area of Production Development Area (KPP) b. Location Permit issued by BPN/Regent is 114 permit: - Turned into HGU ... - Under Processing .. - Not yet operating . Sub Total . Land available for plantation ( a b ).... 2,713,426 Ha 392,986 282,544 597,826 1,855,315 849,475 Ha Ha Ha Ha Ha
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C.
Proposed Location At present, highest plantation occupancy (share of plantation area to the total district area) are in District of Barito Timur and Kotawaringin Barat. This shows that those districts has less remaining area for new plantation compared to the other districts as many of their land already occupied. Totally, based on statistical data year 2004, the area that possible for new location permit or expansion in KPP area is 849,475 ha from the total 2,713,426 ha KPP area. However if we take the issued number of location permit into account, there will be a significant number of plantation occupancy in several districts such as Kotawaringin Timur, Barito Utara, Sukamara and lamandau. The possibility of plantation expansion will be in District of Seruyan, Gunung Mas, Barito Selatan, and Katingan. Table 6-6. Projection of available area for plantation
No 1 2 3 4 District Seruyan Gunung Mas Barito Selatan Katingan Area of Sawit (L.P) 313,780 145,000 111,500 147,100 Other 18,992 49,102 35,442 10,715 Available Area (Projection) 77,228 75,998 73,808 287,185
Source: Consultant estimation based on initial information from local governement (2004)
Dominant physical condition in available land of each district can be seen in following table: Table 6-7. Physical condition of each district
No 1 2 3 4 District
Seruyan Gunung Mas Barito Selatan Katingan
Dominant Soil Type

Northern part: Red-yellow Podsolic, Middle part: Podsolic Southern Part: Organosol and Aluvial Northern part: Red-yellow Podsolic Middle part: podsolic Northern part: Red-yellow Podsolic, alluvial Middle part: Podsolic Northern part: Red-yellow Podsolic, Middle part: Podsolic Southern Part: Organosol and Aluvial Glei humus
Source: Consultant estimation based on various source(2004)
D.
Infrastructure Condition District of Katingan and Seruyan is crossed by south link road, which is national road and has been used by existing plantation business to transported CPO to the harbor. However the average length of secondary arterial and collector road still needed to be improved.
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Barito Selatan connected to Banjar Masin by national road, and in 2006 it is scheduled that a road segment from Buntok to Palangkaraya will be operated. Gunung Mas is not directly connected to national road, the inland transportation still not to good, so it should be combined with river transportation. Table 6-8. Road service in each district
No District Length of Road Average Road Service
1 2 3 4
Seruyan Gunung Mas Barito Selatan Katingan
878.6 135.68 596.8 630.0
0.05 0.02 0.07 0.04
Source: Dinas Perhubungan of Central Kalimantan
Seruyan has an access to CPO bulky terminal in Kotawaringin Barat, while Katingan has acess to CPO bulky terminal in Kotawaringin Timur. However, several CPO producer in Katingan also use river for transporting CPO during wet season. Barito Selatan and Gunung Mas located far from the seashore, nevertheless they have their own river port. Table 6-9. Port Orientation of Each District No 1 2 3 4 District Seruyan Gunung Mas Barito Selatan Katingan Name of Port Bumiharjo Bagendang Pulang Pisau Banjar Masin Bagendang Distance + 400 km + 200 km + 300 km + 650 km + 200 km
Source: Dinas Perhubungan of Central Kalimantan
Current electricity supply in each district is from PLN, it is mainly to fulfill demand of community. CPO processing which requires big electricity supply mostly requires self powerplant using steam generated plant. Oil palm fruit waste can be utilized to create steam. It has been proven that Oil palm fruit waste contain enough calory to generate electricity. Agriculture sector particularly plantation requires appropriate road capacity for carrying raw material and product. Basically, a minimum 15 tons material should be accommodated by the existing road facilites. CPO Bulk Terminal Currently, Central Kalimantan has two CPO bulky Terminals located in Bumiharjo - District of Kotawaringin Barat and in Bagendang - District of Kotawaringin Timur. These two terminals could be classified as special port, which can be built by its plantation estates with a licence from Ministry of Transportation or can also be built by Government (PT Pelindo as State Owned
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Company) based on a Memorandum of Understanding (MOU) between PT. Pelindo and Plantation Estates Entrepreneur/GPPI. The MOU is compulsory due to PT. Pelindo will take some rent out retribution or other costs to Plantation Estate Entrepreneurs. CPO bulky port in Bumiharjo, Kotawaringin Barat has been operated since October 2002. So far, 6 plantation estates have made agreement of using this bulky port in short term program. The first MOU was between PT. Pelindo III and Astra Agro Lestari Group in West Kotawaringin and Sinar Mas Group/PT. Lestari Unggul Jaya in East Kotawaringin/Seruyan. It is expected that all plantation estates in West Kotawaringin and Seruyan will make use of this CPO bulky port.
2 Tanks owned by Sinar Mas Group
2 Tanks owned by Astra Agro Lestari
Figure 6.1. CPO bulky terminal in Bumiharjo-Kotawaringin Barat While PT. Pelindo CPO Bulky port in Bagendang Village - Kotawaringin Timur still in finishing step and have not operated yet and now still on going discussion for operating this port between PT. Pelindo III and plantation estates entrepreneurs in East Kotawaringin. Besides CPO production in East Kotawaringin still limited (just 2 processing units in operation in Mentaya Hulu) and location of port more than 100 km from plantation
Figure 6.2. CPO bulky terminal in Bagendang-Kotawaringin Timur Power Supply Present power supply of electricity in Kalimantan is marginal to cover future demanding industries. The national power supply in outside of Java are use
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mainly for urban and cities. Industries like CPO mills and crumb rubber factories developed their own power supply. Presently some of CPO plantaion have their own powerplant by using palm oil waste for coal substitution. Supporting Industries Plantation development requires supporting industries in providing seeds, fertilizer including transportation facilities and other equipments. Palm oil seed are provided by research station in North Sumatera and takes time for delivery. Presently thereare no seed industry in Kalimantan. Heavy equipment renting company are available in Sampit and Pangkalan Bun, particularly for forestry exploitation and plantation preparation. Service of cargo transport is available but number of vehicle is limited. Seedling centers that have reputable sources of oil palm planting material in Indonesia are as follows: 1) Oil palm planting material of Dolok Sinumbuh; 2) Oil palm planting material of Lame; 3) Oil palm planting material of Yangambi; 4) Oil palm planting material of Bah Jambi; 5) Oil palm planting material of Marihat; 6) Oil palm planting material of Avros Almost all Kabupaten of South Kalimantan Province have chemical fertilizer and insecticide kiosk at Kecamatan level, but government manages fertilizer, insecticide for estate plantation with price higher than price for smallholders. However, these materials are available at Kabupaten market. E. Market Opportunity Global Market World CPO production in 2003 took over 28.12% of the global vegetable oil. World production was growing at 8% per year up to 2004 to fill the consumption which also grow slightly faster at 10%. Acreage of the world has been extending plantation has been growing at the fastest rate of 6.47% per year, substantially higher than its rival/competitor soybean (3.36%). Oil World forecasted a growth of 4.5% and 5% in 2007 and 2010 respectively, the demand for palm oil will continue to increase from China, India, Pakistan, Africa and Eastern Europe. The growth of CPO import shows a positive signal as in the last two years India and China increase their import with a significant number. In 2003, India is the single largest importer of CPO with the total number of import about 4,106 thousand Tons, followed by China with import number at 3,325 thousand MT and European Union Countries about 3,522 thousand Tons.
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Domestic Market CPO and PKO are used as raw material for cooking oil, oleochemical, and pharmaceutical. The domestic consumption of CPO increases as the increase of population and demand for cooking oil and oleochemical. The domestic consumption in 2004 has increased about 40% from that in year 2000, it is projected to persist growing in the future. F. Proposed Business Scale and Basic Cost Factor Due to the spatial plan, the current available area for new plantation is about 170,000 ha, besides more than 100,000 ha revoked location permit ofered to new investors. Such available land is still open for new location permit proposal. The proposed CPO processing plant is about 35-60 ton/hours. Following the regional minimum wage, labor wage is about Rp 506,360. Current labor quality in Central Kalimantan mostly unskilled or meddium skilled labor, however plantation companies can use transmigrant who has been trained in agriculture. For daily worker the wage is about Rp. 18,000 MD The standard of HGU administration is more or less 100,000/ha paid to BPN G. Contact CHIEF OF DINAS PERKEBUNAN PROVINCE OF KALIMANTAN TENGAH JL. JENDRAL SUDIRMAN No 18, PALANGKARAYA PHONE; 62-536-21363, FAX: 62-536-29162
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6.3. A.
Cooking Oil Industry Development Production Proccess

CPO
Separating Impurity
Refining
Deodorizing
There are various types of cooking oil based on its raw material and form in room temperature. Based on raw material, cooking oil has two variants that area vegetable cooking oil and animal cooking oil. Vegetable cooking oil is made from plant such as palm oil, soybean, coconut, corn, etc. While animal cooking oil is made from animal such as chicken, pork, cow, and fish. Palm cooking oil is the downstream product of CPO, the other downstream area is also chemical which appears in trade name as Ester and Amino, etc. This Ole-Chemical products requires more technology for processing. Malaysia as the main producer of CPO and PKO, and has the technology for more added value of CPO downstream products of oleo chemical and oleo food.
PFAD
PFAD
Breaking Refination
RBD Stearin
Olein
The most dominant cooking oil in Indonesia is palm cooking oil (more than 70%) which also known as palm olein, followed by coconut cooking oil. Several advantage of using oil plam cooking oil are relatively cheap price, easy to be found in market, nutrient content, and cholesterol content. B. Competitiveness As described before, cooking oil is absorbed around 70% of CPO raw material as the other 30% is further processed for soap (11%), margarine (10%) and oleo chemical (9%) according to 1999 data. Gained from attractive global consumer prices, large amount of palm oil plantations being were developing and expansive development being occurred in Kalimantan, particularly in West Kalimantan, Central Kalimantan and East Kalimantan. This development has increase the production of CPO from Kalimantan provinces for export market and national consumption. In national scale, the extension of palm oil plantation in East and West Kalimantan is included the largest compare to Sumatera provinces. Cooking oil as simple downstream industries has been developed in East Kalimantan, by the operation of 2 factories and another 2 unit factories are working in West Kalimantan which one of them owned by state plantation company.
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Table 6-10. Development of Plantation Area in Kalimantan 2000 2003

Province West Kalimantan Central Kalimantan East Kalimantan South Kalimantan Total Area (Ha) 2000 Production (ton) 266,035 352,036 74,140 32,873 68,938 68,696 93,973 37,239 503,086 490,844 Area (Ha) 2003 Production (ton) 349,101 517,090 343,323 380,851 158,786 158,231 155,668 267,658 1,006,878 1,323,830
Source: Provincse in figure (2003)
Unfortunately, most cooking oil producers are not integrated with the upstream industry and, as such, they are highly dependent on CPO producer for their operation. On the other hand, many CPO producers currently prefer to supply their output the export market. Cooking oil industries once in last decade were banned as negative list due to most of the production are oriented for export, while national stock are suffered by minimum supply. Under 1998 regulation a new export duties (PE) is implemented including Export Standard Prices (HPE) for cooking oil to safeguard national stock. Labor cost, productivities, infrastructure, port capacity and available supporting industries including transportation, storage, etc. become main component which may weaken the competitiveness of Kalimantan in developing large scale palm oil plantation. Aggressive incentive is essential to promote more investor to choose Kalimantan instead of Sumatera for establishing oil palm plantation. C. Proposed Location The location for cooking oil industry should considering infrastructure condition, labor cost and availability of appropriate land. To guarantee the continuity of raw material, transportation system to transport CPO (capacity 57 thousand liter/tank) shall be provided, other wise the investment will be risky. At present, three districts offer area for industrial estate, those are District of Kapuas, Kotawaringin Barat and Kotawaringn Timur. D. Market Opportunities Domestic consumption of cooking oil are increasing which may resulting from increase population and also increase of consumption per capita. A slight declined occurred in 1998 due to limited national cooking oil stock, which created a higher prices in retail market. Domestic consumption per capita estimated to reach 7.4 kg in year 2005 from only 6.5 kg in year 2001. World consumption of cooking oil is also increase by average 4% between 1994-1995 referring to Oil World Annual Report, 1999. The number of World Consumption in cooking oil is likely to be increase considering
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that the above data were not significantly covered consumer demand in Africa countries and East Europe. The declining of Malaysia production in CPO is mainly caused by large conversion of land utilization from plantation to industries and Malaysia has more advantage in developing higher value downstream product of CPO, oleo chemical and oleo food. This condition will open opportunities for Indonesia to develop more primary product of palm oil (CPO) and establish a more simple downstream product of cooking oil, margarine and shortening. E. Infrastructure Kotawaringin Barat, Kotawaringin Timur and Kapuas have better transportation infrastructure compared to other districts. They are crossed by national road and have direct access to seaport. Several supporting business such as heavy equipment renting, banking, hotel and health facility, have been developed there. Kotawaringin Barat has electricity supply about 7,100 KVA with peak load 5,600 KVA, while Kotawaringin Timur has 14,000 KVA electricity supply with 8,500 KVA peak load. Kapuas has electricity from powerplant in South Kalimantan. River port has been developed well in Sampit (Kotawaringin Timur) with 1500 2000 DWT, while Kotawaringin Barat has a seaport in Kumai with 1500-2000 DWT. Kapuas has river port with 1500-2000 DWT. E. Project Component Average capacity of proposed cooking oil factory is ranging from 10-30 ton CPO/hour, If assumed that the factory will operate in 10 ton/hour, so the requirement of CPO in one year is: 10 ton x 24 hour x 26 day x 12 month = 74.880 ton per one machine unit If assumed that the factory will operate in 30 ton/hour, so the requirement of CPO in one year is: 30 ton x 24 hour x 26 day x 12 month = 224.640 ton per one machine unit. Cooking oil from 1 (one ) industrial unit is: Capacity 10 ton : (75/100) x 74.880 ton CPO = 56.160 ton/cooking oil/year. Capacity 30 ton : (75/100) x 224.640 ton CPO = 168.480 ton/cooking oil/year E. Contact CHIEF OF DINAS PERINDUSTRIAN PROVINCE OF KALIMANTAN TENGAH JL. YOS SUDARSO No. 82/X PALANGKARYA PHONE; 62-536-29959, FAX: 62-536-29819
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6.4. A.
Rubber Processing and Nursery Development General Product Feature Rubber tree (Hevea brasiliensis) is a tropical tree, which was taken from the Amazon to South Asia (Sri Lanka) and South East Asia (Singapore and Malaysia) by the British Colonial Office where it was grown experimentally and later on plantations (see history). Subsequently, cultivation spread to what was then Indochina (Vietnam and Cambodia), the Dutch East Indies (Indonesia) and Thailand, and subsequently to Africa (Liberia, Nigeria, Cote d'Ivoire). At present, rubber is used as raw material for many developing industries, mainly tire industry. It is estimeted that more than 70% of world natural rubber production consumed by tire industry. In the future, rubber demand will be increase since the industry activities arose along with the increasingly people population number and needs, while the synthetic rubber can not always replace the nature and role of natural rubber. The largest proportion of Indonesian rubber production by type are Technically Specified Rubber (TSR) which holds about 95% of total product, followed by Ribbed Smoked Sheets (RSS) which holds 2%, Latex Concentrate 0.7%, and the others product 2.3%. The major grades of TSR is SIR 20 which is derived from smallholder coagula, while the major grades of RSS is RSS 1.
B.
Competitiveness Indonesia is the second biggest producer of natural rubber after Thailand, rubber plantation spread in two third of provinces in Indonesia. In 2003, national natural rubber production is 1,79 million ton which was indicated grew into 2 million ton in 2004. The natural rubber came from around 3,3 million hectares of plantation in more than 20 provinces. Having tropic equatorial climate (means rainfall around 2,732 mm and temperature range between 29-32OC) and dominated soil type of red-yellow podsolic, major area of Central Kalimantan are suitable for rubbr plantation. On the other hand, Minister of Agriculture (2004) said that around 80% of current rubber plantation in Indonesia is owned by smallholder with old rubber trees (around 20 years old). Those old rubber trees has caused a low productivitiy of rubber plantation, therefore, governement has been paid attention to the rejuvenation program of rubber trees in rubber plantation. Rejuvenation of old rubber is needed in Central Kalimantan as the province has about 9% of the rubber plantation in Central Kalimantan which is old (41,467.50 hectares). Rejuvenation shall be combined with local farming culture such as planting seasonal food crops (ginger, corn, or other commodities) between the juvenil ruber trees. This traditional system can be conducted only in several years until rubber trees grow and their canopy cover the soil surfaces. The potential
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districts to do these activities are Barito Timur, Gunung Mas, Kapuas, Pulang Pisau dan Barito Utara The competitor of rubber seedling business is private or state own rubber planting material producers that have been establishing in North Sumatra and South Sumatra. However, the recommended rubber clones for West Kalimantan, East Kalimantan, and Central Kalimantan are almost the similar the rubber agro climate while the South Kalimantan is similar to South Sulawesi, Central Sulawesi, Papua. Rubber clones that produce in Central Kalimantan will have advantage in market area to South Sulawesi, Central Sulawesi, and Papua province therefore the competitiveness of rubber planting materials that produce in South Kalimantan has wide area of market region. By 2004, the total number of plantation areas in Central Kalimantan is 807,254 hectares, of which 357,345 hectares or about 47% is for rubber plantation area. From the rubber area there is 349,152 Ha is for local estates (98%) and 5,464 Ha (2%) is for large estates. Thus the local estates has important role over the creation of the size area of Central Kalimantan estates and size area of rubber estates as the one of prime products. C. Market Opportunity The Central Kalimantan has wide market area and also has many clone variety that suit for the Central Kalimantan Province. The main market should be the replanting smallholders rubber. If the new investors could establish the rubber seedling nursery business in Central Kalimantan the expected market is existing rubber planting 163,514 Ha or equivalent to seedling materials of 40,878,500. This is sufficient market for a nursery business. Also, any prospect in Papua province. Competitiveness of proposed Central Kalimantan rubber seedling nursery the distance more competitive against the Sumatra seedling for eastern part market. The rubber trees in the areas of plantation in Central Kalimantan cover 357,345 Hectares of which damage or old rubber trees cover 41,467.50 Hectares. By using this figure, it is estimated the number of old rubber woods can achieve 8,211,836.07 cubic meters. This is based on assumption of one Hectares is equal to 360 logs and one cubic meter of rubber wood is equal to 1.181 bars of logs. In 2004 the natural rubber production exceed the consumption at 70,000 ton, and in 2003 the oversupply was 190,000 ton. The oversupply not happened to natural rubber but also happened to synthetic rubber. The possibility will happen in near future just with market oriented of buyers. Traditional market of Indonesian rubber is Japan, USA, and Singapore and new market could be China, which has about 300 tire producers of 4,000 rubber-processing enterprises.
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Currently China is a major exporter of tires, based on International trade data indicates that China exported nearly 111 million tires. In addition the Japan largest tire maker, Bridgestone, has established tire factory in China that commencement in 2004 with production level 8,000 tires a day. Thailand is the major natural rubber supplier to China. According to International Rubber Study Group, China market in 2020 is accounted at 4 million ton of projected market demand 11.5 million ton of natural rubber. Table 6-11. Position of Natural and Synthetic Rubber in The World
Description 2002 Natural Rubber (in 1000 ton) Production 7440 Consumption 7500 Balance -60 Synthetic Rubber (in 1000 ton) Production 10930 Consumption 10730 Balance 200 2003 8060 7870 190 11350 11220 130 %Change 8.3 4.9 2004 8250 8180 70 11870 11550 320 20120 19730 390 %Change 2.4 3.9
3.8 4.6
4.6 2.9
Natural + Synthetic rubber (in 1000 ton) Production 18370 19410 Consumption 18230 19090 Balance 140 320
5.7 4.7
3.7 3.4
Table 6.11 indicates the rubber consumption trend increasing by 3.9% and production by 2.4%, while the synthetic rubber consumption increasing by 2.9% and production increasing by 4.6%. However, by increasing the price of natural gas and oil the synthetic rubber will has constraint in expanding the production. However, the natural rubber will compete with synthetic rubber, currently the synthetic rubber has oversupply at 320,000 ton. In 2020 nearly 10-11 million ton of natural rubber would be required by the world, of this projection Chinese market accounting for 4 million ton. Study Group estimates the world production of natural rubber to reach a maximum of 89 million ton, inferring a shortfall of approximately 2-3 million ton. Indonesian rubber should take action in anticipating the world demand and more realistic for Indonesian natural rubber to fulfill the Chinese market. However currently the Thailand rubber supply the Chinese market at 80% Chinese requirement and this market share decreasing to about 70% at the expense of Vietnam, Malaysia, etc. Consultant opinion that in coming soon the China will diversify its suppliers to accommodate the business risk, at this moment Indonesian should penetrate the Chinese market actively. In penetrating the Chinese market the International Tripartite Rubber Council (ITRC) should be strengthen their cooperation so the rubber price could be managed at reason level.
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D.
Potential Location Several location for rubber nursery development are: 1. Kotawaringin Timur 2. Gunung Mas 3. Barito Selatan Those area are counted as current centre of smallholder rubber plantation. While for rubber processing, proposed location are Kotawaringn Barat and Kapuas. Kotawaingni Barat is projected to catch the current smallholder product in Kotawaringn Barat, Sukamara and Lamandau, while Kapuas is projected to catch the product of Pulang Pisau, Barito Selatan, and Gunung Mas.
E.
Infrastructure and Business Support Facilities Kotawaringin Timur have relatively better transportation infrastructure compared to other districts. It is crossed by national road and can have direct access to seaport. Several supporting business such as heavy equipment renting, banking, hotel and health facility, have been developed there. Barito Selatan connected to Banjarmasin by national road, and in 2006 it is scheduled that a road segment from Buntok to Palangkaraya will be operated. Gunung Mas is not directly connected to national road, the inland transportation still not to good, so it should be combined with river transportation. Electricity Kotawaringin Timur has 14,000 KVA electricity supply with 8,500 KVA peak load. Gunung Mas has 1,813 KVA electricity supply with 1,391 KVA peak load. Harbor/Seaport River has been developed well in Sampit (Kotawaringin Timur) with 1500 - 2000 DWT, while Kotawaringin Barat has a seaport in Kumai with 1500-2000 DWT. Kapuas has river port with 1500-2000 DWT. Barito Selatan and Gunung Mas located far from the seashore, nevertheless they have their own river port.
F.
Proposed Business Scale The main Component soft this business are: 1. 100 Ha of Parent Stock Scion Trees, this should be selected and breed in carefully and its security should be set early as possible. However, this component will take time to be selecting and breeding. 2. Laboratory of nursery, 0.3 Ha 3. Green House for manage the seedling while in polybag stage, 10 Ha
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4. Experiment Field about 150 Ha 5. Station and staff housing compound, 3 Ha 6. Equipments and transportation means. Rubber Tarding Business Unit: 1. Storage, with capacity 50 ton of rubber 2. Processing Units, with capacity 20 ton per day 3. Trucks and water transportation vehicle. Considering the current infrastructure condition and rubber demand, proposed rubber processing industri in initial step is medium scale industry with installed capacity about 10,000 ton/year for SIR. For RSS industry, proposed scale of business is about 1,500 ton per year. G. Contact
CHIEF OF DINAS PERKEBUNAN PROPINSI KALIMANTAN TENGAH JL. JENDRAL SUDIRMAN No 18, PALANGKARAYA
PHONE; 62-536-21363, FAX: 62-536-29162
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6.5. A.
Rattan Processing Industry Production Process

Raw Material (Rattan)
Intermediate Goods (W&S, Split, Rough Polish)
Semi-finish Goods (Smooth Polish, Peal, Core, Weaving)
Rattan Industries: 1. Cutting as the design size 2. Shaping and molding 3. Tying and Screwing 4. Smoothing/drying 5. Painting/Varnishing 6. Drying
Export Market
Domestic Market
Rattan is a crawler palm tree, which found mostly in tropical rain forest in Asia and Africa. Rattan has high economic value. This is concerning its specific characteristic of elastic, flexible, strong and similar form, so that it is very suitable for furniture industry and various handicraft products. Kalimantan island has the highest of rattan diversity as it has about 100 species of rattan which more than 50 species is commercial species. Sumatera has about 75 species, Sulawesi has 25 species, and Java has 25 species. B. Competitiveness Indonesia is the biggest rattan producer in the world, as it produces about 80% of world rattan supply followed by China, Vietnam and Philippines. Business opportunity for various rattan products can be seen through increase of production volume and export. In current economic situation, when purchasing capacity of community decrease, export market shall be important choice. Rattan has high economic value, this is concerning its specific characteristic of elastic, flexible,
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strong and simmilar form, therefore it is very suitable for furniture industry and various handicraft products. Rattan product also has high local content and less dependency on imported raw material. Raw material for rattan can be obtained from cultivated rattan besides natural rattan. Rattan industry can also absorb manpower so that this industry will bring good effect to regional economic as well as to sustaibnable natural resources mangement. Almost all of rattan cultivation is managed by local/traditional people, the skill and knowledge about rattan cultivation has been transferred traditionally from old generation to the next generation. In the next five years, the production is projected to be increase as the Government of Indonesia issued export ban policy for natural rattan in year 2003, while the area of rattan cultivation is expanded. There is still significant volume of Indonesian raw rattan for export because the available finished rattan product (Furniture) are not suffice the customer demand. Technologiy and design are the major challenge for Indonesia as the largest raw rattan producer to be able its finished rattan product entering world market. Ministry of Forestry reported that average of annual capacity of rattan production both for natural and cultivated reachs 696,000 ton, originated mainly from Kalimantan and Sulawesi Island. Share of cultivated rattan to the national rattan rattan production is about 40% or about 278,400 ton/year Table 6-12. Annual sustainable rattan harvesting in Indonesia Regions Sumatera Kalimantan Sulawesi Nusa Tenggara Total
Production (ton) 106,900 193,000 361,000 36,000 696,000
% 15.3 27.7 51.8 5.2
C.
Market Opportunity It is important to know that rattan products especially furniture is nearly the same to fashion product which has elastic market, eventhough the global economic is weak but the rattan furniture trading reltively stabil or even increase. From international furniture data, currently rattan furniture only takes 2% of total furniture trading, this proportion still much less than of wood furniture or metal furniture trading. Considering the shortage of raw wood materials in many countries, in the future market oportunities of rattan product is promising as long as it can accommodate the design trend and consumer prefference.
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The average export growth of Indonesain Rattan product indicates a signficant increase at 8.60% per year. The main export destination of Indonesia rattan furniture product are Europe countries, it is about 47% of total rattan furniture product. Table 6-13. Indonesian export of rattan furniture by country of destination
Importer Countries United States Europa Japan Australia Others Total
Export Volume (ton) 2001 17,883,464 52,002,451 18,530,114 3,702,309 23,826,448 115,944,786 2002 21,960,864 59,030,355 17,585,515 4,783,293 52,854,735 133,386,540 2003 18,304,100 64,068,455 18,170,509 5,248,978 31,095,605 136,887,641
Growth 1.17 11.08 -0.98 19.07 14.24 8.66
Table 6-14. Competitor Country of Rattan Export , in 2000 Country Indonesia Malaysia Philipines Laos Vietnam Bangladesh China Thailand Nigeria Forest Area (million Ha) 103.6 15.3 6.5 12.4 8.3 0.7 99.5 11.1 13.6 Rattan Production (1000 on/year) 696 21.7 97 0.1 144 87 6 180
Note: - = data not available D. Proposed Location Considering the existence of raw rattan production, proposed location for rattan industries is in District of Kapuas and District of Kotawaringin Timur. District of Kapuas is closer to Banjarmasin where many supporting Industries are exist, while Kotawaringin Timur is closer to the main supplier of raw rattan in Central Kalimantan. E. Infrastructure Kotawaringin Timur has relatively better infrastructure compared to the other districts. Besides enough electricity, and water supply. It has many supporting business such as banking, health. However, several important raw material must
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be imported such as: paint, glue, leather, spon, which consist of 30% of furniture raw material. F. Proposed Business Scale and Basic Cost Factor Proposed business scale is medium size industry, with capacity about 400-500 ton per years. The required raw material will be 600 700 ton per year G. Contact
CHIEF OF DINAS PERINDUSTRIAN PROVINCE OF KALIMANTAN TENGAH JL. YOS SUDARSO No. 82/X PALANGKARYA
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6.6. A.
Pulp and Paper Production Proccess The pulp and paper industry converts wood or recycled fiber into pulp and primary forms of paper. Other companies in the paper and allied products industry use the products of the pulp and paper industry to manufacture specialized products including paperboard boxes, writing paper, and sanitary paper. Processes in the manufacture of paper and paperboard can, in general terms, be split into three steps: pulp making, pulp processing, and paper/paperboard production. Paperboard sheets are thicker than paper sheets; paperboard is thicker than 0.3 mm. In general, however, paper and paperboard production processes are identical. Pulp and paper production requires several major inputs such as basic raw materials (wood/bamboo chips, sawdust, used paper, etc), water, and chemical material (sodium sulide, hypochlorite, chlorine dioxide, additives, etc.) Considering the maximum production capacity of pulp industry in 2003 which reachs 5 million ton (APKI, 2003), it seems raw material supply from existing pulp-base timber estate is still small. It seems the current pulp and paper industry is still highly dependent on wood from natural forests.
B.
Competitiveness Indonesian pulp started slowly before 1990, before timber were ready for yield. In 1993, the total capacity of pulp industry was 1.33 million ton per annum (APKI, 2003), but in 1997 the annual capacity shot up to 4.23 million tons. Despite the economic crisis in 1998, the national capacity grew further in 1999 to 4.54 million tons, mean while the other industries which relying on imported raw material have remained in doldrums. The crisis which made value of rupiah sink, has made pulp and paper industry more competitive on the export market The pulp industry production capacity as recorded year 2000 to reach a total figure of 4.9 million ton compare to year 2000 output production 4.6 millions. Indicated that maximum capacity utilization (92%) is achieved. Kalimantan provides larger allocation areas for HTI development compare to other islands as particular investment attractiveness. In the same time large number of pulp related timber estate has been ready for harvesting in East Kalimantan, West Kalimantan and Central Kalimantan, provide large raw supply for pulp and paper industry. The weaknesses are low capacity of all season transport infrastructures and ineffective industrial support (transportation, trade and business service). More investment incentive will be required to compensate the weakness and make
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Kalimantan more competitive not only for pulp related timber estate but also pulp and paper industry.. Table 6-15. Profile of Indonesian Pulp and Paper Industry in 2003
Status and Location (2003)
No. of Mills
3 65 12 80 10 3 67 64 14 2 80 1998
Installed Capacity (ton per annum)

Pulp 240,000 3,322,100 2,725,000 6,287,100
5,072,100 1,215,000 340,500 5,382,000 564,600 6,287,100 1999 9,097,180 4,543,600
- State owned - Domestic Private Investment - Foreign Private Investment Total - Integrated (pulp and paper) - Pulp - Paper - Java - Sumatera - Kalimantan Total Installed capacity (ton/annum) - Paper - Pulp
Source: APKI (2003)
Paper Pulp 337,000 3.8 % 5,041,180 52.8 % 4,666,500 43.3 % 10,045,580

2,517,000 7,528,580 8,554,440 1,491,140 10,045,580 2000 9,116,180 5,228,100 80.7 % 19.3 % 5.4 % 85.6 % 9.0 % 2001 9,904,080 5,587,100
Paper 3.4 % 50.2 % 46.5 %

25.1 % 74.9 % 85.2 % 14.8 % 2002 10,065,580 6,087,100
7,479,530 4,323,600
Abundant supply of raw materials and low labor wages were two most important factors in the past lured many investors into Indonesia pulp and paper. Before the crisis BKPM approved numerous new investment and expansion projects. However, following the outbreak of crisis all the project are rescheduled due to high dependency to foreign borrowing as pulp industry is highly capital intensive projects. C. Market Opportunities International Market In recent years, world pulp production and consumption shown a fluctuation, the highest production occurred in year 2000 before it declined in 2001 and had a slight increase in 2002 and 2003. Total wood pulp production in 2003 was about 167.7 million tons. The top producer country was USA, which has about 53.5 Million tons of pulp production, while at the same time, they also become the largest pulp consumer which consumed about 54.5 million tons in yer 2003. PricewarterhouseCooper (2004) reported that demand of pulp and paper products is closely linked to trends in gross domestic products (GDP). Most western nations reported low GDP growth rates in 2003. GDP growth and consequently demand was much stronger in emerging market, with China posting a 9.1%
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increase, India 7.6% and Russia 7.3%. as growth in those nations continues to outpace western antions, thei influences to global supply and demmand equation will increase. Table 6-16. Major Producer Countries of Wood Pulp
Country 2000 Production USA Canada Finland Sweden Japan Others Total Consumption USA Canada Japan China Finland Others Total
*) Preliminary Source: FAO (2003) and PCI
Volume (000 tons) 2001 2002 53,680 25,110 11,168 11,028 10,792 165,744 165,744 54,752 14,071 13,374 9,857 9,656 166,362 53,569 25,744 11,729 11,382 10,668 167,633 167,633 54,470 14,205 13,047 10,175 9,762 168,400
2003 52,355 26,200 12,012 11,441 10,451 168,333 168,333 54,400 14,280 13,100 10,277 9,855 168,700
57,831 26,696 12,009 11,545 11,373 171,476 171,476 58,611 15,090 14,333 7,680 10,472 171,181
Table 6-17. Major Producer Countries of Paper and Paperboard

Country 2000 Producer: USA Canada China Japan Germany Finland Sweden Others Total Consumer: USA China Japan Germany U.K Italy France Others Total
Source: FAO (2003)
Volume (000 tons) 2001 2002 81,438 19,834 37,929 30,717 17,879 12,502 10,534 109,597 320,430 88,606 44,130 30,938 18,544 12,316 10,983 10,926 106,455 322,898 81,792 20,226 37,929 30,686 18,526 12,776 10,724 111,690 324,349 89,507 44,322 31,826 18,807 12,218 11,727 10,930 104,887 324,224
2003 81,600 20,156 38,050 30,620 18,852 13,021 11,121 117,416 330,836 89,400 45,100 31,930 18,851 12,350 11,822 10,960 110,295 220,413
86,545 20,921 35,439 31,828 18,182 13,509 10,786 106,636 323,846 93,685 42,266 31,860 19,087 11,496 11,273 11,394 103,654 324,715
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National Market Despite the economic crisis in 1997 and issue of natural raw material shortage, Indonesian pulp production continued to show good performance. In 1997, the production was 3.06 million tons, up to 4.67 million tons in 2001 and in 5.1 million in 2003. PT. Riau Andalan Pulp and Paper and PT. Indah Kiat are the two biggest pulp producer, in 2003, their share to the national pulp production are 38.6% and 22.6% respectively. Indonesia pulp and paper industry still has opportunities to grow due to abundance supplies of basic materials as large number of HTI ready for harvest in the future. Geoposition of Kalimantan is another advantages particularly its proximity to Asian country as dominant consumer. Table 6-18. National Pulp Consumption and Import
Year Consumption (000ton) Import Volume (000ton)
1997 1998 1999 2000 2001 2002 2003

Source: APKI
2,815 2,613 3,472 3,529 3,531 3,550 3,790
943 839 957 769 564 826 840
As the increase of population and economic condition, estimated Pulp consumption in 2010 is as follows: Table 6-19. National Pulp Consumption Projection
Year Consumption (000ton) Estimated Population
Source: PCII Estimation
2003 3,790 219,888
2004 3,914 222,624
2005 4,041 225,339
2007 4,304 230,703
2010 4,724 238,576
In line with pulp production graphic, totally, national production of paper also has continued to increase. Data Consult (2003), analyzed that the increase was a result of the rupiah fall or the soaring of the US dollar against rupaih. Producer was boosted to increase production because of good sales export market. The previous economic crisis has influenced the domestic consumption of paper, mainly industrial paper to a slow growth between period 1997 2000. In the contrary consumption for culture paper and other paper were declined because closely related with the slide down of purchasing capacity. The national paper consumption year 2000 is diversified into 76% industrial paper, 20% culture paper
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and 4% as other paper product. Where the demand for domestic consumption considerably equal with export market. Table 6-20. Paper and Paperboard Consumption Import
Year 1997 1998 1999 2000 2001 2002 2003 Consumption (000 ton) 3,283 2,783 3,914 4,224 4,806 5,016 5,104 Import
(000ton) Consumption per capita (kg/capita)
261 130 144 213 200 250 254
16.9 14.1 19.6 20.8 23.3 24.0 26.0
Source: APKI , 2003
Data Consult (2004) predicted that the demand for paper will continue to pick up in the next four years. The demmand for tissue paper will grow 5% annualy, industrial paper 8%, cultural paper 17.6% and cigarette paper by 0.7%- altogether by about 11% annualy on the average. Table 6-21. Paper Consumption Projection Type of product 2004*)
Cigarette paper Industrial Paper Cultural Paper Tissue Paper Total 28.6 3,911 1,290 130 5,361
Volume ( 000 tons) 2005*P 2007*P

30.0 4,224 1,549 143 5,947 33.1 4,927 2,231 174 7,365
2010*P
36.2 5,800 2,941 202 8,979
Source : Data Consult and PCII calculation
D.
Potential Location Considering the existance of suitable land and infrastructure support, proposed location for pulp and paper is in District of Kotawaringin Barat, Kotawaringin Timur and District of Kapuas. District of Kapuas is closer to Banjarmasin where many supporting Industries are easier, while Kotawaringin Barat and Kotawarinign Timur to the location of proposed timber estate.
E.
Infrastructure Transportation Kotawaringin Barat and Kotawaringin Timur have relatively better transportation infrastructure compared to other districts. They are crossed by national road and can have direct access to seaport.
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Several supporting business such as heavy equipment renting, banking, hotel and health facility, have been developed there. Kotawaringin Barat has electricity supply about 7,100 KVA with peak load 5,600 KVA, while Kotawaringin Timur has 14,000 KVA electricity supply with 8,500 KVA peak load. F. Proposed Business Scale and Basic Cost Factor The proposed business scale is industry with capacity of 500,000 tons of pulp. To meet the raw material demand, it will be required about 3,000,000m3 of wood which required about 180,000 ha of timber estate area. G. Contact
CHIEF OF DINAS PERINDUSTRIAN PROVINCE OF KALIMANTAN TENGAH JL. YOS USDARSO No. 82/X PALANGKARYA PHONE; 62-536-29959, FAX: 62-536-29819
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6.7 A.
Particle Board Industry Production Proccess
Particle board is categorized as wood panel product. In general, it is defined as a structural material made of wood fragments or fiber, that are mechanically pressed into sheet form and bonded together with resin. Particle board, is made by binding wood particles ranging in size from flakes to sawdust together with a suitable adhesive, such as a plastic resin, and pressing or extruding them to form sheets. Particle board is used as a cheaper substitute for plywood in some applications; but even though it has a higher density, it is less resistant to puncture and the effects of weather. When properly veneered it is suitable for making furniture. In its raw form it makes an excellent subflooring for dry locations. Generally, particle board processing comprises six major steps such as: preparation, gluing, mat forming, pressing, sanding and stacking, and packing. In preparation step, raw materials (mainly wood waste) are turned into chips using drum chipper rotary, later those chips are processed to produce flakes and then they are dried up. The flakes are processed again to create particles, smaller particles are separated from the bigger ones. Smaller particles are used for outer part of particle board while the bigger are glued together using urea formaldehyde (UF). B. Competitiveness Particle-board is not included in any list of negative investment for PMA, PMDN or non-facility. The government will help this investment because their industry is environment friendly. Import commodity is still charged with an import tax of 5% and PPN 10%.
VI- 32
Budget and labor productivity, infrastructure and industrial infrastructure (transportation) are main indicators, which are now being the main concern of regional to be deeloped in next years to overcome the weakness in competitiveness of Central Kalimantan and West Kalimantan when comparing with Sumatera or East Kalimantan. Table 6-22. Major Producer of Particle Board/MDF in Indonesia Name of Companies Particle Board/MDF
PT. Daya Besar Agung Corp. PT. Rimba Partikel Indonesia PT. Adinaco Serasi PT. Kartika Kapuas Sari PT. Rimba Windy Indah PT. Parindo Permai PT. Novopan Indotama PT. Perawang Lumber Industry PT. Limbah Kayu Utama PT. Partikalindo Lestari PT. Mangole Timber Production Others Total East Kalimantan Central Java West Kalimantan West Kalimantan West Kalimantan Lampung West Kalimantan Riau Jambi West Kalimantan North Maluku PMDN PMA PMDN PMDN PMDN PMDN PMDN PMDN PMDN PMDN PMDN 225,000 150,000 135,000 136,000 120,000 108,000 100,000 90,000 75,000 60,000 60,000 341,000 2,050,000
Location
Status
Prod. Capacity (m3/annum)
Every industrial unit has a production capacity of 60,000225,000 m3 per year. Particle-board Industries can utilize the waste of plywood or blackboard productions and hence are generally owned by groups which produce plywood (77%). Particle-board production is declining due to reduction plywood production. Table 6-23. National Particle Board Production Year 1996 1997 1998 1999 2000 2001 2002 2003
Source: PCII data
Production Capacity (000 m3) 1,400 1,400 1,400 1,400 1,450 1,500 1,550 1,700
Production (000 m3) 1,223 1,193 715 869 856 953 953 1,050
Ratio 87 85 51 62 59 64 61 62
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C.
Market Opportunity Based on data from FAO, world particle board production shown an increase in recent years. The production in year 2003 before is about 152 million tons or increased 33% from year 1998. As a forestry product, demand of panel board products is closely linked to trends in gross domestic products (GDP) and population, doestic as well as export demand in particle-board industry is relatively flat and coherent with settlement development and office. Even-though product performance is relatively declining due to shortage of raw material (there is a relationship with the declination of plywood production), but the market demand is not significantly declining, therefore particle-board industry prospective is still positive or promising. Considering the global economic condition, world consumption of particle board shown a fluctuation and has a decrease in 2001 for about 1.2% from the previous years. However, the general trends is increase as in year 2003 the consumption is about 151,786 or about 39% from it in 1998. The major producer of particle board is 2003 is USA with share about 18% to the total production, followed by Germany, China and Canada with each share about 11%, 10% and 10% respectively. However, most those countries also have high consumption of particle board, which meant they are also potential market for particle board product. Table 6-24 Gap of production and consumption in major countries*)
Country USA Canada China Germany France Italy Poland Russia Spain UK Other Total Production (000 m3) 27,979 14,751 14,697 16,852 5,835 5,303 6,163 4,089 5,747 3,725 46,843 151,983 Total Consumption (000 m3) 44,154 4,955 19,460 12,103 4,280 5,403 5,558 4,569 5,551 6,355 39,399 151,786 Gap of Production and consumption -16,175 9,796 -4,763 4,749 1,555 -101 605 -480 196 -2,630 7,444 197
In addition to domestic consumption, particle board from Indonesia is exported, even many producers say that export market is their major segment which brought higher benefit rather than domestic market. The low domestic consumption which caused by economic crisis has stimulated export of particle board product. Major destination of Indonesian export is Taiwan (+ 30%), Hongkong (+19%), and Korea (+ 14%).
VI- 34
Table 6-25 Indonesian Export Volume of three kinds of Particle Board Years Production
1998 1999 2000 2001 2002 2003
Volume (000 m3) Particle Board Fiber Board

540 251 241 159 171 180 114 268 277 285 302 320
MDF
71 160 158 148 191 200
Total
725 679 676 592 664 700
D.
Potential Location Considering the infrastructure and labor condition, suitable location for this commodity is in District of Kotawaringin Barat, Kotawarinigin Timur and Kapuas.
D.
Infrastructure Kotawaringin Barat and Kotawaringin Timur have relatively better transportation infrastructure compared to other districts. They are crossed by national road and can have direct access to seaport. Several supporting business such as heavy equipment renting, banking, hotel and health facility, have been developed there. Seaport has been developed well both in Sampit (Kotawaringin Timur) with 1500 - 2000 DWT and Kumai (Kotawaringin Barat) with 1500-2000 DWT. Kotawaringin Barat has electricity supply about 7,100 KVA with peak load 5,600 KVA, while Kotawaringin Timur has 14,000 KVA electricity supply with 8,500 KVA peak load.
D.
Proposed Business Scale and Basic Cost Factor Proposed business scale is medium capacity of particle board industry for about 100,000-150,000 tons per year. Following the regional minimum wage, labor wage for industrial is about Rp 506,360. Current labor quality in Central Kalimantan mostly unskilled or meddium skilled labor, however plantation companies can use transmigrant who has been trained in agriculture. For daily worker the wage is about Rp. 18,000 MD. Land price in industrial area of Kotawaringin Barat and Timur range between 250,000 500,000 per m2.
D.
Contact CHIEF OF DINAS PERINDUSTRIAN PROVINCE OF KALIMANTAN TENGAH JL. YOS SUDARSO No. 82/X PALANGKARYA; PHONE; 62-536-29959,
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6.8. Nature Tourism of Tanjung Puting A. Main Project Issues Tanjung Puting was gazetted as National Park on lowland area of 415,000 Ha in South coastal Central Kalimantan. It has a unique fauna and flora reserve as a secure habitat of endangered Orang Utan. This park was also the first place in Indonesia o become a rehabilitation center for orangutan. There are now three orang utan rehabilitation loaction: Tanjung Harapan, Pondok Tanggui, and famous rehabilitation camp in Camp Leakey. Indonesia has another rehabilitation center of Orang Utan in Bahorok North Sumatera, but available protected habitat area (Lauser National Park) is smaller compare to Tanjung Puting due high land utilization pressure. UNESCO has declared Tanjung Puting National Park as a Biosphere Reserve, and it is also a sister park to Taman Negara Malaysia under a cooperation agreement between Indonesia and Malaysia The other recognized accessible National Parks in Indonesia are Ujung Kulon as the only habitat of Java Rhino, Way Kambas as the reserve of Elephant and Sumatera Rhino, Komodo island as the protected habitat of Komodo and Bunaken island as marine biotic conservation. Market Opportunities Indonesia as prominent tourism destination in Asia suffered from decreasing tourist visit volume after monetary crisis 1996 and continue to second fall after World Trade Center bombing 2001 and Bali bombing 2002. Number of tourist visit are slowly increase, but still big gap to reach the peak tourism record in 1996. Tanjung Putting destination is a specific market segment with particular consumer demand. Although regular tourism attraction (in leisure and recreation) is not a competitive supplies to ecotourism, the ecotourism facilities in many countries has improve it concept to accommodate more leisure interest without any degradation to environment quality of the region. More peoples are tolerated to visit national park as long as managed under the minimum disturbance to the environment. A better quality and more educated visitor will lead to an increasing income for maintenance and operation and keeping a more sustainable environment of the Park, this specific tourism segment has much better resistance to global economic impact compare to regular tourism. Considering that major competitiveness of Indonesia tourism are still oriented to its nature and culture, the tourism projection in the future will continue increasing particularly to the specific segment which are: ecotourism and marine tourism (diving and surfing).
VI- 36
The foreign visitor to Tanjung Puting National Parks are dominated by Tourist from North America, United Kingdom and other Europe and lower percentage are gained by visitor from Australia, New Zealand and Japan and Asia. The length of stay of tourist visit either from foreign or domestic are ranging between 2 to 5 days. Tanjung Puting National Park has difficulties in providing operation and maintenance of the park with a smaller number of tourist visit and short visiting days. Cooperation with private sector will be fruitful to improve the National Park attractiveness without scarifying ecological condition. B. Potential Location Based on Governement Regulation no 34 year 2002, Tanjung Putting is divided into three zones which are: Core zone Core zone is protected ans has a very limited utilization. Several permitted utilization are: research and development for science, education, selected activities to support cultivation. Forest zone Forest zone is surrounding the core zone in national park which has high environemental value or unique ecosystem. Forest zone has a wider utilization permit. Several permitted utilization in forest zone are: limited tourism/ecotourism, research and development for utilization, education and selected activities to support cultivation. Utilization zone Utilization zone should has enough area to secure the sustainability of nature and ecotourism potencies. The environment of utilization zone should condusive for ecotourism development. Several permitted utilization in forest zone are: tourism/ecotourism, research and development for utilization, education and selected activities to support cultivation. Based on the above mentioned regulation, proposed investment for toursim facility development will be located in forest zone and utilization zone. The current utilization zone Potency is along the Sekonyer River and also Along the path towards Camp Leakey which occupy less than 10% of the area of Tanjung Puting. In the future, a further inventory and mapping shall be made to open the proper and environemt friendly access to the attractive sites. C. Infrastructure Tanjung Puting National Park is accessible by air from Jakarta, Jogya and Semarang to Pangkalan Bun, Central Kalimantan. Access to the Park is available by river transport from Kumai 15 km westward Pangkalan Bun around one hour travel.
VI- 37
Air transporation from Jakarta/Semarang to Pangkalan Bun available in regular schedule that is 3 times in a week. From Pangkalan Bun to national park, daily transportation is available using long boat. D. Proposed Business Tanjung Putting National Park offers a unique potency of ecotourism development. The prominent icon to be developed is wildlife watch adventure by using various tracking facilities. Besides orangutan, several other intersting wildlife species to be watched are bekantan (Nasalis larvatus), maroon leaf monkey (Presbytis rubicunda rubida), and various species of birds. The park also offers beautiful sight of lowland tropical rainforest with mysterious wetland ecosystem. Trekking adventure shall be completed by river canoing to see the black swamp ecsystem and having a rest in appropriate lodge. Present attraction and tourist interest of Tanjung Putting located in development zone which are : - Tanjung Harapan as information center - Camp Leakey as Orang Utan Rehabilitation Center - Pondok Tangui and Natai Lengkuas Additional complimentary attractiveness to the present National Parks facilities will raise the visiting of the tourist and increasing the length of stay in the park and surrounding destination. Several potential for private sector investment: Ecotourism: - beach attraction and marine wildlife if possible (snorkeling, diving) - living (staying) in wildlife with good accommodation (Boathouse/Raft house) - improvement of tracking routes by combination of ground tracking, elevated board walking, watching stations, canoeing, etc. - river cruising to Danau Burung (Bird lake) Other potential business for National Park information center: - souvenir and handicraft - theater and live wildlife show - Small simulation - Facilities such as: Telecommunication, safety, trasnportation, hotel, etc. E. Contact
BALAI TAMAN NASIONAL TANJUNG PUTING PROVINCE OF KALIMANTAN TENGAH JL. HM. RAFII KM 2, KOTAWARINGIN BARAT
PHONE; 62-532-238832
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BKPM

INVESTMENT COORDINATING BOARD (BKPM) JAPAN INTERNATIONAL COOPERATION AGENCY

PT. PACIFIC CONSULINDO INTERNATIONAL INDONESIA (formerly PT.Mitrapacific Consulindo International)

P.T Pacific Consulindo International Indonesia (PCII

P.T Pacific Consulindo International Indonesia (PCII

P.T Pacific Consulindo International Indonesia (PCII

P.T Pacific Consulindo International Indonesia (PCII

P.T Pacific Consulindo International Indonesia (PCII

P.T Pacific Consulindo International Indonesia (PCII

P.T Pacific Consulindo International Indonesia (PCII

P.T Pacific Consulindo International Indonesia (PCII

Bappeda of Central Kalimantan

Figure 1-1 Altitude range of Central Kalimantan Province

P.T Pacific Consulindo International Indonesia (PCII)

(%) 18.22 9.69 13.32 42.18 1.75 13.06 1.78 100.00

Source: Agency of Plantation of Central Kalimantan Province (2003)

Source : Statistics Office of Central Kalimantan Province (2003)

P.T Pacific Consulindo International Indonesia (PCII)

Source: Bappeda of Central Kalimantan Province (2003 )

P.T Pacific Consulindo International Indonesia (PCII)

The map of the districts is presented in Figure 1-2.

P.T Pacific Consulindo International Indonesia (PCII)

Figure 1-2. Boundary of district/kota in Central Kalimantan

P.T Pacific Consulindo International Indonesia (PCII)

2000 1.50 2.20 12.13 24.68 -3.09 3.21 5.33

2001 2.72 5.92 0.56 20,05 -5.33 -9.86 2.28

2002 3.27 1.98 6.39 24.21 1.15 0.32 6.14

2003 4.86 2.64 8.01 19.64 5.75 1.96 3.63

P.T Pacific Consulindo International Indonesia (PCII)

2000 2,076.78 64.78 607.53 1,690.87 55.24 1,236.38 1,514.80 4,095.78

2001 2199.65 70.89 729.36 1,486.15 115.65 1,143.60 1,541.41 4,203.92

2002 2,413.15 73.04 1,055.95 1,516.26 38.25 1,096.15 1,161.07 4,341.38

2003 2,302.45 81.46 1,083.91 1,589.63 20.59 1,169.67 1,695.51 4,552.23

Production (billion rupiah)

P.T Pacific Consulindo International Indonesia (PCII)

Source : BPS Central Kaimantan Province (2003)

Growth 2.44% 3.08% 4.19% 5.52%

Source : BPS Indonesia (2003)

Sources: BPS of Central Kalimantan (2003) and calculated by consultant,:

P.T Pacific Consulindo International Indonesia (PCII)

Source : BPS Central Kaimantan Province (2003)

Figure 1-3. Population of Central Kalimantan Province by Age

Ages -150 150

P.T Pacific Consulindo International Indonesia (PCII)

Source : BPS Central Kaimantan Province (2003)

Minimum Wage (Rp)

Source: Dinas Tenaga Kerja of Central Kalimantan (2003)

P.T Pacific Consulindo International Indonesia (PCII)

P.T Pacific Consulindo International Indonesia (PCII)

Figure 1-4. Barito Regional Economic Inter Relation

P.T Pacific Consulindo International Indonesia (PCII)

Saw Wood 6.42

Export Value (US$)

Import Value (US$)

Bappeda of Central Kalimantan Province (2003)

P.T Pacific Consulindo International Indonesia (PCII)

Value (million rupiah) 2001

Source: Bappeda of Central Kalimantan Province (2003)

P.T Pacific Consulindo International Indonesia (PCII)

P.T Pacific Consulindo International Indonesia (PCII)

Figure 1-7. Map of industrial location in Central Kalimantan (Mining)

P.T Pacific Consulindo International Indonesia (PCII)