By Bernadette Christina
JAKARTA (Reuters) – Indonesia handed over 674,178 hectares (1.7 million acres) of palm oil plantations to state firm Agrinas Palma Nusantara on Friday, taking to 1.5 million hectares (3.7 million acres) the total area of land given to the company.
The handover solidifies Agrinas’ status as the world’s largest palm oil company by land size. A government task force said Agrinas now has the potential to produce 5.7 million metric tons of crude palm oil annually.
The company aims to start expanding its palm oil processing capacity to augment output that now falls short of that potential, however, Director Zulham Syakwan Koto told reporters, without giving details.
“We currently have 17 mills,” Zulham said. “However, with such a large area, we plan to have dozens more in the future. More will be added next year.”
The output will be used for the government’s cheap cooking oil programme in the short term and for bioenergy in the longer term, he added.
Some areas handed over to Agrinas are in damaged condition and it is working to return them to normal, he said.
Indonesia has cracked down on the illegal use of forest, targeting plantations and mining areas, with the government also announcing on Friday the seizure of parts of two mining areas.
Another 1.8 million hectares seized from illegal operators by a government task force are also being verified prior to their handover to Agrinas later, said Febrie Adriansyah, a senior prosecutor with the office of the attorney general.
The companies whose land has been seized will also face fines that authorities will soon start calculating and collecting, Febrie added.
“These fines are basically for the illegal gains amassed while the state lands were used illegally. So the profit must be returned,” said Febrie, a member of the task force, adding that the government would keep control of the land after the penalties.
(Reporting by Bernadette Christina Munthe; Writing by Fransiska Nangoy; Editing by David Stanway and Clarence Fernandez)
