Indonesia's Agrinas Adds Vast Plantation Areas, Plans Dozens More Mills

Indonesia handed over 674,178 hectares (1.7 million acres) of palm oil plantations to state-owned Agrinas Palma Nusantara on Friday, taking the total land granted to the company to 1.5 million hectares (3.7 million acres).

The transfer cements Agrinas's position as the world's largest palm oil company by land area. A government task force said Agrinas now has the capacity to produce 5.7 million tonnes of crude palm oil (CPO) a year.

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However, without giving details, director Zulhem Syachvan Koto told reporters that the company aims to begin expanding its palm oil processing capacity to lift output, which currently still falls short of that potential.

"We currently have 17 mills. But given this large land area, we plan to build dozens more in the future. More will be added next year," Zulhem said.

He added that production would be used for the government's cheap cooking oil programme in the short term, and for bioenergy in the longer term.

He noted that some of the areas handed over to Agrinas are in a degraded state, and the company is working to restore them to their natural condition.

Indonesia has launched a crackdown on illegal use of forest land, targeting plantations and mining areas, with the government also announcing on Friday the seizure of parts of two mining zones.

Febrie Adriansyah, a senior prosecutor at the Attorney General's Office, said a further 1.8 million hectares seized from illegal operators by a government task force are currently being verified before being handed over to Agrinas at a later stage.

Febrie added that companies whose land has been seized will also face fines, which authorities will soon begin calculating and collecting.

"These fines are essentially for the illicit profits gained while state land was being used unlawfully. So the profits must be returned," said Febrie, a task force member, adding that the government will retain control of the land after penalties are imposed.