The Indonesian government is actively promoting the industrial downstreaming program, particularly in the agro-business sector such as palm oil. This commodity has an export value reaching hundreds of trillions of rupiah. According to Putu Juli Ardika, Director General of Agro Industry at the Ministry of Industry, palm oil has successfully implemented the industrial downstreaming program. Over the past decade, the number of downstream palm oil products has significantly increased from 45 types to over 200. Palm oil has become a model for industrial downstreaming, producing a variety of derivative products, including food (oleofood), non-food (oleochemical), renewable fuel (biofuel), and environmentally friendly materials (biomaterials) on a sustainable industrial scale. The economic growth from the upstream-downstream palm oil sector further demonstrates the success of the industrial downstreaming program. In 2023, the export value of palm oil and its derivatives reached IDR 450 trillion, contributing 11.6% of total non-oil and gas exports, with the total business value reaching IDR 800 trillion. The sector has also created 16.2 million jobs, including indirect employment involving smallholder farmers.
Recognizing the sector's vast potential, Putu emphasized continuous support for innovation in palm oil processing technology, from upstream plantations to downstream processing industries. The Ministry of Industry (Kemenperin) facilitates technological development through pro-innovation policies and collaboration among relevant parties for the commercialization of new innovations. One notable success is the multi-party consortium research on edible-coating technology based on palm oil, which extends the shelf life of tropical fruits. Supported by Kemenperin, this research aligns industry needs with research innovations and is currently undergoing food-grade certification for commercialization. To further modernize technology and encourage research activities, Kemenperin has undertaken strategic efforts such as machinery and equipment restructuring programs and establishing the Indonesia Manufacturing Center (IMC) to support research collaboration. Kemenperin is open to utilizing the IMC to facilitate the commercialization of research outcomes and encourages palm oil processing companies to establish research centers in Indonesia.
