Oil And Fat Manufacturing In Indonesia Industry Report and Market Research
Oil And Fat Manufacturing In Indonesia Industry Report and Market Research
By Gerry Henry
DEFINITION
Processing both vegetable and animal products to become oil which can be sold as a food product in its own right, or can be sold as an ingredient for further processing in other food products. Usually this product is used by other food manufacturing industries. The industry also includes establishments engaged in the manufacturing of edible fat products, from both vegetable and animal sources, like: coconut oil, palm oil, palm oil kernel oil, sunflower oil, fish oil, pork oil/fat, cow fat and bird fat.
ACTIVITIES
The primary activities of firms in this industry are :
- Manufacturing and processing of pig fat and fats of bovine animals (sheep or goats).
- Manufacturing and processing of fish-liver oils and cod liver oils.
- Manufacturing and processing of fats, oils and fractions of fish and marine mammals.
- Manufacturing and processing of Soya-bean oil and its fractions, crude oil, and olive oils.
- Manufacturing and processing of palm oil and its fractions, whether refined or not.
- Manufacturing and processing of coconut oils, palm kernel or babassu oils.
- Manufacturing and processing of seed oils, maize / corn oils, castor oils, and tongue oils.
- Manufacturing and processing of sesame oils and margarine.
INDUSTRY OUTLOOK
Turnover of Oil and Fat Manufacturing in Indonesia is expected to increase with reasons including:
Improvement in the general level of the economy.
Increasing export volume.
Increasing supply from upstream industries, as Indonesia is expected to be the largest producers of CPO in the world.
Growth of downstream industries, which will ensure continues demand.
In line with the increasing demand for cooking oil from households, restaurants, and other food industries, it is expected that demand for these industry products will increase. Exports are also expected to increase, as supply from upstream industries is expected to increase especially for palm oil based products. In addition, improved regulations are required to support distribution system, as products of this industry are considered as one of the basic commodities in the country.
The potential of foreign markets, especially the United States, is expected to improve, as the heightened concern around the world over trans-fatty acids (TFA) and the January 2006 U.S. Food and Drug Administration requirement that food labels include information about TFA, is expected to increase demand for palm oil to replace partially hydrogenated oils in American processed foods. As a result, increasing exports to the U.S.A. CPO serves as a biofuel, and methyl esters (derived from palm olein) can mix with diesel fuel to make biodiesel. Given the current prices for oil and gas, demand will grow for alternative energy sources and, in particular, for biofuels.
In the near years, the prices of palm oil and coconut oil are expected to remain high, as international oil prices tend to increase. Government is expected to have a certain regulation so that the domestic prices stable and lower around Rp.5,000 to Rp.5,500 per kg.
Gerry Henry. Industry Analyst. Dataindo Inti Swakarsa, PT. Web: http://www.disb2b.com
The most comprehensive Indonesia Business Directory and Industry reports website
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