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Perhutani Plans to Invest $2.8 Million To Grow Resin Derivatives Production
Arti Ekawati | November 09, 2009

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State-owned forestry company PT Perum Perhutani is planning to invest Rp 26 billion ($2.8 million) to build a factory to process oil pine resin into more valuable derivatives. Perhutani is hoping that this will triple the division’s earnings by 2011.

President director Upik Rosalina Wasrin said the investment in resin derivatives was expected to drive a boom in Perhutani profits within three years.

“We expect to double or even triple our income from turpentine and gum resin derivatives,” Upik said in an interview on Monday in Jakarta.

The factory, to be constructed in West Java, was expected to start its commercial operations in mid-2010. It is expected to be operating at full capacity in 2011, she said without providing further details.

Perhutani has thus far only been able to produce oil palm resin into two basic forms, turpentine and gum resin, which are mostly exported to the US.

Gum resin is an important raw material for the paper, paint and pharmaceutical industries. Turpentine is a component of antiseptic, perfume and camphor.

In 2008, Perhutani earned Rp 800 billion from turning over 55,000 tons of turpentine and gum resin.

This contributed about 25 percent to Perhutani’s total income last year, with the rest coming from the sale of its wood-based products, such as unprocessed timber and plywood.

In 2011, the company is expecting to gain about Rp 2.4 trillion in profit from derivatives.