N. Sumatra to produce palm bio-diesel

Palm oil producing companies PT Musim Mas and PP Lonsum had agreed to develop technology which will aid in the production of "palm bio-diesel" in North Sumatra with the aim of establishing Indonesia as a major alternative fuel producer, The Jakarta Post reported on Saturday.

The agreement was reached at the end of an international workshop on bio-diesel in Medan, North Sumatra, from Oct. 2 to Oct. 4, Derom Bangun, head of the Indonesian Palm Oil Producers' Association, said in Medan on Friday.

Bangun said that to build a plant with the capacity to process 100 tons of crude palm oil (CPO) into usable fuel requires an investment of about US$20 million.

"Both PT Musim Mas and PP Lonsum will provide the investment money on a 50-50 basis," he said.

He explained that total palm oil plantation areas in Indonesia had already reached 3.5 million hectares in 2000 and could be expanded to cover 10 million hectares.

Indonesia's CPO production reached 7.2 million tons per year in 2000, of which 4.1 million was exported. (*)