INTRODUCTION Design And Optimization Of Agro-Scm For Food And Energy Security In Indonesia
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Palm oil is the most traded vegetable oil crop in the world. Palm oil used in a vast range of everyday products and traditionally used in manufactured food products, it is an increasingly
important ingredient in cosmetic health products, and is now found in 50 of packaged supermarket products. Palm oil is also the most productive vegetable oil, producing around 10
times more oil per ha than its nearest competitor soybean, and there is a growing demand for its use in bio-diesel and electricity production. PWC, 2013. Worldwide demand for palm oil has
skyrocketed over the past 25 years, and oil palm plantations now cover an area of 11 million hectares. Global demand for palm oil is therefore expected to continue to grow strongly. Indeed,
the World Bank forecasts that an additional 6.3 million ha of palm oil plantations will be required to meet global demands by 2020. Much of this land is expected to be in Indonesia which, together
with Malaysia, already accounts for around 90 of the world’s palm oil exports. In Indonesia, the area covered by oil palm plantations has reached almost 6 million hectares with the production is
the biggest in the world. During the last decade, the palm oil industry in Indonesia has been developing rapidly, and has close to doubled in size 4.2million ha in 2000 increased to 8.0
million ha in 2010.
In Indonesia, oil palm plantations have been progressively developed since 1980s. The palm oil industry in Sumatra and Kalimantan islands has gown rapidly since 1980, and yet it has not
transformed itself into to a strong agribusiness system Pahan, 2012. Agribusiness system was an approach which integrated raw material purchasing upstream agro-industry, the activity of
primary production on farm, manufacturing process downstream agro-industry, marketing, and supporting institutions such as financing, land agency, research and development within one
system. Oil palm plantation produces raw material in the form of fresh fruit bunches FFB that were processed in the palm oil mill to become semi-goods namely crude palm oil CPO and
palm kernel oil PKO. Semi-goods are further processed to become finished goods edible and non-edible at downstream manufacturing industry to give financial added value. Palm oil
export’s contribution to Indonesia economy in the year 2010 was USD 16.4 billions.
The oil palms mostly are planted in Sumatra, with recent expansions move into forested parts of Riau, Jambi, and South Sumatra, as well as into West Kalimantan and South Sulawesi. Most
oil palm plantations are owned by Indonesian interests, although by 2002, there were over 600,000 ha of private estates owned by foreign and largely Malaysian companies. Colin, 2003
Figure 1 :
Tree Crop Estate Statistics 2009-2011 for Oil Palm
Source : Directorate General of Estates
Over the past 10 years total global edible oil demand has increased at a rate of 5.5 million tons per annum 6.25 percent, while palm oil demand on its own has grown by 2.5 million tons
or at 9.5 percent annually. The escalating increase in worldwide demand for palm oil has largely been satisfied in recent years through equally rapid growth in the world’s two largest producing
nations, Indonesia and Malaysia. USDA, 2010
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Figure 2: Global Palm Oil Demand 1970-2010 and Avg. Increase in Production
Source :USDA 2010
A significant change in the palm oil industry has taken place during the past season, as Indonesia surpassed Malaysia in the production of palm oil to become the current world leader.
Indonesia is the biggest CPO producer in the world, accounting for 47 percent of world production. The countries produced 18 million tons of CPO from 7.9 million hectares of
plantations in 2008, and produced 22 million tons in 2009 and produced 23.6 million tons in 2010. Malaysia, currently the second-biggest CPO producer, may see its production from 17.7
million tons in 2009 to 18.2 millions in year 2010.
Figure 3 : Indonesian and Malaysia Palm Oil Production
Source: USDA, 2012 The Indonesian palm oil Industry has grown very fast and significantly recently. By 2007,
planted area and production had increased to 23 and 24.5 times compared to their level in 1980 respectively, and planted area’s growth rate on average 11 from 1980 to 2007, while the
production growth on average is 13 per annum. Seventy percent of palm oil production in Indonesia is exported. As a result, the export market contributes important role in the growth of
the palm oil industry. By 2007, palm oil export had increased to 23.6 times compare to its level in 1980, with an average growth rate of 28 in terms of quantity and 27 in terms of value
annually. James, 2007 1.2. Agro-SCM
There have been major changes in the agro supply chain of energy and food products over the last decades. A more liberalized international trade system, globalization and the transition
towards a consumer driven market have empowered this development Such outstanding demand growth of palm oil does not come without a price, however. The
intricate web of modern supply chains means that palm oil-growing countries are increasingly
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involved in, and affected by, global issues such as food security driven by increased food demand from growing and more prosperous populations and energy security driven by the
impacts of the global financial crisis, oil price volatility, and over dependency on fossil fuel It will require both an increase in yields and more plantations. Much of the required land should be
taken from existing stocks of degraded land, but if this is poorly planned andor ill-managed, it could have serious consequences for the environmental and social capital of the country.
Supply chain is a typical complex, adaptive, and dynamic system with nonlinearities, delays, and networked feedback loops. So it is very difficult for supply chain professionals to clearly
understand supply chain operational mechanisms and thus make appropriate decisions within the limited time to adapt to the ever-changing, competitive, and turbulent business environment.