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Indonesia might become biofuel industrial leader in the Asia-Pacific region press release

PRESS RELEASE

4 June 2007

Jatropha curcas may help make Indonesia a global biofuel leader

Jatropha oil, also known as castor oil, is being touted in Indonesia as an alternative source of fuel to overcome the country’s energy crisis. A study conducted by Spire Research and Consulting has revealed that more than 23 million hectares of uncultivated land in Indonesia can be used to cultivate jatropha curcas for biodiesel development, leading to potentially 18 billion kg of biodiesel.

In the face of depleting oil reserves and fluctuating world oil prices, Indonesia has launched an intensive biofuel production program which includes the cultivation of cassava, oil palm, sugar cane and especially jatropha.

Indonesia may be one of the first countries in the world to commercially use biofuel produced from jatropha, a non-edible oil-bearing crop which can be grown on marginal land. Already, the nation is planning to increase its biofuel crop production 43 fold to meet projected world biodiesel demand, consequently opening up 20 million more hectares (ha) to crop production.

Generally, 2,500 plants will be grown in 1 ha of jatropha curcas plantation. 1 ha of jatropha curcas trees can normally produce 4,500 kilograms (kg) of seeds, from which experiments have shown that 1,500 kg of biodiesel can be made. With over 23 million ha of potential land (pls see Appendix, Table 1), this amounts to more than 18 billion kg of biodiesel oil to meet demands. Indonesia has been receiving dozens of new proposals to develop biofuels plantations since the beginning of the year, including one involving a Chinese state-owned offshore oil corporation, estimated to be worth US$5.5 billion.

Kanematsu Corporation from Japan, to cite another example, has plans to invest US$25 million to establish a 100,000 litre capacity ethanol plant. On the home front, Wilmar plantation, PT Bakrie, and PT Eterindo are the leading players in this industry. PT Bakrie, for instance, has already built a biodiesel plant in Batam which has a capacity of 100,000 ton/year. At present, there are 200 gas stations in Jakarta alone which sell biodiesel and another 15 operating gas stations as well in Surabaya. 

The Indonesian Department of Industry is currently responsible for managing four biofuel plants with 6000 ton capacity per year. US$33 million was earmarked for this project which is expected to operate at the end of 2007. The government hopes that biofuels will supply 10% of Indonesia’s transport and electricity fuel needs by 2010. 

The characteristics of Jatropha are comparable with those of rapeseed oil, therefore jatropha oil is highly suitable as fuel for diesel engines. Palm oil, on the other hand, is not fluid at room temperature. Using palm oil in car engines would require substantial modifications. In addition, jatropha is better-suited to marginal, dry soils, another advantage over the sustainability of palm oil production. Maturity is quicker as well and yields can be reaped beginning from the third year of cultivation.

About Spire Research and Consulting
Spire Research and Consulting is Asia’s leading strategic market intelligence consultancy. Spire’s competitive advantage lies in its ability to deliver to its clients actionable intelligence on the external business environment in support of their strategic decision-making in marketing and business development. Spire is one of the few companies in its industry to be headquartered in Asia. Spire’s clients include over 20 Fortune 500 organizations as well as Government agencies in nine countries. For more information, visit us at www.spireresearch.com.

For media enquiries, please contact:
Deborah Lee
Spire Research and Consulting
Phone: (65) 6327 6131 
E-mail: deborah.lee@spireresearch.com

Ronald Wong
Fleishman Hillard

Phone: (65) 6424 6386
Email: wongr@fleishman.com

William Chia
Fleishman Hillard

Phone: (65) 6424 6387
Email: chiaw@fleishman.com

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