Palm Oil Plantation Business in Indonesia

Fall, Garden, Leaf, Fruit, Food, Palm

Palm Oil Plantations are a really lucrative agricultural business for agriculture entrepreneurs and companies to put money into. The potential in this company makes palm oil one of the most significant revenue streams in Indonesia. Following the President of Indonesia Mr. Joko Widodo (Jokowi) imposed a moratorium on the property available for plantations, the value of palm oil plantations has increased dramatically.

The process of acquisition or take over of plantations, particularly oil palm plantations, isn’t as simple as imagined.

Considering that transactions in the property industry, especially the take-over of oil palm plantations, contain very high capital company and involve many parties as mediators, the authorities in this case the Minister of Trade of the Republic of Indonesia believes the need to make rules to protect the rights and duties of the parties involved through the Minister of Trade Legislation of the Republic of Indonesia no. 33 / M-DAG / PER / 8/2008 regarding Brokerage Company of Property Trade.

However, though there are regulations governing trade transactions, it’s not uncommon for a transaction to be too convoluted and less cooperative between mediators, so the take-over process actually becomes unsuccessful or completely void.

Listed below are steps to acquire a palm oil plantation in Indonesia

First, get in touch with a reliable brokerage firm and ask if they have palm oil plantations to sell. Do not contact individual brokers as they may not have the complete detail on particular plantations, and generally they aren’t clear with the actual relation to the available plantation. Such cases often occur in Indonesia and you need to make certain that the plantations have no legal issues.

Second, ask the brokerage firm to perform the due diligence so you avoid future legal problems in Indonesia. A trusted brokerage firm should have qualified survey tools like drone mapping and a trusted agronomist / business analyst team.

Third, make sure the selling price of this plantation is fair. Almost all individual brokers markup the original price around 30%. You should be careful in doing business with these kinds of individual brokers because of this type of lack of transparency. In this case you want to appoint a trusted agent to represent you at the take-over procedure. A typical commission fee of 1-3percent ought to be anticipated from the farm selling facet.

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