Ministry Offers Indonesia's Forests for Investment

The Jakarta Globe, Arti Ekawati

The Ministry of Forestry is offering 44.3 million hectares of forest for industrial development and hopes to bring in more than Rp 1.6 trillion ($170 million) in revenue.

Hadi Daryanto, the director general of forest production at the ministry, said the forest areas will be available between 2010 and 2014. Developers will be able to use the land for plantations, logging or eco-tourism.

“Information about the areas can be seen on the ministry’s official Web site if investors are interested in developing the forest area,” Hadi said.

There are about 150 million hectares of forest across the country, with 36.8 million hectares earmarked for industrial use.

In 2008, the government received Rp 2.5 trillion of non-tax revenue from forest concessionaires and other companies in the forestry sector. In 2009, the government only targeted Rp 2.3 trillion because of the economic crisis.

Hadi added that investment in the forestry sector has a bright future, especially as it can help to reduce carbon emissions. He cited South Korea’s plan to build a wood-chip factory in Central Kalimantan. These chips can be used as a raw material for producing paper or as a substitute for coal.

South Korea is trying to replace 5 percent of its coal consumption with wood chips. The South Koreans are searching for overseas sites where they can plant the acacia other eucalyptus trees that are needed to make these chips.

South Korean Ambassador Kim Ho-young said Indonesia is a good place to start investing in the forestry sector. He encouraged cooperation between South Korean and Indonesian companies in planting trees.

“If South Korean and Indonesian companies work well together, this will become a good model for companies from other countries to invest in Indonesia,” Kim said.

Forestry Minister Zulkifli Hasan plans to plant one billion trees starting next year to help reduce carbon emissions by 26 percent by 2020.

The minister has launched a program called “one man, one tree”, which encourages citizens to plant at least one tree during their lifetime.

“However, aiming to reduce emissions, the president asked me to increase the amount of trees into one billion trees to be planted in one year starting 2010,” Zulkifli said. The trees are expected to be planted in one million hectares of dry land across the country.

The ministry will also a launch monitoring, reporting and verification system, using a satellite data system, to supervise the planting of trees during the program.

The monitoring program will cost Rp 15,000 per hectare.