"God willing, we will have a new regulation early next year to develop the downstream agro industry particularly related to palm oil, cacao and rubber," Industry Minister MS Hidayat said in Bandung, West Java, on Saturday.
He said the new regulation would gradually reduce the export of raw materials such as crude palm oil, cacao and rubber.
The government would provide incentives to companies supplying raw materials to the domestic industry while at the same time imposing tax on the export of raw materials, he said.
"We will gradually develop domestic downstream industry (to process the raw materials) by inviting local and foreign investors," he said.
It was not easy to develop downstream agro industry because it required a sizable amount of funds and therefore, the government would provide incentives to investors engaged in the downstream agro industry, he said.
"There has been an agreement (among government agencies on the matter). We will just harmonize decisions in a meeting at the Coordinating Ministry for Economic
Affairs. I hope the coordinating minister for economic affairs or the finance minister will announce it (the regulation) early in January 2011," he said.
Indonesia is the world`s largest CPO producer with output estimated at 20 million tons per year. However, 70 percent of its CPO is exported and only 30 percent of it is used to meet domestic industry.
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