Wednesday, 02 July 2025 | 18:13
Bisnis.com, JAKARTA – The Indonesian Chamber of Commerce and Industry (Kadin) has again urged the government to immediately implement a plan to remove export levies (PE) or export duties on whole coconuts to minimize the domestic raw material crisis.
Kadin Deputy Chairman for Industry, Saleh Husin, stated that his office has received several complaints from industries using whole coconuts who are struggling to find raw materials domestically.
"I have previously proposed increasing the export duty on whole coconuts so that raw materials for the domestic industry can be readily available. I don't know if this has been done yet. Last I heard, it's still difficult to obtain raw materials," Saleh said at the Indef National Seminar on Wednesday (July 2, 2025).
He lamented the lack of industrial downstreaming in this sector. Exports have so far only consisted of raw materials, rather than finished products from processed whole coconuts, which could provide greater added value.
As a result, domestic industries are struggling to find raw materials. In fact, several industries have implemented production efficiency measures due to the whole coconut crisis.
"One producer, Kara, for example, is a coconut producer that has finally reduced production due to a lack of raw materials," he said.
Ironically, the largest producer of whole coconuts, currently located in Sumatra, is unable to meet the needs of consumer industries producing in surrounding areas, from Riau to Jambi.
"This must be anticipated so that we gain added value by downstreaming domestically rather than selling raw," he said.
The Indonesian Coconut Processing Industry Association (HIPKI) revealed that the raw material crisis for whole coconuts has hit the processing industry, resulting in factory closures and mass layoffs.
Head of the Various Coconut Product Industry Division of HIPKI, Dippos Naloanro, said the raw material crisis has been occurring since the beginning of the second semester of 2024. In fact, currently, production utilization at integrated factories is only around 20%-30%.
"Many coconut-based MSMEs have closed. 80% of coconut shell charcoal makers have collapsed," Dippos told Bisnis some time ago.
He explained that the processing industry normally requires at least 2-3 billion coconuts per year. However, this demand has been eroded, weakening factory productivity due to reduced material availability.
Large coconut processing manufacturers, such as the Sambu Group, have laid off more than 1,000 workers this year. However, he could not disclose the full data, as not all companies are willing to disclose it.