Jakarta, December 01, 2023 – Holding Perkebunan Nusantara PTPN III (Persero) today, Friday, (01/12/2023), announced the merger of 13 (thirteen) companies under Holding Perkebunan Nusantara, into two Sub Holding, namely PalmCo and SupportingCo.
PalmCo Subholding was formed through the merger of PT Perkebunan Nusantara (PTPN) V, VI and XIII into PTPN IV as the surviving entity and the impure separation of PTPN III (Persero) into PTPN IV. Meanwhile, Subholding SupportingCo was formed through the merger of PTPN II, VII, VIII, IX, X, XI, XII, and XIV into PTPN I. The establishment of PalmCo and SupportingCo is an implementation of the National Strategic Program (PSN) which aims to realize self-reliance, especially in the field of food security and energy. The integration of PTPN Group is also a form of company support in strengthening economic resilience for quality and equitable growth through downstreaming the food sector, developing regions to reduce inequality and ensure equity through People’s Palm Rejuvenation (PSR). In addition, it also builds the environment, increases disaster resilience, and climate change through accelerating the development of renewable energy.
PalmCo is expected to become the world’s largest palm oil company in terms of land area, reaching more than 600 thousand hectares by 2026, and will become a major player in the world palm oil industry. Thus, PTPN is believed to be able to contribute to increasing national CPO production and domestic cooking oil. PTPN estimates that its cooking oil production will increase from 460,000 tons/year in 2021 to 1.8 million tons/year (4 times) in 2026. Meanwhile, SupportingCo will become a Superior Plantation Asset Management Company, which includes plantation asset utilization activities through asset optimization and divestment, plantation crop management, other business diversification, and green business that can provide added value to the company. Deputy Minister of SOEs, Kartika Wirjoatmodjo, in her direction said that the PTPN Group merger is one of the schemes run by the Ministry of SOEs. One of the goals is to increase efficiency and improve various financial and operational indicators of the company.”Of course, after this signing there will be system integration, HR, operations, finance, and so on, which we try to complete within six months. And after that we must return to focus on our respective tasks,” said Tiko.
Tiko further said that the corporate action carried out by PTPN Group is a comprehensive transformation, including transformation in terms of people. He emphasized that in the future, employees, especially millennials, could become reliable players to manage palm oil companies. “So I want the transformation from the people side to be really visible.How this transformation can make PalmCo the leading palm oil company, not only from the on-farm, but also off-farm to be able to do downstream, value creation, including sustainable renewable energy,” Tiko said. Tiko said that the challenge that often arises in the merger of a company is related to the integration of human resources. However, this is not an obstacle in PTPN Group because it has the support of the labor union.”I hope that this cohesiveness must be maintained so that there will be no turmoil that disrupts the company’s performance, where PalmCo will focus on increasing the downstream of palm oil products.Furthermore, for the energy sector such as biogas, biodiesel sustainable efficient fuel, and other products will also be the company’s concern,” said Deputy Minister of SOEs, Kartika Wirjoatmodjo.
President Director of PTPN III (Persero) Holding Perkebunan Nusantara Muhammad Abdul Ghani, said that the corporate action of restructuring the formation of Subholding PalmCo and SupportingCo, following the formation of SugarCo in 2021, is an effort to continue to grow and contribute optimally. “The integration of PTPN Group through the formation of PalmCo and SupportingCo is a concrete manifestation of corporate strategy to face increasingly fierce global competition.This integration strengthens the company’s position because it has competitive and comparative advantages, where the company is supported by superior utilization of land resources, human resources, technological innovation, and digitalization,” Ghani said.
The Subholding’s strategy to achieve these big goals includes maximizing the value of landbank assets to get added value, increasing EBITDA margins in the next 5 years, improving ESG and food security, increasing equity, and improving leadership. “And of course a stronger business focus,” Ghani added.As one of the efforts in achieving equity improvement, Ghani said, ESG initiatives become one of the important indicators in protecting the company’s value.Therefore, PTPN Group is committed and continues to strive to implement the principles of sustainability within the scope of Environment, Social, and Governance (ESG) in all its business operations.
As in the Sustainalytics report, an international ESG rating agency published in early July 2023, PTPN III (Persero) received an ESG Risk Rating of 17.1 (low risk), which puts the company at low risk regarding the significant financial impact of ESG factors.
Ghani said that the transformation carried out by PTPN Group over the past three years, which has a significant impact on improving operational and financial performance, cannot be separated from the ESG initiatives implemented.”In carrying out all of its business and operational activities, the Company always ensures that the products produced not only have an economic impact, but also have an impact on social and environment,” he concluded.