Tuesday, 08 September 2026
SIMALUNGUN | INDATANEWS.COM - The North Sumatra Provincial Government is pushing for the continued development of PT Unilever Oleochemical Indonesia's (UOI) Fatty Alcohol production activities in the Sei Mangkei Special Economic Zone (SEZ) in Simalungun Regency. The US$155 million expansion is expected not only to increase the capacity of the oleochemical industry, but also to create new jobs, strengthen workforce skills, and expand cooperation with micro, small, and medium enterprises (MSMEs).
North Sumatra Deputy Governor Surya expressed the expectation during the inauguration of PT Unilever Oleochemical Indonesia's expanded production activities at Marvel 3 Hall, Sei Mangkei SEZ, Simalungun, on Wednesday, August 26, 2026."The real success is seen when investments provide concrete benefits to the community. I hope this expansion of production activities will create more opportunities for local workers, strengthen the skills of our human resources, and expand cooperation with MSMEs," Surya said.
The involvement of local businesses, he said, is an important part of building a strong and sustainable industrial ecosystem. Therefore, the North Sumatra Provincial Government is calling on PT Unilever Oleochemical Indonesia and other investors in the Sei Mangkei SEZ to provide greater opportunities for local suppliers and service providers to become part of the global industrial supply chain.The regional government expects the growth of large industrial companies not to take place in isolation, but to simultaneously stimulate economic activity among communities surrounding the industrial area. The involvement of MSMEs and local workers could help distribute the economic benefits of industrial activities more broadly across the region.
"We want large industrial companies to grow together with the community. The involvement of MSMEs and local workers will ensure that the economic benefits of the Sei Mangkei SEZ reach the community in an inclusive and balanced manner," he emphasized.Surya also praised PT Unilever Oleochemical Indonesia for continuing to regard North Sumatra as an important location for the development of the chemical industry and global supply chains.
North Sumatra has a strong foundation for developing the oleochemical industry because the province is one of Indonesia's major palm oil producers. In 2024, palm oil production in North Sumatra reached 5.2 million tons. The availability of this raw material represents a strategic strength for processing agricultural commodities into higher-value products.Surya, however, stressed that industrial growth must go hand in hand with responsible environmental management. In his view, energy efficiency and social responsibility must also be integral parts of industrial development in the Sei Mangkei SEZ.
The North Sumatra Provincial Government will continue to create a favorable investment climate through measures including business facilitation, legal certainty, and infrastructure development. This support is intended to strengthen investor confidence while ensuring that industrial activities make a positive contribution to the regional economy.
One of the measures is the construction of the Dumai–Sei Mangkei gas pipeline, with an investment value of Rp3.5 trillion. The infrastructure is expected to provide a reliable energy supply for industrial companies operating within the Special Economic Zone.
The supply of electricity from renewable energy sources is also being expanded. Efforts include accelerating the operation of the 510-megawatt Batang Toru Hydroelectric Power Plant and the 150-megawatt Asahan 3 Hydroelectric Power Plant. In addition, the government continues to optimize North Sumatra's existing geothermal potential.These measures are aimed at increasing the share of new and renewable energy in North Sumatra's energy mix to 30 to 40 percent. This would put the province above the national average while creating better conditions for sustainable industrial development.
"With the availability of gas, renewable electricity, and sufficient raw materials within a single ecosystem in the Sei Mangkei SEZ, the competitiveness of our industrial products in the global market will be very high," Yuliot said.The availability of energy and raw materials within a region is an important factor for export-oriented industrial companies. With this support, companies in the Sei Mangkei SEZ have an opportunity to improve production efficiency while strengthening Indonesia's position in global supply chains.
PT Unilever Oleochemical Indonesia is among the key investors, or anchor investors, in the area. Separate from its latest expansion, the company has already accumulated US$52 million in investments in the Sei Mangkei SEZ.
According to Rizal, UOI also makes a significant contribution to the region's export activities. In the first half of 2026, UOI's exports reached US$403 million. The figure accounted for more than half of the Sei Mangkei SEZ's total exports of US$778 million."In the first half of 2026, UOI contributed US$403 million in exports, more than half of the Sei Mangkei SEZ's total exports of US$778 million. This contribution shows that downstream palm oil processing in Indonesia can compete directly within the global value chain," Rizal said.
The development highlights the importance of the oleochemical industry in increasing the value of palm oil. Processing raw materials into high-quality oleochemical products also provides Indonesia with an opportunity to further expand its contribution to global industrial chains.Meanwhile, Unilever Chief Supply Chain Officer Willem Uijen expressed optimism about the development of a sustainable manufacturing industry in Indonesia. Through the overall development of UOI's production facilities, the company can now supply up to 600,000 tons of oleochemical products to more than 30 countries.
This capacity could generate export value of up to US$800 million. According to Willem, the development of the Fatty Alcohol facility in Sei Mangkei also strengthens Indonesia's ability to produce high-value oleochemical products."The Fatty Alcohol facility strengthens Indonesia's ability to produce high-quality oleochemicals. This investment is not only an expansion of production capacity, but also reflects our commitment to low-carbon production based on circular bioenergy, as well as strengthening local workers and communities," Willem said.
The inauguration of PT Unilever Oleochemical Indonesia's expanded production activities was attended, among others, by PTPN IV President Director Jatmiko Krisna Santosa, Simalungun Regent Anton Achmad Saragih, Batubara Regent Baharuddin Siagian, representatives of the Regional Leadership Coordination Forum of North Sumatra and Simalungun, as well as several executives from state-owned enterprises and investors in the region.The expansion of PT Unilever Oleochemical Indonesia is part of industrial development in the Sei Mangkei SEZ. The North Sumatra Government hopes that the increase in production capacity will not stop at higher investment and export figures, but will also create more employment opportunities, improve the quality of human resources, develop MSMEs, and ensure a broader distribution of economic benefits among the community. (IDNC)
REPORTER: Edi Saputra | EDITOR: Fik Sagala
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