Riffrag Business & Finance Report

JAKARTA – PT Bank Mandiri Tbk (BMRI) fully supports the palm oil sector National and derivatives industry by providing financing facilities to Rp35 trillion in October 2009 until the end. This figure grew 16 percent compared to the same period in 2008 and reached the 75 per cent of the total plantation sector financing portfolio at the Bank Mandiri.

Director of Corporate Banking Bank Mandiri Riswinandi said the palm oil sector financing of Bank Mandiri thus increasing the portfolio as of October 2009 reached Rp 35 trillion with a low NPL rate of under one percent.

“Business CPO did have a very tough challenge, let alone the industry still relies on export markets, especially the many obstacles in implementing the European Union environmental standards. However, we believe the prospects for the development of Indonesian palm oil industry will continue to grow well because we have to recognize the characteristics this business in a long time, “Riswinandi says, in a written statement received Legal, here on Friday (3/12/009).

Therefore, Bank Mandiri is present in the Indonesian Palm Oil Conference and Price Outlook 2010 is organized by GAPKI (Palm Indonesia) in Bali, as a form of full support in this sector. Chairman of GAPKI (Indonesian Palm Oil) Joefly J. Bahroeny said that such support by Bank Mandiri to these sectors is needed especially when some doubt on the part of stakeholder, banks, financial institutions and regulators that led to the perception that this sector is no longer prospective.

Bank Mandiri conviction can not be separated from the long history of financing oil palm plantations which started from 4 Legacy Bank eventually merged into Bank Independent. Moment-owned banks, state governments are always involved in a variety of financing schemes such as the PIR program TRANS, KKPA PIR, PBSN first, second, third, until the program currently underway KPEN which-RP. The long experience of Bank Mandiri is made to understand the characteristics of this business, and preparing financial products and other products that suit the needs of this sector.

In 2008 the experience of Bank Mandiri in channeling financing to this sector, are tested. CPO prices could then rise up to USD1395 per ton due to rush current global liquidity impact on commodity markets and financial markets. However, CPO prices corrected and then declined sharply until it reaches the lowest point of USD435 per ton in October 2008 in line with the global crisis and a drop in world oil prices.

Industry financing models that use palm Bank Mandiri be a contributing factor to the growing portfolio of low NPL rate. Business financing model is supported by regular review of the oil palm industry through research both internally and with external parties who are competent, covering all aspects of both micro and macro that is always obtained the information up-to-date. In addition, the financing structure that is prepared in accordance with the characteristics of the financing needs of oil palm, so that the current Bank Mandiri worthy of being the primary option for financing palm oil.

Bank Mandiri rate of oil palm has the advantage over similar commodities such as vegetable oils, soyabean, rapeseed, and canola oil production especially in a year on each hectare of land. In addition, the use of palm oil is not only as food but also fuel the consideration of factors that make demand will continue to grow into the future.

Related to environmental and social issues, the bank always consider these aspects in any financial analysis such as compliance with government regulations, the legality of a clear land and the social conditions of communities around the garden. Bank Mandiri also important at oil palm plantation developments are sustainable (sustainable) and will continue to support government programs such as forest reservations, plasma program, and CSR in oil palm sector.