06/04/2009 (The Jakarta Globe) - Agriculture Minister Anton Apriyantono says the Burmese government has invited Indonesian companies to invest in developing that country’s oil palm and rubber plantations, although business players at home say they will have to first see for themselves whether conditions in Burma are favorable.

Commenting on his recent visits to Burma, Laos and Cambodia, Anton said on Monday, “Myanmar has specifically asked Indonesia to invest in its plantation sector,” referring to Burma.

“Given the fact that they have plenty of suitable land, Indonesian firms may be interested in investing there.”

However, Anton did not mention how much land was actually involved, saying that the proposal had been made by the Burmese government in the form of a diplomatic request.

Derom Bangun, vice chairman of the Indonesian Palm Oil Council, or DMSI, welcomed the offer. However, he said, there were two factors that had to be considered by investors before establishing plantations.

The first factor would be the weather. Plantations located in Burma, Derom said, might receive less sunlight than plantations in some parts of Indonesia.

“The oil palm grows best in sunny areas,” Derom said. Interested companies, therefore, would have to make sure that the weather in the proposed areas was suitable for the development of oil palm plantations.

Another factor that would need to be taken into account, he said, was the country’s investment climate.

“We need to consider whether the local laws allow a company to manage extensive areas of plantations,” he said.

Derom pointed out that in Indonesia, a plantation company is allowed to manage a maximum of two million hectares of land, and must also fulfill requirements related to corporate social responsibility.

Besides investing in the plantations sector, the two countries have also agreed to increase cooperation in the agricultural products trade.

Given its population and geographical location, Anton said, Burma could become a good market for Indonesia’s agricultural products.

Burma has a population of about 56 million people and shares borders with Thailand, China, Bangladesh and India.

Many Indonesian processed food products, as well as agricultural machinery, are sold in Burma, the minister said. However, these are currently imported through third countries like Malaysia, Singapore and Thailand.

“We could avail of this opportunity to start supplying products directly to Burma,” Anton said.

To help promote trade, the government would provide free agricultural machinery to Burma and Cambodia this year.

“We gave 13 hand tractors to Laos during our visit, and we plan to make similar donations to Burma and Cambodia later this year,” the minister said.

Indonesia’s imports from Burma are mostly comprised of beans, red onions and canned fish, while Burma imports palm oil for cooking and cigarettes from Indonesia.