29/11/2010 (Vivanews.com) - The European Union announced their plan to form a joint venture on oleochemical products, crude palm oil's derivative. Following the plan, the EU are likely to set up a partnership with Indonesia in downstream industries which focus mainly on agricultural products.

Coordinating Minister for the Economy, Hatta Rajasa, said Indonesia's CPO products have now reached 20 million tons per year. "Most of the exported products are still in the form of CPO. There are less firms that put together [the CPO] into processed products, not to mention oleochemicals," he said in Jakarta today, Nov 29.

The government, said Hatta, makes available new clusters to develop the CPO's derivative products that are situated in Kuala Enok, Riau, and Kalimantan. "There are two clusters in Riau," he said.

Chief of Capital Investment Coordinating Agency (BKPM) Gita Wirjawan said the EU have shared around 17-18 percent of investment in Indonesia."We're hoping that the percentage keeps on rising," he said.

The EU's direct investment in Indonesia is worth 50 million euro with more than 700 companies available.

Gita said furniture industry has mostly contributed to the Indonesia's exports to Europe, touching 12 percent of the total exports.

Hatta nevertheless said the government will not heap upon incentives to the EU because they are specifically aimed at products.