22/06/2011 (WorldCrop.com) - Eka Tjipta Widjaja, the head of palm oil giant Sinar Mas Group, has climbed to the top of Indonesia’s rich list, according to the business magazine Globe Asia.

The reclusive 88-year old has seen his personal worth triple from $4 billion to $12 billion, in just 12 months. The title of Indonesia’s richest person goes to him principally because of his company’s aggressive palm oil expansion, ahead of the two-year deforestation moratorium that recently came into effect.

Sinar Mas – through its Golden Agri Resources palm oil subsidiary – is thought to own as much as one million hectares of palm oil plantations, which are either in full production or at the pre-planting level. These alone are valued at around $7 billion. The company’s assets also include banking, property and pulp and paper products: but it is the palm oil and coal mining sectors that have been outperforming all others, as commodity prices have continued to rise. This has translated into record earnings for companies such as Golden Agri Resources, which recorded a 91% increase in net profits for 2010, to $387 million.

This is an impressive turnaround for the parent company. During the 1997 Asian financial crisis, it posted losses of $9 billion in its banking division and had to be bailed out by the Indonesian government. Today it’s the largest family-owned enterprise in Indonesia. Although Eka Tjipta Widjaja now takes little part in the daily management of the company, each division is spearheaded by one of his four sons.

Eka Tjipta Widjaja is not the only palm oil ‘baron’ on the rich list. A total of four businessmen who head companies with core operations in the palm oil sector also make it. Salim Group, Wilmar Indonesia and Bakrie Sumatera are the others, whose owners come in at number three, four and five on the list respectively. All have all made sizeable capital investments in the more lucrative downstream palm oil processing in recent years. Wilmar has this year earmarked another $900 million to build factories that will domestically produce value-added palm oil byproducts, such as soap and margarine.

Indonesia has a population of 230 million, with a burgeoning middle class and a firm domestic economy which is growing at a rate of 6.5% annually. With strong consumer demand and steadily rising incomes at home, as well as significant export markets in India and China, big palm oil in Indonesia is set to keep growing – and its bosses will keep reaping dividends.