REPUBLIKA.CO.ID, NUNUKAN - Sebatik Island in Nunukan District, North Kalimantan, had the potential for investors to develop palm oil processing factories as the area had about 8,000 hectares of oil palm plantations, local entrepreneur H Herman said.

"The people of Sebatik Island need palm oil factories to process the commodity as the region has at least 8,000 hectares of plantation," he said here on Sunday.

Since there was no investor willing to develop business in the sector, oil palm farmers sold the commodity to Tawau in the Malaysian state of Sabah, he said. "We are forced to sell our palm product to Tawau because the island does not have palm processing factory," said Herman who has successfully developed Sebatik Island by creating oil palm plantations.

According to him, currently, former Nunukan district head Abdul Hafid is constructing an oil palm processing plant in Bambangan Village, West Sebatik Sub-district. "We hope the factory can accommodate the island`s oil palm production," Herman said.

However, he doubted the factory could accommodate oil palm production from all of the 8,000 hectares of plantation in Sebatik. The factory will have small production capacity although palm oil production from the island keeps increasing.

"It is not enough to have one processing plant particularly when all plantations here have produced palm oil. So we need another processing factory," Herman said.

It was likely that foreign and domestic investors were not willing to build palm oil processing plants due to inadequate power supplies, he said.

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