EXCELLENT SOIL AND A BALMY CLIMATE HELP PRODUCE SOME OF THE BEST TEA AROUND, WHILE BREATHTAKING SCENERY OFFERS POTENTIAL FOR AGRO-TOURISM

INSYAF MALIK President Director of Plantation VI

The tea bushes rise up on the flanks of Kerinci, the highest mountain in Sumatra. The climate and soil here produce some of the finest tea in the world, competing with the best from India and Sri Lanka.
The scenery is stunning, a sea of green tea bushes sweeping around the skirts of Kerinci which rises to a height of nearly 12,500ft in the chain of mountains running down the island’s west coast.

The view from the summit is breathtaking, says Insyaf Malik, President Director of PT Perkebunan Nusantara VI (PTPN VI), the state-owned Kajoe Aro tea plantation, which lies among the mountains of Jambi province.
Kajoe Aro has one of the largest tea factories in the world, capable of producing 6,600 tons of dried leaves a year, but wants to diversify into tourism. “We are going to develop a tourism business based specifically on this tea plantation,” says Mr. Malik.
He gained experience in developing what is called agro-tourism at the Gunung Mas tea plantation at Puncuk in West Java in the late 1980s and early 1990s. “In PTPN VI we have also started to develop agro-tourism, at Danau Kembar, around 30 miles from Padang, where we have a tea plantation close to two very beautiful lakes called the Twin Lakes.”

PLANTATION VI is looking for partners to act as agents for the export of its branded product.

The development of agro-tourism is less of a priority than the expansion of palm oil production at PTPN VI however, which was created from the merger of four estates in Jambi and West Sumatra provinces in 1996. Palm oil — all of which is sold on the local market—is the plantation’s main business and almost 80 percent of sales revenues are derived from it. About five percent of revenues come from rubber, which is also sold locally, and 15 percent from tea, of which 85 percent is exported.
Mr. Malik says the plan is to reduce rubber production and increase palm oil production. Tea production, which last year was around 8,800 tons, will stay at around the same level, but there are plans to develop an export brand of packet tea and teabags. Currently, about a third of PTPN VI tea is exported to the United States, a third to Europe and the rest to Asia and the Middle East.

PTPN VI is unique among state-owned plantations in that only 30 percent of the land is owned by the company. The rest is owned by smallholders scattered over some 156,000 acres, supporting around 31,000 families.
More than two-thirds of total production is in Jambi province, where PTPN VI has created a sister company with 30,000 acres of new land, of which only 6,000 acres are currently being exploited. “However, in four years we expect to have 20,000 acres more for palm oil production,“ says Mr. Malik. “We are also negotiating with the local government to obtain a license for a further 50,000 acres. In Jambi there are still more than 1.23 million acres of land available for plantations.”

Over the next five years PTPN VI plans to develop a further 25,000-35,000 acres for palm oil production. The company, which forecasts profits of between six and eight billion rupiahs ($670,000-$890,000) this year, expects to go public in 2004.
Tea production will be sustained on around 7,600 acres. “In five years’ time we would like to start exporting our branded tea,” says Mr. Malik. “We know it is difficult to sell directly to the market, so we are looking for partners to act as agents so we can sell our tea through them.
“We will not be investing in downstream industries for palm oil just yet, as this requires a big investment and technology. However, we are open to partnerships with other companies.”
PTPN VI has three palm oil mills with a capacity of 155 tons per hour. A new factory will start operation in September, raising capacity to 220 tons per hour. Mr. Malik adds that they are also seeking investment for another mill to process the harvest from new plantations over the next few years.