The company is also cultivating edamame, or immature soybean, with the help of local farmers, but it is now attempting to develop a project in sago, where it harvests sago from natural forests to process it into sago starch.

Currently, ANJ has access to manage 40,000 hectares of the total 5.2 million ha of natural sago forests in Papua. It has invested US$40 million to support the project.

However, the company’s executives acknowledged that it was not an easy task to develop sago in terms of production and sales. The company’s development in sago last year was slower than anticipated, said ANJ president director Istini T. Siddharta.

“As we process and harvest sago from sago trees growing inside the forests, the production is tough and takes a lot of energy. Accessing sago [resources] is difficult,” she said during the company’s visit to The Jakarta Post recently.

Currently, ANJ produces 180 tons of sago starch per month, which is enough to meet only around a fifth of current market demand.

Aside from difficulties in production management, Istini said, fuel for diesel machines to process sago into starch made production costly.

Istini said the company should also deal with sales, as the commodity’s market had yet to develop perfectly. So far, ANJ’s sago starch was absorbed by the food industry, especially producers of glass noodles, locally known as sohun.

In addition, Istini said sago starch was also used by food sellers as a raw material to make meatballs, along with flour and meat. However, the overall absorption of sago by the food industry was still rather low, she said.

“Sago also has yet to become known globally. Many people have no idea what sago is and what it is used for. Most people still also think that sago is the same as tapioca starch,” Istini said, adding that sago would be a wasted source of carbohydrate if not cultivated properly.

Nevertheless, Istini believes sago is a promising food commodity in the future as an alternative to rice, which is now still the main carbohydrate source for most Indonesians.

She said sago had benefits, as it was gluten-free and better than flour in absorbing flavors, for instance. Sago was also a good material to make sweetener and thickener for the food industry, while also benefiting other manufacturing industries, such as paper and textiles.

Despite having yet to find an ideal business model for developing sago, ANJ commissioner George Santosa Tahija said the sago industry could help improve welfare of many Papuans if it was built in a sustainable manner.

George said Papuans had a higher comprehension of sago, as it was their main staple food, adding that at least 91 percent of ANJ’s employees for its sago business were Papuans.

Last year, ANJ booked consolidated revenue of $161.8 million, up 20.3 percent year-on-year, slightly above its target of $157.5 million.

Palm oil accounted for around 95.6 percent of the company’s total revenue in 2017.

In 2017, ANJ’s CPO production reached 210,248 tons, up 18.6 percent from a year earlier.

From its total CPO production, ANJ sold 209,000 tons of CPO at an average price of $613 per ton. From the CPO sales, ANJ gained $133.1 million last year, up 24.9 percent from 2016.

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