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Jakarta Post

Dutch firm mulls Rp 4 trillion investment to develop Indonesian nutmeg industry

  • Eisya A. Eloksari

    The Jakarta Post

Jakarta   /   Fri, December 18, 2020   /   03:25 pm
Dutch firm mulls Rp 4 trillion investment to develop Indonesian nutmeg industry Old gold: The nutmeg spice was a prized commodity among European colonizers. (Nurdiyansah Dalidjo/-)

Netherlands-based food manufacturer Verstegen Spices & Sauces is interested in investing Rp 4.2 trillion (US$298 million) to develop the nutmeg industry, particularly in Fakfak regency of West Papua, according to the Investment Coordinating Board (BKPM).

The firm is committed to working with local nutmeg farmers in West Papua and to provide technology for the nutmeg stripping, drying and cleaning process, the BKPM stated. The cooperation will potentially employ 50,000 Indonesian nutmeg farmers.

BKPM investment promotion deputy Ikmal Lukman said that Indonesia was aiming to develop a downstream industry for nutmeg to add value to the commodity as well as increase its competitiveness in the market.

“World demand for nutmeg products will increase, because the food, seasoning, cosmetics and pharmaceutical industries continue to [grow]. If we have a downstream industry, we will create added value for the industry and the national economy, particularly in eastern [Indonesia],” he said in a press statement on Thursday.

The eastern part of Indonesia currently accounts for 70 percent of all nutmeg production in the country.

As the world’s largest exporter, Indonesia ships out three times as much nutmeg as India and 4.5 times as much as the Netherlands, contributing 40 percent to global exports of the commodity, said Ikmal.

Read also: Exports of agricultural commodities continue despite logistical disruptions

The Netherlands is one of Indonesia’s main nutmeg export destinations, along with Germany, Vietnam and Japan.

However, the Netherlands’ nutmeg imports have gone down by 46.2 percent to US$11.5 million in 2019, from $21.4 million in 2015.

The investment plan was made after BKPM head Bahlil Lahadalia visited the Netherlands in November to talk about several investment opportunities.

“Indonesia can become a major player in the nutmeg industry in the world. Resources such as spices must be managed properly, so that they can become sources of new economic growth,” said Bogor Agricultural Institute (IPB) rector Arif Satria, adding that IPB was interested in working with the BKPM on nutmeg research and development to increase the commodity’s value. (eyc)