Palm Oil Plantations are a very lucrative agricultural business for agriculture entrepreneurs and companies to invest in. The potential in this business makes palm oil one of the most significant revenue streams in Indonesia.
The procedure for acquisition or take over of plantations, especially oil palm plantations, isn’t as simple as imagined.
Considering that transactions in the property sector, especially the take-over of oil palm plantations, contain very significant capital company and involve many parties as mediators, the authorities in this case the Minister of Trade of the Republic of Indonesia believes the need to make rules to protect the rights and obligations of the parties involved through the Minister of Trade Legislation of the Republic of Indonesia no. 33 / M-DAG / PER / 8/2008 concerning Brokerage Company of Property Trade.
However, though there are regulations governing trade transactions, it’s not uncommon for a trade to be overly convoluted and less cooperative between mediators, so the take-over process actually becomes unsuccessful or completely void.
Listed below are steps to acquire a palm oil plantation in Indonesia
First, contact a reliable brokerage firm and ask if they have palm oil plantations to sell. Do not contact individual brokers since they may not have the whole detail on particular plantations, and generally they aren’t clear with the actual connection to the accessible farm. Such cases often occur in Indonesia and you need to make sure the plantations don’t have any legal issues.
Second, ask the broker firm to do the due diligence so that you avoid future legal issues in Indonesia. A trusted brokerage firm must have qualified survey tools such as drone mapping and a trusted agronomist / business analyst staff.
Third, make sure that the selling price of the plantation is fair. Just about all individual agents markup the original price up to 30%. You should be careful in doing business with these kinds of individual brokers because of the type of lack of transparency. In this case you need to appoint a trustworthy broker to represent you in the take-over process. A typical commission fee of 1-3percent should be anticipated from the farm selling facet.