PROPOSAL

CP0 MILL 20 TON FFB/HOUR

DEVELOPMENT PROJECT
BAYEUN - RANTAU SELAMAT - ACEH TIMUR

BY

PT. BERKAH SAWIT ACEH

A JOINT VENTURE
PT. ACEH SAWIT INDUSTRY & KOPERASI PRIMAJASA
 EXECUTIVE SUMMERY
The Province of Aceh in the Republic of Indonesia due to many years of war and
instability has not been getting adequate benefits of modern development as compared to
the other provinces in the country. Now with peace, political stability, good security and
economic growth the Governor of the Province of Aceh, Mr. Irwandi Yusuf and his
elected team has been aggressively and actively promoting the overall development of the
Province of Aceh.
The Government of Aceh is currently providing free oil palm seedlings to local
smallholder farmers. Some 6 million seedlings had been given out and this ambitious
program will be expanded shortly to increase the number of participants. The objective is
to provide the local rakyat populace with sustainable incomes and alleviate poverty
levels.
In the Kabupaten Aceh Timur there are some 55,000 hectares oil palms planted by
smallholders and private plantations. A significant portion of the 75,000 tons of oil palm
fruits harvested monthly has to be sold outside the Kabupaten Aceh Timur due to
insufficient processing facilities within. This inevitably results in unnecessary transport
costs for the smallholder farmers amongst other attendant problems such as delays and
quality deteriorations.
PT. Aceh Sawit Industry is new member company of Crescent-Alhilal
International Group and has the mission objective to develop and assist the smallholder
farmer palm oil industry in Aceh. The Crescent-Alhilal Group was instrumental in
procurement of monetary donations and aid assistance amounting to USD 100 million to
the Government of Aceh which were used to rebuild Aceh and provide rehabilitation of
all tsunami victims. Recently the Government of Aceh has appointed Crescent-Alhilal
International Group - Kuala Lumpur Office with Dr. Hilmy Bakar to manage investment
and redevelopment funds from both Indonesian and foreign Investors and Institutions.
Koperasi Primajasa of Bayeun, Rantau Selamat, Kabupaten Aceh Timur has a
crude palm oil mill project which has been abandoned failed for some years due to lack
of funding and management expertise. As a result the Koperasi and its members have
suffered losses and lack of opportunity to participate and enjoy the economic benefits in
the development of the palm oil industry in its own backyard.
PT. Aceh Sawit Industry and Koperasi Primajasa has formed a new joint venture
company named PT. Berkah Sawit Aceh to fast track the completion of this particular
project and also to develop some other similar mini mill projects in other strategic
locations in the Kabupaten Aceh Timur. PT Aceh Sawit Industry has vast expertise in
palm oil milling and operational experiences. It is confident that the opportunities given

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through the Koperasi Primajasa will be realized and the smallholders and rakyat should
participate in the economic benefits.

1. INTRODUCTION

The Government of Kabupaten Aceh Timur, Indonesia has invited Crescent International
Group (Al-Hilal International Group) with Dr. Hilmy Bakar to arrange investments from
local and foreign parties. Since 2005 Crescent Group had facilitated financial donations
and contributions of more than USD 100 million from foreign and local Institutions, to
the Government of Aceh. These monies were used to rebuild houses, mosques, and
infrastructure, rehabilitate the lives and livelihood of all tsunami victims. Recently
Crescent-Alhilal Group facilitated investments from Middle East countries in palm oil
industries and palm oil plantation in Kabupaten Aceh Timur. Crescent Group and
Investors has set up the joint venture local company PT. Aceh Sawit Industry to
develop crude palm oil mills and related industries in Aceh.

With the support of the Aceh Timur Government, Koperasi Primajasa and PT Aceh Sawit
Industry has formed a new joint venture company named PT. Berkah Sawit Aceh to
redesign and construct the unfinished mill. The latter company has survey the location
and surroundings in relation to feasibility of the project. Preliminary work has been
carried out and it is viable to revive the abandoned project.

Kabupaten Aceh Timur has some 55,000 hectares oil palms planted by smallholders and
private plantations. A significant portion of the 75,000 ton FFB harvested monthly is sent
out to Tamiang and other mills several hours away. Inevitably transport costs for the
fruits are higher and delays often occurred.

Given below are the oil palm plantations in Kabupaten Aceh Timur:
• PT Anugrah – 3,000 ha
• PT Bumi Flora – 2,000 ha
• PT Citra Ganda Utama – 3,000 ha.
• PT. Beurata Maju – 805 ha.
• PT. Patria Kamaou – 1514 ha.
• PT. Mulasindo – 5650 ha.
• PT. Putri Hijau – 1500 ha.
• Other Smallholders Plantations – 29.466 ha

Total Palm Oil Plantations in Aceh Timur: 54.946,3 ha.

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2. THE OBJECTIVE OF PROPOSAL

Koperasi Primajasa Aceh Timur is the only company appointed by the government of
Aceh Timur to develop the ‘RAKYAT’ type of mini mills to serve the local farmers by
processing their palm fruits at better prices and with relative more conducive conditions.
PT Aceh Sawit Industry with its expertise and management experiences, has form a
strategic alliance with the Koperasi to initially complete the Bayeun project and further to
develop several more of the ‘Rakyat’ mills at selected locations in Aceh Timur, with new
JV company named PT. Berkah Sawit Aceh.
The main objective this proposal is to invite potential partner and investor to joint in this
project as new share holders.

3. THE DEVELOPMENT OF BAYEUN CPO MILL PROJECT

This comprises of the following components:

a. Licenses and Approvals

• Koperasi Primajasa has an operation license issued by the office of Bupati
Aceh Timur. Izin Lokasi, Izin Prinsip, IMB, UKL/UPL, HO/Dinas
Perindustrian, SIUP/SITU
• Other licenses will be given in due course

b. Location
• An area of 4 hectares was purchased in Desa Bayeun, Kecamatan Rantau
Selamat, Aceh Timur.
• The site is 1 km off the main road Medan - Banda Aceh, 14 km from
Langsa, Aceh Timur.
• The land is favorable factors such as free of flooding, soil type, proximity
to water source, topography

c. Development Project
• Design concept regards milling capacity and machinery shall be amended
• Milling capacity shall be initial 10 ton FFB/hour
• Milling capacity to 20 ton FFB/hour soonest possible.
• Construction shall start by mid - 2011, completed and in operations by
early 2012.

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 • The mill location is in Desa Bayeun, Kecamatan Rantau Selamat,
Kabupaten Aceh Timur, Province of Aceh, Indonesia.
• The site is 3.5 hours by road to Medan – Province of North Sumatra and
Belawan seaport. Infrastructure and road transport network is good and
established.

d. Heavy Equipment and Vehicles

• Heavy equipment such as Wheel Loader and Dump Trucks shall be
required for the handling of FFB and general milling operations.
These shall be purchased by equipment leasing arrangement.
• For the Directors and Management staff some general vehicles shall be
provided.

e. Housing & Facilities

• Sufficient houses will be built to accommodate the mill staff and workers’
• Facilities such as free electricity and water will be provided.
• Sports and educational activities shall be available.
• Basic education shall be provided to the children of the workers

f. Community Services
• The Company will participate in relevant community development.
• Mill workers will be benefit from financial services such as provident fund,
cooperative activities
• Prayer house shall be built and facilities provided.

4. THE EXISTING ASSET VELUE AND COST OF PROJECT

1. Current Status of Mill Project:

a. Process Building (estimated 800 m2 area)
b. Vertical Sterilizers – 2 x 5 ton
c. Screw Press – 1 x 10 ton/hour
d. Digester – 1 x 3000 liters
e. Steam Boiler – 1 used unit
f. Other machinery fabrications

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 2. The Mill will have to be redesign to suit new processing systems and with
larger. Thus most of the machinery fabrications and the incomplete small
steam boiler have little salvage value.
3. Estimated valuation of current status:
a. Pra Ops, Izin2, etc : 500.000.000
b. Land 40.000 M2 : 1.000.000.000
c. Mill Building : 500.000.000
d. Machineries : 2.500.000.000
e. Other & Goodwill : 500.000.000

Total : Rp. 5.000.000.000 (Lima Milyar Rupiah)

4. Outstanding works to be done:

a. Civil Works - earthworks, machinery foundations, flooring, drains, roads,
fencing, retaining walls, others
b. Ancillary Buildings – office, guardhouse, others
c. Mechanical works
d. Electrical works
e. Water Treatment Plant
f. Effluent Treatment Plant
g. Proprietary Equipment: Steam Boiler, Weighbridge, Diesel Generators,
Steam Turbine, Geared Motors, Piping, Valves, Fittings, others
h. New process systems
i. Housing
j. Vehicles.

Total costs : Rp. 25.000.000.000

5. Grand Total Cost (3+4) : Rp. 30.000.000.000

5. SECURITIES

The financial lenders shall have the following ‘first right’ to:
a. Floating charge on the Mill and all assets
b. Forward sales of crude palm oil
c. Advantage of trading positions long term basis
d. Any other terms acceptable by all parties

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6. FFB SUPPLY

The proposed mill shall purchase some 160 – 200 ton FFB per day and these shall
be sourced from nearby surrounding smallholder farmers, private individuals and
KUDs who are pre-selected partners in the project.

A total of 3,500 hectares of good quality oil palms have been identified and their
owners have agreed to support the proposed mill in return for better FFB prices
and logistic benefits. FFB shall be sourced not more than 1 hour transportation
time to the mill.

With the support of the provincial government program the local farmers are
aggressively cultivating new oil palm areas. It is estimated that in the forthcoming
3 – 5 year time the FFB production will be increased at least two fold.

7. PROJECT IMPLEMENTATION & MANAGEMENT

a. Dr. Hilmy Bakar (MBA, Ph.D Economic)

• Direktur Utama, Indonesian nationality.
• Responsible to secure all the necessary approvals and governmental
requirements in order to build and operate the palm oil mill
• Responsible for project funding
• Supervise the integrity and coordinate all governmental relationship of the
Company. Business consultant to the local government of Aceh

b. Jeffrey Yip
• Appointed as Project Director, Malaysian nationality.
• Design and implement the construction of the Mill.
• Manage milling and business operations
• Twenty years Indonesian experiences in advisory, consultancy construction
and management of palm oil mills
.
c. Another shareholder shall be appointed as Chairman, Commissioner, Director
and other to audit the finances and for general operations of the Company,

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 from PT. Aceh Sawit Industry and Koperasi Primajasa or other parties,
appointed by shareholders.

8. PROFIT/LOSS PROJECTIONS

Based on the following:

a. Term loan of RP 15.000.000.000 at 15% interest per annum for mill
construction. With 2 years grace and 5 years repayment periods
b. Revolving credit of RP 5.000.000.000 for purchase of FFB and processing
operations
c. Mill operating at least 16 hours per day and more if necessary.
d. Initial milling capacity of 10 ton FFB/year
e. Final milling capacity of 20 ton FFB/hour - after 1 year operations
f. Project costs of RP 20.000.000.000 including land, approvals, mill
construction, housing.
g. Production of 21.0% CPO extraction and 4.5% PK extraction rates are used.
h. Payback on investment shall be within 2 years.

9. JOINT VENTURE COMPANY : PT. BERKAH SAWIT ACEH

1. Joint venture company, named: PT. BERKAH SAWIT ACEH

2. Shareholders : Koperasi Primajasa : 20 %
PT. Aceh Sawit Industry : 80 %
3. Paid Up Capital: RP 15.000.000.000 (Lima Belas Milyar Rupiah)
4. Head Office: Bayeun, Rantau Selamat, Aceh Timur
5. Management Structure:
President Commissioner : Mr. Hanafiah
Commissioner : Mr. M. Zaini ST.
Commissioner : Mr. Sulaeman Abdullah
President Director : Dr. Hilmy Bakar, MBA
Project Director : Mr. Jeffrey Yip
Director Of. Finance & Adm : Mr. Sayed Ardhon
Director : Mr. Yanuar Abdullah
Director : Mrs. Emilia Haironesia

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FICTURE OF MILL PT. BERKAH SAWIT ACEH
BAYEUN, RANTAU SELAMAT, ACEH TIMUR

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