Indonesia Backs $47 Million Integrated Coconut-Processing Plant in Morowali

Government supports downstream coconut investment

Indonesia's government has endorsed the start of operations at PT Freenow Food Industry's integrated coconut-processing facility in Morowali, Central Sulawesi. According to ANTARA, the project involves planned investment of about Rp776 billion, equivalent to $47 million, and is expected to create nearly 2,900 jobs.

The plant was formally inaugurated on September 7, 2026. Investment and Downstreaming Minister Rosan Roeslani described the operation as part of the government's effort to expand domestic processing in the plantation sector. The policy aims to retain more value from Indonesian agricultural resources while supporting employment, farmer incomes and the wider coconut-processing industry.

Freenow plans to develop the project in three stages, creating an integrated operation extending from raw-material procurement to finished products. Rosan, who also serves as head of the Investment Coordinating Board and CEO of Danantara, said the government would continue supporting an investment environment in which companies can grow alongside the Indonesian economy.

First phase targets 184,000 tonnes annually

During the initial phase, the company will manufacture coconut milk, coconut water concentrate, coconut oil and shell charcoal. Later stages are expected to add higher-value products, including coconut-based milk and ready-to-drink beverages intended for export markets. No production volumes or destination countries were disclosed for those export-oriented lines.

The facility is designed to use almost every part of the coconut. Flesh and water will supply food and beverage production, while shells and husks provide inputs for other processed products. This integrated model can reduce residual waste and give the processor several revenue streams from the same agricultural raw material.

ANTARA reported that the first phase will absorb about 184,000 tonnes of coconuts per year. At full operation, annual raw-material requirements are targeted to reach the equivalent of 500 million coconuts. The expansion would therefore substantially increase procurement needs beyond the plant's opening stage, although the source did not provide a timetable for reaching full capacity.

Procurement will connect farmers and local suppliers

The operation is expected to involve as many as 10,000 farmers and community members when fully developed. Rosan called for farmers to be included through purchasing certainty and fair prices, while also advocating support for replanting smallholder plantations. Small and medium-sized enterprises and local suppliers are also expected to participate in the supply chain.

For growers, the plant's commercial impact will depend on how procurement contracts, quality standards and collection networks are implemented. A facility requiring the equivalent of 500 million coconuts annually needs a dependable supply base, making farm productivity and plantation renewal important to capacity utilization. For Freenow, using coconut flesh, water, shells and husks broadens its product portfolio and may help balance exposure across food, beverage, oil and charcoal markets.

The project also adds processing capacity outside Indonesia's largest established industrial centers. Its planned export products could increase the share of coconut derivatives sold in processed form rather than as unprocessed material. However, ANTARA did not report expected export revenue, commissioning dates for the later stages or the proportion of output intended for domestic buyers, leaving the eventual trade impact dependent on the pace of expansion and access to overseas customers.