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This Summary of Project Information is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision.
Summary of Project Information (SPI)
Project number 10233
Project nameWings Oil Palm
CountryIndonesia
SectorPalm Vegetable Oil
Department
Company nameP.T. Gawi Makmur Kalimantan
Environmental categoryB
Date SPI disclosedMay 18, 2001
Projected board dateJune 18, 2001
StatusCompleted
Previous EventsInvested: December 20, 2002
Signed: October 16, 2002
Approved: April 30, 2002

Project sponsor and major shareholders of project company
The project sponsor is the Wings Group of Indonesia (Wings or the group), a local private company and an existing IFC client. Wings' main members include its two operating companies, PT Sayap Mas Utama and PT Wings Surya, that are Indonesia's leading soap and detergent manufacturers. The success in the soap and detergent products has enabled the Wings Group to gradually diversify into industrial chemicals, packaging, real estate, building materials and banking. Historically the group has been financially strong and has demonstrated solid business performance throughout the financial crisis in Asia and in Indonesia.

The project companies are PT Gawi Makmur Kalimantan (GMK) and PT Damit Mitra Sekawan (DMS). GMK is owned by PT Wahana Wings Surya (WWS) at 84.45% and by PT Wahana Sayap Kencana (WSK) at 15.55%. DMS is owned by WWS at 23.11% and by WSK at 76.89%. WWS and WSK, the sponsors of the project, are the group's two holding companies, which are in turn owned directly by the extended members of the group's two founding families.

Total project cost and proposed IFC investment
The total project cost is estimated at US$43 million. The proposed IFC investment consists of a US$10 million A loan for IFC's own account and a US$11 million syndicated B loan.

IFC investment as approved by Board
11.5 million (USD)
Product LineIFC Investment (million USD)
Risk Management 
Guarantee 
Loan11.5
Equity 

Location of project and description of site
The plantation area is located on the coastal plain of Kalimantan Selatan in the southern tip of Kalimantan and is divided into three estates located near the city of Banjarmasin. GMK owns one estate, Kebun Satui, located at Satui in the district of Kota Baru, about 170 km on the provincial road from Banjarmasin. This plantation is close to a nearby river jetty from which the palm oil will be shipped to Surabaya, Jakarta or Medan. DMS owns two plantations: 1) Kebun Jorong, which is located at Jorong in the district of Tanah Laut, about 90 km on the provincial road from Banjarmasin; and 2) Kebun Pasir Putih, which is located at Kintap in the district of Tanah Laut, about 140 km on the provincial road from Banjarmasin.

The first processing mill has been built at Kebun Satui and the second mill is to be built at Kebun Jorong in 2004 or 2005.

Description of company and purpose of project
The project companies were established by the Wings Group in 1995 to engage primarily in the development and maintenance of oil palm plantations and related manufacturing activities. Agricultural development started in 1996 and as of December 2000 a total area of 10,659 ha had been planted with oil palms. The project covers both the development progress to date and the next phase comprising the maintenance to maturity of immature plantations, planting of the remaining 2,700 ha of land and the construction of a second palm oil mill. The project is the Wings expansion into agribusiness as a strategic investment that will offer synergy with its existing business and capitalize on Indonesia's optimal conditions for oil palm cultivation.

The project is located in an undeveloped rural area in Kalimantan. It has a significant development impact by providing employment and income generating opportunities to the local people in the remote area. It is in support of an export product for which Indonesia has a competitive advantage. In addition, the project will serve as a model in addressing social/community issues in the plantation development.

IFC's role is seen as crucial because long-term financing is still scarce in Indonesia, especially for agribusiness projects. This is particularly relevant in the oil palm industry where large plantations developed in the early 1990s are currently unable to source end-financing to complete their investments and more specifically their processing facilities. IFC's financing of the project is expected to be pivotal in reducing the perceived risks by potential institutional investors and banks.

Environmental and social issues - Category B
This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects, because a limited number of specific environmental and/or social impacts may result which, can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria.

To view the environmental documents for this project, click here


Location of environmental documents in locally affected community
The ERS is disclosed in Camat office in Jorong, Kintap, Satui and in the company office in Banjarmasin (Jl. Pramuka No. 16, Km 6 Rt. 20, Banjarmasin 70238), Indonesia. It is also disclosed in the local newspaper Barito Post.

To contact the project company, please write to:
Thomas Suseno
Director
PT. SAYAP MAS UTAMA
Kawasan Perluasan Utara PT. JIEP
Jalan Tipar Cakung Kav. 5-7
Jakarta Timur - 13910
P.O. Box 7668, Jakarta 13076, Indonesia
Email address: thomas.suseno@wingscorp.com

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