Jatoil has teamed up with another established jatropha oil producing company, PT Waterland, to develop biofuel farms in Indonesia.  The companies have established a new company in Indonesia to pursue the venture, PT Jatoil Waterland, which is owned 70% by Jatoil Limited.

Central Java is a suitable location for jatropha production because there is a significant quantity of suitable land that has been earmarked for sustainable development by the Indonesian government.  The land is forestry “buffer” land which is designed to stimulate economic development by creating new agricultural industries.  The creation of such an opportunity greatly reduces the instances of illegal exploitation of the protected forest reserves arising from the economic hardship of the local community. 

PT Jatoil Waterland has acquired 1,000 hectares of 2 to 3 year-old jatropha plantation in Central Java and signed an off-take agreement covering the total production from this plantation for the next four years. Production started in July 2010 with the sale of the first container load of 10 tonnes destined for the aviation industry. It is expected about 700 tonnes of crude jatropha oil will be harvested over the next 12 to 18 months.  PT Jatoil Waterland will also be developing a further 1,000 hectares of new plantation in the latter half of 2010, with further plans to expand to 10,000 hectares through green-fields development of unused lands.  This land will be planted with new, more productive strains of the jatropha tree that Jatoil, and PT Waterland, are developing through plant breeding programs.

Also involved in the project is an Indonesia State-owned Enterprise called Perum Perhutani, or General State Forestry Company, which controls the land covered by the joint venture.  Over one million hectares has been earmarked by Indonesian government authorities for the development of sustainable biofuel feedstocks, and Jatoil has a vision to develop up to 100,000 hectares of biofuel farms over the next few years.