BW Plantation (BWPT), a mid-sized crude palm oil (CPO) and palm kernels (PK) producer, felt the impact of weak global demand for commodities in 2012. The company's net profit in 2012 fell 18.17 percent to IDR 262.18 billion (US $26.89 million). Profit per share fell to IDR 64,83 from IDR 79,35 per share last year. The decline in profit was particularly caused by an increase in operating expenses from IDR 131.05 billion (US $13.44 million) to IDR 153.87 billion (US $15.78 million).
Palm oil is one of the world's most produced and consumed oils. Few Indonesian industries have shown such a robust growth as the palm oil industry did during the last 15 years. This growth is visible in the country's production and export numbers as well as in the quantity of its palm oil estate area. Driven by increased global demand and higher yields, palm oil cultivation has been expanded significantly by Indonesian farmers and conglomerates (at the expense of the environment and at the expense of production quantities of other agricultural products as many farmers have switched to palm oil plantations).
Global palm oil production is dominated by Indonesia and Malaysia. These two countries together account for around 85 to 90 percent of total global palm oil production. Indonesia is currently the largest producer and exporter of palm oil worldwide. As global demand has weakened significantly after the crisis in the late 2000s, palm oil producing companies in these two countries have been hit hardest.