This paper uses the proliferation of palm oil factories across Indonesia’s undeveloped hinterland as a natural experiment to study industrial onset and estimate spillovers from agricultural processing. The main finding is signs of urbanisation and structural change around factories: more non-agricultural employment, higher incomes, and more people, firms, and other economic and social organisations. These patterns can at least partially be explained by economic linkages, infrastructure and other public goods, and economies of scale in production. By focusing on subsistence rural regions in a large developing economy, this paper adds a globally-significant new case to a growing literature emphasising the importance of agglomeration externalities for understanding the birth of new towns, the spatial distribution of economic activity, and structural transformation.