Friday, January 29
Alfian , The Jakarta Post
As many as 32 investors plan to develop new sugar plantations and mills in several provinces, representing a total investment of Rp 24.3 trillion (US$2.6 billion), a minister has said.
“Most of them are domestic investors,” Industry Minister M.S. Hidayat told reporters Thursday.
Hidayat said the planned mills would be located in several provinces including in Riau, Jambi, Lampung, West Java, Central Java, East Java, East Nusa Tenggara, West Nusa Tenggara, West Kalimantan, South Sulawesi, South East Sulawesi, and Papua.
“The mills will require about [an additional] 500,000 hectares,” Hidayat said.
He added that the proposed mills would have a combined processing capacity of 163,000 tons of sugar cane per day. “There will be between 10 and 25 new mills depending on processing capacity,” Hidayat said.
The investors are now asking the government to provide incentives, including tax concessions on land and infrastructure, subsidies on bank interest rates, and income tax reductions. “We are still discussing these matters,” Hidayat said.
Indonesia is the largest sugar buyer in Southeast Asia with total domestic demand (household and industrial) reaching about 4.8 million tons a year.
“So far domestic production can only meet the needs for household sugar consumption, but industrial consumption is still supplied by imports,” Agriculture Minister Suswono said.
Hidayat said demand for raw sugar for industrial use reached 2.15 million tons in 2009, while domestic production was only 1.9 million tons.
He added that demand for raw sugar for industrial use would reach 2.74 million tons by 2014.
Suswono said the domestic price of sugar was still high, because the world supply of sugar has fallen with Brazil now using much of its sugar cane to produce bio-fuel.
Deputy Trade Minister Mahendra Siregar said Indonesia would extend the importation of sugar. “We will continue with importing sugar until the price can be stabilized once again,” he said.
Jakarta Post
