PT Sampoerna Strategic, owned by conglomerate PT Putera Sampoerna, plans to invest $8 million to develop sago palm plantations spanning 20,000 hectares and build a sago mill in Selat Panjang, Riau, an official from the Forestry Ministry said on Sunday.
The mill set to open this year would produce sago starch, a raw material used to make noodles.
Hadi Daryanto, director general of forest industry development at the ministry, said the company already had 12,000 hectares of sago palm plantations in Riau.
“They only have to plant the remaining 8 million hectares - in total, they will manage 20,000 hectares of sago industrial forest.”
Sago starch is an extract of the sago palm tree, and is a major staple food for many people in eastern parts of the country, such as Papua and Maluku. Aside from direct consumption and being processed into noodles, sago can also be processed into biofuel, sugar, cosmetics and medicine.
“[Sampoera Strategic] cooperated with PT The Best One Uni Timber in Riau to run the industrial forest for a sago plantation in Riau,” Hadi said.
Sampoerna Strategic will invest about $5 million to build a sago mill, and $3 million to maintain the sago palm plantations.
Hadi said company representatives had already met the Foresrtry Minister M.S. Kaban on Friday to explain the plan to build a large-scale sago milling industry in Riau.
Hadi however, did not mention the factory's production capacity, but did say that it would begin operating this year.
The factory will initially produce sago starch only as a raw material for the sago noodle industry. In the long term, however, Hadi said Sampoerna would expand the factory to produce ethanol and medications from Sago.