Bagasari says threre is room for new players

JAKARTA (JP): PT Bogasari Flour Mills, which has had a monopoly over flour production in Indonesia, welcomed yesterday the entry of new players in the flour market.

PT Bogasari president Sudwikatmono said the company, which is a subsidiary of the Salim Group's publicly listed Indofood Sukses Makmur, did not have any expansion plans and this would provide room for the new producers.

The new companies entering the flour market are PT Berdikari, Danimitra group, Indorama Nusantara and Citra Lamtoro Gung, which is owned by President's eldest daughter Siti Hardijanti Rukmana.

PT Berdikari, based in Ujung Pandang, South Sulawesi, can produce 1,400 tons a day and plans to lift this to 4,500 tons.

Danimitra Group, chaired by the former chairman of National Logistic Agency Bustanul Arifin, has a flour plant in Semarang, Central Java, which can produce 1,000 tons a day.

PT Indorama Nusantara and PT Citra Lamtoro Gung can each produce 1,000 ton a day. PT Citra's plant is in Cilacap, Central Java.

Sudwikatmono said his company had no problem with the presence of the new firms.

"Bogasari does not want to be labeled monopolistic," he said.

Bogasari has a plant in Tanjung Priok, North Jakarta, which can produce 9,500 tons a day and another in Surabaya, East Java, which can produce 5,500 tons a day.

The firm's total installed capacity is 4.575 millions tons a year.

"The domestic demand for flour is between 10 percent and 12 percent per annum," he said.

The new producers are expected to meet this increased demand.

Overseas

He said although Bogasari would not expand in the domestic market, it planned to expand its operation in China and start up in Vietnam.

The company's flour plant in China can produce about 200,000 tons a year.

Sudwikatmono declined to say how much it had spent on its China plant.

He said the company entered China through First Pacific, Salim Group's Hong Kong arm.

"China has huge potential and virtually unlimited demand for flour," he said.

He said Bogasari was conducting a market survey in Vietnam and if the results were good it would build a flour plant.

Sudwikatmono was speaking after the inauguration of the company's Milling Training School at its Tanjung Priok plant.

The US$4.5 million (Rp 10.6 billion) training school was opened by the Director of General of Agricultural and Forestry Product of Industry and Trade Ministry, Sujata.

Sujata said the increasing demand for flour in the domestic market had brought about a steady increase in wheat imports.

In 1996, Indonesia imported four million tons of wheat seed, up from 3.7 million ton of wheat seed in 1995. (09)