East Java governor rejects plea to relocate sugar factories

East Java governor rejects plea to relocate sugar factories

Ainur R. Sophiaan, The Jakarta Post, Surabaya

East Java Governor Imam Utomo has rejected a plea by the central
government to relocate a number of loss-making sugar factories to
other provinces.

"The proposal was unrealistic as East Java supplied 45 percent
of the country's domestic demand for sugar," the governor told
reporters after a meeting with sugar producers throughout the
province on Friday.

He said the proposal was initially raised by then minister of
industry and trade Rahardi Ramelan during the presidency of
Abdurrahman Wahid. The proposal was renewed by incumbent Minister
of Industry and Trade Rini M.S. Soewandi.

The central government's proposal has drawn complaints by
local sugar farmers, who fear possible difficulties in marketing
their products if the factories were relocated to other
provinces.

Currently, there are a total of 33 sugar plants in operation
throughout the province, scattered in the regencies of Pasuruan,
Probolinggo, Sidoarjo, Nganjuk and Mojokerto.

Imam did not mention the number of sugar plants suffering the
financial losses. However, sources said it was nearly half of the
total figure.

The governor said that it would not be that easy to move the
sugar plants as there were certain requirements to meet before
they could proceed with the relocation.

"There must be a feasibility study on the appropriateness of
the new locations and the availability of sugar farmers to
support the operation of the new factories," he said.

He admitted that some of the factories still suffered losses
due to increasing operational and production expenditure.

"The factory owners have to take the necessary steps to cut
expenditure. We (the East Java administration) will also help
them to recover," the governor said.

He said his administration was now taking an inventory on
problems that the sugar plants have, including their financial
status and the quality of their products.

Commenting on the increasing presence of imported sugar in
East Java, the governor said the administration would maintain
the policy of banning the sale of imported sugar in the province.