Get Ready: State-Owned Sugar Factories to Be Merged, Here Are the Impacts
A major step is being prepared by the Badan Pengelola Investasi Daya Anagata Nusantara (Danantara) to consolidate the national sugar industry. This goes beyond merely merging businesses from around 61 factories; Danantara aims for comprehensive improvements, from factory quality to industry governance, as the foundation for long-term transformation.
Danantara’s Chief Operating Officer (COO), Dony Oskaria, revealed that the consolidation of sugar factories will be completed soon and will serve as the starting point for major overhauls.
“This month, we will finalise the consolidation of our sugar factories, so they will be under one company. Then, we will improve their quality, including upgrades to the factories themselves. This way, productivity will improve even further,” Dony said when met at the Parliamentary Complex in Jakarta on Wednesday (8/4/2026).
He highlighted that most national sugar factories are currently old and lack updates. Therefore, consolidation is not the end goal but an entry point for industry modernisation.
“Because our sugar factories have been around for a long time and have never received updates,” he stated.
Once the merger is complete, Danantara will immediately focus on overhauling the quality and operational governance of the sugar factories comprehensively.
“With Danantara in place, after consolidation, we will carry out quality improvements to our factories. Hopefully, this will benefit all Indonesians,” he said.
This transformation is being carried out through the merger of two state-owned sugar businesses. Danantara will combine the sugar factories of PT Rajawali Nusantara Indonesia (Persero) or ID Food with PT Sinergi Gula Nusantara (SGN), targeting completion in the second half of 2026.
Dony emphasised that this step is part of a broader strategy to reorganise the industry, not just administrative restructuring.
The two main state-owned sugar players currently are SugarCo under SGN and the sugar factories of ID Food. Both will be merged to become more efficient and avoid operating independently.
Going forward, SGN will be focused as the national sugar production engine, while ID Food transforms into a distribution and trading player.
“So, we are deliberately doing this so they can focus on their respective core businesses,” Dony explained.
This consolidation step also addresses various chronic problems in the national sugar industry, from leakages of imported refined sugar into the consumer market to price pressures from imports that make domestic products hard to compete.
With this new model, the government targets the formation of a giant sugar holding that can dominate the domestic market.
“The consolidation of PT SGN or SugarCo with ID Food will be completed this year. Insha Allah, in the second semester, we will finalise the consolidation. Thus, we will have a single sugar factory holding that controls 60% of the total market share in Indonesia,” he revealed.
ID Food’s President Director, Ghimoyo, explained that his company’s role will be focused as the offtaker and national sugar distributor.
“So, we hand over the factories, SGN hands over the products for us to sell because we will be heading towards a state-owned trading company, so we can control around 47% of the national market share,” Ghimoyo said during a Working Meeting with Commission VI of the House of Representatives (DPR RI).
Meanwhile, the President Director of Holding Perkebunan Nusantara PTPN III (Persero), Denaldy Mulino Mauna, added that the merger process has now entered its final stage.
“Indeed, the plan to merge the sugar factories with ID Food is already in the completion stage,” he stated.
He added that the process is just awaiting finalisation of administration and shareholder approval before official execution.