Govt allocates land for sugar investors in Lampung

Govt allocates land for sugar investors in Lampung

Rendi A. Witular, The Jakarta Post/Beijing

To make the country self-sufficient in sugar production, the
government has provided some 200,000 hectares of land in Lampung
province for prospective investors.

The land is to replace some 500,000 hectares of land in
Merauke, Papua, initially allocated by the government for sugar
investors, Minister of Agriculture Anton Apriyantono told The
Jakarta Post during a trip to Beijing earlier this week.

"The government is still preparing necessary investment
infrastructure in Merauke, and that will take some time. For the
time being, businessmen willing to invest in this sector can open
up plantations and processing plants in Lampung," he said.

Anton said several local consortiums had shown their interest
in setting up sugar plantations and processing plants in Lampung
this year, but he declined to give names.

The country would produce some 2.2 million tons of sugar this
year with consumption expected to stand at 3.32 million tons, the
minister said.

To offset higher domestic consumption, the country is
importing some 1.12 million tons of sugar this year.

The agriculture ministry has estimated domestic sugar output
will increase slightly to 2.44 million tons next year, while
consumption is projected to rise to 3.37 million tons.

In 2007, sugar production is estimated to reach 2.68 million
tons, with consumption at 3.42 million tons.

"Domestic sugar production is getting higher each year. But we
want to accelerate it (production), so that we can become self
sufficient by 2009," said Anton, adding that the ministry was in
the process of providing incentives for sugar investors.

The government has recently signed an agreement with the
Chinese government and the private sector for a feasibility study
into the development of the country's sugar industry towards
self-sufficiency.

Elsewhere, Anton said during the Beijing's trip with Vice
President Jusuf Kalla, the government had managed to secure an
investment deal worth hundreds of millions of dollars from the
China International Trust and Investment Corp. (CITIC).

The investment would be allocated to develop the integrated
oil palm plantations and their processing facilities, which would
run along the border with Malaysia in Kalimantan, he said.

The establishment of the plantation -- which will start
producing by 2010 -- and its supporting industry is estimated to
cost approximately Rp 5.5 trillion (some US$567 million) over the
next five years.

The government will initially focus on developing the
plantations in several regencies including Sambas, Bengkayang,
Sintang and Sanggau in East Kalimantan, and in Kapuas in Central
Kalimantan.