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.