Investors invited to build sugar mills outside Java

Investors invited to build sugar mills outside Java

JAKARTA (JP): Chairman of the National Logistics Agency (Bulog) Beddu Amang enticed both domestic and foreign investors Saturday to take advantage of the government's plan to set up 15 new sugar mills outside Java in the next few years.

"I challenge both local and foreign investors to take part in the establishment of new sugar factories," he said after delivering his speech at the University of North Sumatra in Medan.

Beddu said the planned 15 sugar mills would be located in Sulawesi, East Timor, Kalimantan and on Seram island in Maluku and possibly other parts of the country such as North Sumatra, South Sumatra and Lampung provinces.

Java, the country's main sugar producing area, is no longer a suitable location for new sugar mills as productive land to accommodate sugar cane plantations is no longer adequate, he said.

At present there are 69 sugar mills, 58 of which are in Java, with a combined processing capacity of around 2.75 million tons of cane per day.

Beddu said that 27 of the 58 sugar factories in Java are no longer efficient due to their out-dated technology.

"The 27 high-cost sugar factories will be gradually scrapped...their sugar plantations will be transferred to more productive sugar mills," he said.

Beddu said earlier that this year's sugar production is expected to reach 1994's level of 2.5 million tons. Last year, sugar production dropped by around 14 percent owing to bad weather.

This year, Indonesia imported around 137,000 tons of sugar in January and around 20,000 tons in February to meet the surge in the domestic consumption during the period.

Imports reached 400,000 tons last year.

According to earlier reports, the Salim Group, which currently operates two sugar mills in Lampung, is constructing four more mills in the province to boost the business group's sugar production.

The group is to invest Rp 1.65 trillion ($750 million) in the four planned sugar mills, which will be designed to have a combined processing capacity of 62,000 tons of sugar cane per day. (hen)