'Let government solve wheat issue'

'Let government solve wheat issue'

Bogor, West Java (JP): Sudwikatmono, president of PT Indofood
Sukses Makmur, said here yesterday that he will not get involved
in the current wheat trading debate and will let the government
deal with the issue.

"Everything is in the government's hands. We can say nothing
about this issue as we are only the party carrying out the
government's policy," Sudwikatmono said, responding to questions
about the suspected subsidy arranged by the National Logistics
Agency (Bulog) for PT Bogasari Flour Mill.

Now an affiliate of Indofood, the country's largest food-
product manufacturer, Bogasari was appointed by the government,
together with state-owned PT Berdikari Sari Flour Mill in
Ujungpandang, South Sulawesi, to process wheat grain into flour.
Bogasari practically holds a monopoly in wheat milling
domestically as it also controls the management of Berdikari's
flour milling plant.

Bogasari gets wheat from Bulog, which monopolizes the
importation and distribution of wheat and other agricultural
products, and pays the agency after its products are marketed.

According to the Institute for Development of Economics and
Finance (Indef), Bulog imports wheat at Rp 418 (18 U.S. cents)
per kilogram but sells it at only Rp 141 per kilo to Bogasari.
Bulog then buys Bogasari-produced flour at a factory price of Rp
616. Under that mechanism, Indef suspects that Bulog has been
subsidizing Bogasari.

Bulog's chief, Beddu Amang, confirmed Indef's figures.
However, he rejected allegations that his agency subsidizes
Bogasari, saying that the wheat price charged to Bogasari was a
fixed price set to help stabilize the market, no matter how much
prices fluctuate on the international market.

In addition, Beddu said, the flour factory price of Rp 616 per
kilo includes the Rp 256 per kilo margin fund collected from
flour distributors.

Sudwikatmono, who is also president of the country's largest
cement producer, PT Indocement Tunggal Prakarsa, which formerly
owned Bogasari, declined to disclose Bogasari's financial
structure.

"If I give you my figures, I'm afraid they would differ from
what Bulog has. So, just wait until Bulog has a hearing with the
House of Representatives. Bulog will explain everything,"
Sudwikatmono said at the presentation of a zero-accident award by
Minister of Manpower Abdul Latief to the paper bag division of
Indocement Tunggal Prakarsa.

Sudono Salim, founder and chairman of the Salim Group which
controls Indocement and Indofood, was also present at yesterday's
award presentation. (rid)