'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)