Plan to relocate sugar mills opposed

JAKARTA (JP): The government's plan to relocate its sugar industry to outside Java is not realistic, industry figures have said.

The director of sugar mill PT Sweet Indolampung, Daddy Hariadi, said over the weekend that moving half of Java's 54 sugar mills would require at least 300,000 hectares of land for sugar cane plantations and construction of the mills.

"It will be very difficult to find 300,000 hectares of land outside Java that is suitable for sugar cane plantation," he said.

A sugar cane plantation needs to be at a certain altitude and with a certain humidity, have a sufficient supply of water and thick, fertile topsoil.

"If, for instance, the government successfully finds such suitable land, it may not be feasible given the distance from sugar consumers in Java," he said.

Gunawan Sukarso, Director of the Indonesian Sugarcane Plantations Research Center (P3I) echoed Daddy's view, saying that moving the sugar cane industry off Java would be very costly.

"A sugar mill with production capacity of 120,000 tons of sugar annually has to be supported by 20,000 hectares of sugar cane plantations. It will need investment of around US$150 million," he said.

Gunawan said it would be better if the government closed the inefficient sugar mills on Java and restored and upgraded the other sugar mills and sugar cane plantations to make them work more efficiently.

"It will be easier and cheaper to rehabilitate Java's sugar mills rather than to relocate them to outside Java," he said.

The government's plan to move the local sugar industry away from Java was announced by Minister of Industry and Trade Rahardi Ramelan earlier this year.

Rahardi blamed the in inefficient production of Java mill for locally made sugar failing to compete with imported sugar.

"Most sugar mills on Java are very old and are no longer economically viable. They also are not supported by productive sugar cane plantations," he said.

Some of the mills on Java are state-owned and equipped with machinery dating back to colonial times, making them far less productive than those of other companies, he said.

Rahardi said increased production could only come from plantations outside of Java where more land was available.

He said there currently are eight sugar refineries outside Java with sugar production around 500,000 metric tons a year.

Chairman of the Indonesian Sugar Association (IGA) Farukh Bakri told The Jakarta Post on Friday that according surveys, there are 2 million hectares of land in Eastern Indonesian provinces that are suitable for the sugar industry.

There are 800,000 hectares of land in Irian Jaya, 816,000 hectares in Maluku, 198,000 hectares in Central Kalimantan and another 190,000 hectares in East Timor that could be planted with sugarcane, he said.

"But it will need further studies to see whether or not it will be economically viable to develop the sugar industry in those areas," he said.

Domestic sugar consumption is expected to reach 3.1 million tons, of which 1.7 million tons will be produced locally. (gis)