Plan to relocate sugar mills opposed

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)