Taiwanese agriculture firms to relocate to Indonesia

TAIPEI (JP): Several Taiwanese agriculture-processing companies are looking for opportunities to relocate their plants to Indonesia, visiting Industry and Trade Minister Rahardi Ramelan said on Saturday.

Rebar Group-Chia Shin Food and Synthetic Fiber Co., Ltd., which operates cooking oil factories, flour mills and processing plants for other commodities, plans to move its plants to Indonesia to follow the Taiwanese government's "southbound" policy.

The Taiwanese government, Rahardi said, has instructed Taiwanese companies involved in labor intensive and low- technology work to relocate their plants to other countries.

"The companies plan to move their cooking oil plants to Indonesia. They asked me which Indonesian province would be most suitable for them to develop their vegetable oil factories," he said after his meeting with Taiwanese food companies.

"So, I suggested they relocate to Medan, North Sumatra, because the area is the main producer of crude palm oil. They could develop a cooking oil company there using CPO produced in Medan and sell it to the domestic market," he said.

Leader's Coffee, a coffee packaging company, also plans to develop a factory in Indonesia.

"Leader's Coffee is not a big company, but its production, in terms of iced coffee products, supplies all fast food outlets in Taiwan," he said.

Leader's Coffee and Indonesian coffee exporter PT Gemilang Sentosa Permai signed an agreement in which Gemilang will export coffee to Taiwan to supply Leader's.

Gemilang's director Rudy Soekoyo said his company, based in Malang, East Java, would deliver 500,000 tons of coffee beans and processed coffee annually to the Taiwanese company.

"The amount is quite large because it accounts for 20 percent of Taiwan's total coffee imports of 2.5 million tons annually. The coffee will be shipped gradually," he said.

He refused to state the value of the export contract.

Earlier last week, Gemilang also signed contracts to supply two Japanese coffee processing companies. Under the contracts, Gemilang will export 100 tons annually to the two Japanese firms.

Rahardi also said he had invited the Taiwan Sugar Federation to cooperate with its Indonesian counterpart in establishing joint sugarcane plantations in Sumatra and other areas in Indonesia.

"Sugar is highly protected in Taiwan, because the government wants to protect sugar farmers. However, Taiwan's sugar production is decreasing every year due to declining sugarcane plantation areas. On the other hand, domestic demand is increasing," he said.

Sugar produced by the proposed joint sugarcane plantations could be exported to Taiwan and sold to the domestic market, he said.

The molasses produced by the proposed joint sugar mills could also be sold to Taiwanese Monosodium Glutamate (MSG) producers, which are in short supply of molasses as an MSG raw material, he added. (gis)