Thai sugar firm hangs RI investment

Thai sugar firm hangs RI investment

SUPHAN BURI, Thailand (Reuters): Thailand's major sugar group Mitr Phol Sugar Corp said yesterday it had decided to suspend investment in a sugar mill in troubled Indonesia.

Isara Vongkusolkit, the company's president, told Reuters that a liquidity squeeze in Thailand and an unsettling economic situation in Indonesia had forced it to suspend plans to build a 3,000 tons/day sugar mill in that country.

"In view of current circumstances, we chose to suspend the sugar refinery mill project in Indonesia," Isara said while declining to give the value of the project.

"On a local front, we have no plan to expand capacity either. It is quite difficult to do any thing now. This year, we will focus our effort on improving human resources and efficiency," he said.

Mitr Phol group operates four of 46 registered sugar mills in Thailand with combined capacity of 80,000 tons per day.

But Mitr Phol's project in Vietnam would go on as scheduled, he said. The company, together with a local fund, hold a 25 percent stake in a 6,000 tons/day sugar mill in Nghe An province in central Vietnam. Tate & Lyle is another partner.

"The sugar mill in Nghe An will be on-stream in November or December this year, as scheduled," he added.

The company also has joint ventures in four sugar mills in China's southern province of Guangxi which are intended to supply sugar for domestic consumption. The four mills can process 22,000 tons of sugar cane per day.

"We won't make any profit this year in China as local prices are low but the sugar cane price was a bit too high. Nevertheless, the longer term prospect is quite good," Isara said.