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102602
Tue, 01/26/2010 - 09:14
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News Focus: GROWING DOMESTIC NEED PROMPTS SUGAR INDUSTRY REVITALIZATION
By Andi Abdussalam
Jakarta, Jan 25, ANTARA) - To keep up with increasing domestic demand for sugar from food and beverage industries as well as households, the government plans to revitalize sugar mills and expand the overall sugar cane cultivation area. Domestic need for the commodity is estimated to rise from about 4.9 million tons at present to 5.7 million tons in 2014.
"There are 32 new investors who have pledged to build new sugar mills. And for them we will make available 500,000 hectares of land and thus expand the sugar cane cultivation acreage," Industry Minister MS Hidayat said here on Monday.
Not only hoseholds but also food and beverage industries were experiencing increasing need for sugar. In in 2008 alone, food and sugar industries had grown 27 percent with investment in the sector in 2009 reaching Rp530 trillion. Overall domestic need for sugar will reach 5.7 million tons in 2014.
In the face of the increasing need, the Minister of Industry, Minister of Forestry, and the Minister of Agriculture will sign a Memorandum of Understanding (MoU) on the allocation of 500,000 hectares of land for the construction of 10 sugar mills over the next five years.
"On Monday, I myself, the Minister of Forestry, and the Minister of Agriculture will sign the MoU under which 500,000 hectares of land will be provided for sugarcane cultivation," MS Hidayat said.
Some of the plots of land will be located in Lampung, South Sumatra and Jambi provinces. "I believe that in the next five years the ten sugar mills will be built by PT Perkebunan Nusantara and private enterprises," he said. Many circles, including Chinese investors, are interested in investing sugar mill development in Indonesia.
According to the minister, there were 32 investors who had expressed a commitment to build new sugar mills in order to meet the need for sugar which is estimated to reach 5.7 million tons per annum in the coming five years.
"There are 32 new investors who have expressed a commitment to construct new sugar mills," MS Hidayat said adding that in order to support the plan the Ministry of Forestry would provide 500,000 hectares of land in Lampung, South Sumatra and Sulawesi.
"Actually we only need 300,000 hectares, but it seems that the forestry ministry will provide 500,000 hectares, of which about 400,000 hectares are already available," he said.
But the minister admitted he could not yet make an estimate on the amount of funds the 32 investors would need to set up sugar cane plantations on the 500,000 hectares of land.
The government through the Ministry of Agriculture has set a participation funding post in the state budget for a sugar cane revitalization program but several state-owned firms (BUMNs) have proposed other funding options beyond the participation funding scheme.
According to the industry minister, at present there are 51 sugar mills in the country, of which 41 are owned by BUMNs and 10 by private companies.
But according to Corporate Secretary of state-owned plantation firm XI (PTPN XI) Adig Suwandi, in 2009 there were sugar 60 factories.
In the meantime, chairman of the Indonesian Food and Beverage Industries Association (Gapmmi) Thomas Darmawan said the construction of sugar mills will need at least 40,000 hectares of land. "Except for refined sugar factory, it will need a smaller size of land," he said.
The growth of food and drink industries continues to experience an upward trend every year. In 2008, these industries grew by 27 percent while the value of their investment in 2009 reached Rp530 trillion.
Thus, Thomas predicted that food and beverage industries in Indonesia this year could reach 12 percent and that would boost the need of industries for refined sugar to increase to about 15 percent.
At present refined sugar production almost reach 2 million tons. In 2010, refined sugar production should increase by at least five percent because the need for this commodity of food and beverage industries will also increase.
"Refined sugar production should at least reach 2,2 million tons," M Yamin Rachman, executive director of the Indonesian Refined Sugar Producers Assocaition (Agri), said meanwhile.
The increase in the need for refined sugar is also being boosted by the need for the commodity of small-scale food and drink firms which have begun turning to refined sugar which is considered good for improving their product quality.
It was earlier reported that the government had to import sugar to increase its sugar stocks for the domestic need in the first months of this year.
Basically, sugar producers grouped in the AGRI are ready to back up supply of consumption sugar if its importation is difficult to carry out when the price in the world market is high, the AGRI director said.
"If the government is willing to ask for it from us, we can accelerate production and increase its volume to back up white crystal sugar supply but we need additional raw sugar quota," Yamin Rahman said.
He said that AGRI with eight members was able to produce about 2.7 million tons of refined sugar but the need for sugar of food and drink industries this year was predicted at 2.2 million tons.
"Thus we still have remaining stock amounting to 500,000 tons and this could be used to back up sugar for consumption stocks. So, there is no need to import white crystal sugar," he said.
However, he said, AGRI would need additional allocation for importing raw sugar. This year, AGRI`s allocation for sugar import stood at 2.21 million tons, of which 1.055 million tons to be imported in the first semester of 2010 and the remaining ones in the second semester.
Rahman said that if the government assigned AGRI to supply consumption sugar, it would finish processing its raw sugar stocks in April.
Therefore, AGRI asked the government to increase allocation for the importation of raw sugar in order to fill in its idle capacity in the May-June 2010 period, he said.
Jakarta, Jan 25, ANTARA) - To keep up with increasing domestic demand for sugar from food and beverage industries as well as households, the government plans to revitalize sugar mills and expand the overall sugar cane cultivation area. Domestic need for the commodity is estimated to rise from about 4.9 million tons at present to 5.7 million tons in 2014.
"There are 32 new investors who have pledged to build new sugar mills. And for them we will make available 500,000 hectares of land and thus expand the sugar cane cultivation acreage," Industry Minister MS Hidayat said here on Monday.
Not only hoseholds but also food and beverage industries were experiencing increasing need for sugar. In in 2008 alone, food and sugar industries had grown 27 percent with investment in the sector in 2009 reaching Rp530 trillion. Overall domestic need for sugar will reach 5.7 million tons in 2014.
In the face of the increasing need, the Minister of Industry, Minister of Forestry, and the Minister of Agriculture will sign a Memorandum of Understanding (MoU) on the allocation of 500,000 hectares of land for the construction of 10 sugar mills over the next five years.
"On Monday, I myself, the Minister of Forestry, and the Minister of Agriculture will sign the MoU under which 500,000 hectares of land will be provided for sugarcane cultivation," MS Hidayat said.
Some of the plots of land will be located in Lampung, South Sumatra and Jambi provinces. "I believe that in the next five years the ten sugar mills will be built by PT Perkebunan Nusantara and private enterprises," he said. Many circles, including Chinese investors, are interested in investing sugar mill development in Indonesia.
According to the minister, there were 32 investors who had expressed a commitment to build new sugar mills in order to meet the need for sugar which is estimated to reach 5.7 million tons per annum in the coming five years.
"There are 32 new investors who have expressed a commitment to construct new sugar mills," MS Hidayat said adding that in order to support the plan the Ministry of Forestry would provide 500,000 hectares of land in Lampung, South Sumatra and Sulawesi.
"Actually we only need 300,000 hectares, but it seems that the forestry ministry will provide 500,000 hectares, of which about 400,000 hectares are already available," he said.
But the minister admitted he could not yet make an estimate on the amount of funds the 32 investors would need to set up sugar cane plantations on the 500,000 hectares of land.
The government through the Ministry of Agriculture has set a participation funding post in the state budget for a sugar cane revitalization program but several state-owned firms (BUMNs) have proposed other funding options beyond the participation funding scheme.
According to the industry minister, at present there are 51 sugar mills in the country, of which 41 are owned by BUMNs and 10 by private companies.
But according to Corporate Secretary of state-owned plantation firm XI (PTPN XI) Adig Suwandi, in 2009 there were sugar 60 factories.
In the meantime, chairman of the Indonesian Food and Beverage Industries Association (Gapmmi) Thomas Darmawan said the construction of sugar mills will need at least 40,000 hectares of land. "Except for refined sugar factory, it will need a smaller size of land," he said.
The growth of food and drink industries continues to experience an upward trend every year. In 2008, these industries grew by 27 percent while the value of their investment in 2009 reached Rp530 trillion.
Thus, Thomas predicted that food and beverage industries in Indonesia this year could reach 12 percent and that would boost the need of industries for refined sugar to increase to about 15 percent.
At present refined sugar production almost reach 2 million tons. In 2010, refined sugar production should increase by at least five percent because the need for this commodity of food and beverage industries will also increase.
"Refined sugar production should at least reach 2,2 million tons," M Yamin Rachman, executive director of the Indonesian Refined Sugar Producers Assocaition (Agri), said meanwhile.
The increase in the need for refined sugar is also being boosted by the need for the commodity of small-scale food and drink firms which have begun turning to refined sugar which is considered good for improving their product quality.
It was earlier reported that the government had to import sugar to increase its sugar stocks for the domestic need in the first months of this year.
Basically, sugar producers grouped in the AGRI are ready to back up supply of consumption sugar if its importation is difficult to carry out when the price in the world market is high, the AGRI director said.
"If the government is willing to ask for it from us, we can accelerate production and increase its volume to back up white crystal sugar supply but we need additional raw sugar quota," Yamin Rahman said.
He said that AGRI with eight members was able to produce about 2.7 million tons of refined sugar but the need for sugar of food and drink industries this year was predicted at 2.2 million tons.
"Thus we still have remaining stock amounting to 500,000 tons and this could be used to back up sugar for consumption stocks. So, there is no need to import white crystal sugar," he said.
However, he said, AGRI would need additional allocation for importing raw sugar. This year, AGRI`s allocation for sugar import stood at 2.21 million tons, of which 1.055 million tons to be imported in the first semester of 2010 and the remaining ones in the second semester.
Rahman said that if the government assigned AGRI to supply consumption sugar, it would finish processing its raw sugar stocks in April.
Therefore, AGRI asked the government to increase allocation for the importation of raw sugar in order to fill in its idle capacity in the May-June 2010 period, he said.
