RNI to Shut Down Two Sugar Factories in Cirebon
14 July 2014 18:48 WIB
TEMPO.CO, Jakarta - State-owned company PT Rajawali Nusantara Indonesia (RNI) said it would shut down its two sugar factories in Cirebon this year due to widespread refined sugar in traditional markets that causes losses to the factories.
“We sell our products to traders, but they don’t want to buy because they have bought the much cheaper refined sugar which is Rp500 per kg,” RNI president director told Tempo on Monday.
He said the condition made it hard for RNI’s sugar to compete with refined sugar. Moreover, the two factories that will be closed are hundreds of years old. In short, these factories are inefficient. “The costs rise eight to nine percent a year while growth is only one to two percent,” he said.
The company suffered losses of Rp120 billion last year for its five factories in West Java. This year, the losses are predicted to swell to Rp150 billion, making reduction of employees inevitable. “Paying severance is much more affordable,” he said.
He hoped the Trade Ministry focuses on this refined sugar problem as the ministry is deemed not committed to its work, causing national sugar farmers to lose competition with imported refined sugar. “What the ministry officials say is different to what is happening on field,” he said.
ANANDA PUTRI