State-Owned Enterprise Hoped to Develop Refined Sugar Plant

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  • Ilustrsi pabrik gula. ANTARA/Andreas Fitri Atmoko

    Ilustrsi pabrik gula. ANTARA/Andreas Fitri Atmoko

    TEMPO.CO, Jakarta - State-owned enterprise Rajawali Nusantara Indonesia (RNI), has proposed to the Ministry of Industry to develop a refined sugar plant. The proposal was delivered due to the fact that the company has been suffering losses from the high import volume of refined sugar.

    "The high import volume of refined sugar cost us to lose Rp 300 biliion [around US$ 26.2 million] this year," said CEO of RNI Ismed Hasan Putro, on Monday, October 13, 2014.

    Ismed said that the planned refined sugar plant will have a production capacity of 2,500 TCD (tons of cane per day), with a total investment value of Rp 1 trillion (around US$ 87.4 million). If the permit is approved by the government, RNI planned that the development of the plant will begin next month. Around 60 to 70 percent of RNI's refined sugar production will be allocated for the export market. "The rest will be for domestic use," he said.

    As a result of the government's policy on refined sugar import, around 200,000 tons of RNI and 1 million tons Perkebunan Nusantara's sugar is having trouble to compete with imported sugar in the domestic market. "This is because the imported refined sugar, which entered the country, cost less," said Ismed.

    Arum Sabil, Head of the Sugar Cane Farmers Association of Indonesia, said that the government should have calculated everything before deciding to import refined sugar. "[The import] suppresses the sugar produced by farmers," she said on Monday.

    She also said that the government no longer needs to import sugar because the domestic production of sugar is already sufficient. Last year, the domestic sugar production reached 2.5 tons, which means that only 1.4 million tons of sugar is required for national consumption.

    AMIR TEJO | YOLANDA RYAN ARMINDYA | PRIO HARI KRISTANTO