A yet-to-be finalized arrangement will have four companies producing refined sugar for industry needs and five producing for direct consumption, said Achmad Mangga Barani, the ministry’s director general of plantations. He did not mention the total value of the investment, saying the companies still needed to verify land quality and confirm the areas were not held under traditional title.
The companies may seek to occupy more than 114,000 hectares, but at this stage the government has only offered 90,000 hectares, according to the ministry’s Web site. The Bogor Institute of Agriculture, or IPB, and the Indonesian Sugar Research and Development Center, or P3GI, have identified 90,000 hectares of potential land for sugar cane plantations in West Papua Province, projected to produce sugar cane with 13 percent sugar content, far higher than the national average of 8.2 percent.
“These companies showed interest in building their own plantations to support raw material for their refined sugar industries,” Achmad told the Jakarta Globe on Sunday. The four refined sugar companies are PT Sugar Labinta, PT Makasar Te’ne, PT Dharmapala Usaha Sukses and PT Duta Sugar International. The sugar firms that will plant sugar for direct consumption are PT Industri Gula Nusantara, PT Pemuka Sakti Manis Indah, PT Semesta Berjaya, PT Bina Muda Perkasa and PT Wilmar, he said.
In 2008 alone, Indonesia had to import about 1.4 million tons of raw sugar, mostly from India, to support the refined sugar industry, senior officers at ministry said.
The country would need at least 150,000 hectares of land to be able to produce 1.8 million tons of raw sugar for industrial purposes. That amount is the country’s target of self-sufficiency it hopes to reach by 2014.
The Directorate General of Plantation said that Sugar Labinta will cooperate with state plantation company PT Perkebunan Nusantara VIII, or Persero; while PT Makasar Te’ne will cooperate with PT Perkebunan Nusantara XIV to run the plantations.
M Yamin Rachman, chairman of the Indonesian Refined Sugar Association, or AGRI, said on Sunday that all eight of its members had responded positively and that AGRI would officially reply to the government’s invitation today.