GOVT TO DEVELOP INTEGRATED SUGAR INDUSTRY

By Andi Abdussalam

Jakarta, Dec 21 (Antara) - The government will develop integrated sugar industry to boost production and eventually free the country from dependence on sugar imports which so far still account for over 50 percent of total national needs.         "The government is formulating a road map for the development of the integrated sugar industry with the aim to meet domestic demand and to stop sugar imports," Trade Minister Rachmat Gobel stated on the sidelines of his working visit to Bangkok on Saturday.          The Ministry of Trade is preparing mid- and long-term strategies as part of efforts to support the development of the integrated sugar industry and to stop the import of the commodity, Minister Rachmat Gobel said.          In keeping with this purpose, the minister affirmed that he would cooperate with Industry Minister Saleh Husin and Agriculture Minister A. Amran Sulaiman to create the road map on the development of the country's integrated sugar industry to achieve food sovereignty in Indonesia.          The integrated sugar industry is expected to increase production and stop sugar imports.            However, Indonesia cannot stop importing sugar right away because national sugar production has yet to reach the mark where it can meet domestic demand independently, Gobel added.          Based on data at the ministry, the country's annual need for sugar totals 5.9 million tons. Of this, household consumption makes up 2.7 tons of the demand, the industries of food and drinks need 2.87 tons, the MSG industry requires 282 thousand tons, and the production of refined sugar needs 50 tons of the commodities.         Moreover, national sugar production in 2014 is only some 2.5 million tons, which is produced by 52 state-owned sugar mills and 10 sugar factories owned by private companies.         As the need for sugar reaches 5.9 million tons and domestic production stands at only 2.7 million tons, the government has to import some 3.5 million tons of sugar.          However, the government will issue sugar import permits only to companies developing sugar mills with the aim to meet domestic need, Rachmat Gobel said.         "So with sugar import limitations and regulations to boost the national sugar industry, the government supports the food sovereignty program," the minister affirmed.         Regulating sugar imports is among the policies that the government will take up, wherein it will only provide import permits to certain producer importers that are preparing to develop the national integrated sugar industry in Indonesia, he added.         "Those companies will only be issued permits to import sugar for 1 to 2 years until the factories they are building are ready to operate," the minister stated.          While imports are still carried out to meet the shortage of sugar need,  sugar mills must be developed to support the integrated sugar industry development, including revitalizing old sugar machines and expanding sugarcane plantation areas.          Vice President Jusuf Kalla has recently asked the Agriculture Ministry to revitalize the Indonesian Sugarcane Plantation Research Center (P3GI) to enable it to promote the living standard of sugarcane growers.          The center which was established in 1887 had not functioned as a modern sugar research institution, he said at the meeting hall of the Malang district administration in East Java on Saturday (December 6, 2014).          Kalla said that in order to increase sugar production and achieve sugar self-sufficiency, the government will build ten new sugar factories. "The plan to build 10 new factories is expected to help the country achieve its self sufficiency target," the Vice President said when visiting the Mojo Sugar Factory of state plantation company PT Perkebunan Nusantara IX, in Sragen, Central Java.          Kalla noted that most of the sugar refineries are no longer efficient, as their equipment is old and outdated. Therefore, new and more efficient factories with higher productivity are needed to reduce production costs, he said.          Therefore, old machine should be renovated.   According to Minister Rachmat Gobel, local sugar factories should be developed with the latest technology so they will be able to improve the quality of their milling capacity and absorb sugarcane from farmers.          The minister noted that each sugar industry will need some Rp1.5 trillion to revitalize their factories.          "With their development, sugar industries are expected to produce refined sugar using raw materials directly acquired from farmers besides supporting domestic food and beverage industries," the minister added.          He said that old sugar mills with low productivity are not the only obstacles to national sugar production; the shortage of land for sugarcane cultivation is also attributed as a hindrance.          "As part of efforts to achieve food sovereignty, particularly in sugar, Indonesia will need at least 700 thousand hectares of sugarcane plantations," the minister pointed out.           Based on data available at the trade ministry, sugarcane plantations in the country cover only some 460 thousand hectares.          "The government now allows the importation of only raw sugar. So white sugar (for consumption) and refined sugar (for the industries of food and beverages) industries at home will develop," Gobel explained.           However, the ministry's mid- and long-term policies will be aimed at reducing sugar imports in stages and stopping it altogether eventually, after sugar industries are integrated to meet the need at home.          "In the future, we have to have integrated sugar factories and stabilize its stock and price at home. Indonesia has to own integrated sugar industries," Gobel stressed.          The efforts to develop integrated sugar industry and to meet domestic demand are in line with President Joko Widodo's program of food self-sufficiency.          State-owned Enterprises (SOE) Minister Rini Soemarno said  efforts to achieve self-sufficiency in sugar production have to be made because sugar is one of the several food products President Joko Widodo's government has targeted for Indonesia to be self-sufficient in the next three to five years.          Other food products targeted for self-sufficiency include rice, soybean, maize, and meat.          The minister admitted that the nation's sugar mills were primarily old.  Although the number of sugar mills is relatively large, with about 60 factories, yet they are not operating at full capacity because their equipment is outdated.          "Revitalizing them will need investment. We can make this investment only if the goals and stages of progress of the revitalization plan are clear," the SOE minister stated.          So, when integrated sugar industry is created and its production is able to meet domestic demand, then imports of sugar could be stopped.***2*** (T.A014/f001  ) (T.A014/A/A. Abdussalam/F. Assegaf) 21-12-2014 16:15:4