In the next five years, Indonesia needs to build up 15 new sugar factories to meet the demand for refined sugar in the domestic food and beverage industry, and set to produce 3.8 million tons of sugar in 2020.
It is reported by The Agriculture Ministry that has projected domestic consumption of 6.5 million tons of sugar this year, consisting of 2.8 million to 3 million tons in household consumption and another 3.7 million tons to fulfill the demands of the food and beverage industry.
Previously, National sugar production has been declining steadily since 2015 due to shrinking sugarcane farming areas, which decreased by an average 3.42 percent per year from 477,123 ha in 2015 to 414,847 ha in 2018, while production decreased from 2.58 million tons in 2015 to 2.17 million tons in 2018.
Andi Amran Sulaiman, The Agriculture Minister of Indonesia, said that “We have to build 10 to 15 new sugar factories in the next five years. If this is realized, we will achieve self-sufficiency in sugar production, and increasing domestic sugar production which is an important government program. Moreover, Indonesian president, Joko Widodo, have been urging the private sector to build 10 new sugar factories during his first term in office. ”
He added that the plan to build 10 factories has been realized. We could previously produce only 2.5 million tons of sugar and were short 300,000 to 500,000 tons. The new factories will produce an additional 1 million tons.”
These 10 new sugar factories are located in East Java, South Sumatra, Southeast Sulawesi East Nusa Tenggara and other provinces. The ministry has set an ambitious target to produce 3.8 million tons of sugar in 2020 with the operation of the 10 new factories, a 72.73 percent increase from about 2.2 million tons this year.
The new sugar factory in the area of Blitar required Rp 3 trillion (US$212.59 million) in investment to build. It is the first in the region and belongs to PT Rejoso Manis Indo (RMI).
Syukur Iwantoro, president director of IRM, said that the factory had a production capacity of 10,000 tons of cane per day (TCD) and could double its grinding capacity to a maximum 20,000 TCD.
Operating at a grinding capacity of 10,000 TCD, the Blitar factory can produce 800 to 1,000 tons of sugar per day to contribute 120,000 to 150,000 tons per year to national sugar production, assuming 150 operating days per year.
“The production capacity of the machines in our factory can double to 20,000 TCD, but we are still focusing our efforts to meet the 10,000 TCD target in 2020,”
He added that the company was using imported equipment, including a sugar grinding machine from Australia and a sugar boiler from India, and need sugarcane plantations at least 20,000 hectares to meet its raw material need.
The company was cooperating with several Local Forest Community Groups (LMDH) to manage idle forest lands, as several LMDH have more than 12,000 hectares of forest lands ready to be used in growing sugarcane, and also ready to procure superior seed cane from Thailand.
Therefore, Indonesia’s sugar is produced by 48 factories belonging to state-owned enterprises (SOE) and 17 private sugar manufacturers, and the trade ministry has set an import quota of 2.8 million tons of raw sugar to meet the industry’s needs.