ASEAN KEY DESTINATIONS
State companies to boost sugar output over high demand
Indonesia: The government, through a number of state-owned companies, aims to increase sugar production by up to 20 percent to meet domestic sugar demand that tops 5.7 million tons.
National sugar production reached 2.5 million tons in 2013, 1.5 million tons of which was produced by state-owned companies.
This year, the state-owned companies are hoping to improve output to 1.8 million tons.
“The country’s sugar production is stagnant. We must increase [production] in 2014,” State-Owned Enterprises Minister Dahlan Iskan said during a recent meeting attended by state-owned sugar production companies in Surabaya, East Java.
The meeting assessed achievement in 2013 and prepared for programs this year.
National demand for sugar in 2014 is estimated to reach 5.7 million tons, but domestic sugar production in 2013 was only 2.5 million tons.
Dahlan said that last year’s weather pattern had been abnormal and sugar production was therefore unsuccessful. It had been raining when the milling season started, forcing farmers to harvest earlier.
“This year we have made many improvements. For example, there are other cultivars being planted and developed. Also, this year’s weather is predicted to be less abnormal so hopefully [sugar production] will be better than in 2012, at least 1.8 million tons,” said Dahlan.
President director of state-owned sugar company PT Perkebunan Nusantara (PTPN) X, Subiyono, said one of the main topics discussed at the meeting was how to encourage disciplined agricultural mechanisms and planting patterns.
“Planting patterns need to be monitored closely so that the sugarcane fulfills the requirements of being sweet, clean and fresh [MBS],” said Subiyono, who is also chairman of the Sugar Experts Association (Ikagi).
Subiyono added that sugar mills needed to be more efficient in order to reduce the cost of production so that both farmers and sugar mills could gain more profit.
Production efficiency can be measured through the mill’s capability of producing bagasse, which is sugarcane waste.
“If a sugar mill can produce sugarcane bagasse optimally, it means that the milling process has no problems and the sugarcane has been harvested [well],” he said.
Sugarcane bagasse can also be used as a cheap natural fuel so that mills do not need to buy fuel to operate the machines in the factory.
Subiyono hopes that the milling period, which is usually 160 days, will be shorter this year and in years to come, but with optimal capacity.
“We can eliminate high costs during harvest because we can avoid the rain if the milling season is only 160 days,” he said.
Subiyono added that another challenge that must be addressed is the ASEAN Economic Community or single market in 2015.
This requires sugar mills to keep improving to meet consumers’ increasingly high expectations and to ensure their products meet the Indonesian National Standards (SNI).
“Sugar mills in Indonesia need to reduce production costs in order to increase competitiveness.
Although PTPN X’s production cost is only Rp 6,000 per kilogram, which is lower than other BUMNs [state-owned enterprises], we still need to reduce our costs,” he said.
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