Indonesia plans to build eight sugar mills in the next two years, with an annual production capacity of 50,000 tonnes each, in an effort to reduce its dependence on imports, an industry official said on Tuesday.
Indonesia, Southeast Asia's largest sugar buyer, has been trying to become self-sufficient in sugar production, but lack of investment may cause it to miss its initial production target of 3.3 million tonnes each year until 2008.
Indonesia placed curbs on sugar imports in late 2002 to protect prices during harvest time due to an influx of cheap imports and rampant smuggling. However, production has not kept pace with consumption, which stood at 2.2 million tonnes last year, forcing Southeast Asia's largest economy to import around 450,000 tonnes in 2005.
It has bought 181,800 tonnes of white sugar so far this year. The chairman of the Indonesian Sugar and Flour Producers Association (APEGTI), Nastier Monsieur said the plants would produce raw sugar during the sugar cane harvest season and refine imported raw sugar after the harvest season.
"We plan to build them mostly in the eastern part of Indonesia, including Papua and Slaws with an investment of around $25 million per unit," Monsieur told.
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