Wilmar unit, others to invest $3 bln in Indonesia sugar industry

JAKARTA, - Eleven firms, including a unit of palm oil giant Wilmar International (WLIL.SI: Quote, Profile, Research), plan to invest a total of 27.5 trillion rupiah ($3 billion) in Indonesia's sugar industry, a senior industry ministry official said on Wednesday.

The firms plan to develop 187,000 hectares of sugar cane plantations and build several sugar factories which will have total capacity to process 76,000 tonnes of cane per day, said Benny Wahyudi, director general of agro and chemical industries at the industry ministry.

"They will produce raw sugar. The factories will be built in several provinces including Central and East Java provinces, West Kalimantan, Riau, Papua, and West Nusa Tenggara," Wahyudi told reporters.

The firms will start building the factories and cane plantations this year, he added.

PT Papua Resource Indonesia -- a unit of Wilmar International group, the world's largest listed palm oil firm -- plans to build a sugar factory with capacity to process 8,000 tonnes of cane per day and develop 20,000 hectares of cane plantations in Indonesia's far-flung Papua province.

"The government will give a tax holiday, interest subsidy and reduce income tax to support PT Papua's plan," said Faiz Achmad, director of food industry at the industry ministry.

Raw sugar is normally imported by local sugar refiners who process the sweetener into high-quality refined sugar which is later used by the food and beverage industry.

Household consumers use white sugar produced by local sugar cane plantations.

Indonesia is Southeast Asia's biggest consumer of sugar.

source: reuters