PT Rosan Kencana Perkasa, wholly owned by the Rosan Kencana Perkasa KUB sugarcane farmers’ cooperative, plans to set up a sugar refinery in Mojokerto with an estimated investment of $100 million.

“We hope to source the remaining $15 million from local banks and our local partners,” Rosan Perkasa president director Amrizal Zain told reporters in Jakarta on Friday.

Amrizal said funds from the financing facility would be spent on land acquisition, plant construction and purchasing machinery from Czech-based Invelt Group.

Amrizal said the refinery was expected to start operating in 2012 with a capacity to process 6,000 tons of sugarcane per day (TCD).

Speaking at the signing ceremony, Deputy Agriculture Minister Bayu Khrisnamurti said the new refinery would help increase Indonesia’s production of sugar for industrial and household consumption.

“Sixty percent of the national demand for sugar has to be covered by imports. Supporting companies to build more sugar plants is one strategy to increase the country’s sugar production.”

Indonesia is targeting to produce 6 million tons of the commodity to meet national demands. According to the Agriculture Ministry report, the country produced 2.9 million tons of sugar last year.

East Java, one of the largest sugar producing areas, is home to 31 sugar refineries with a combined processing capacity of 93,000 TCD. Farmers in the province can generate a total production output of 107,000 TCD.

“We need to build at least three more factories with a capacity of 6,000 TCD each so that all sugarcane in East Java can be processed into sugar,” Amrizal said.

He added that the planned sugar refinery would be supported by the 66,000 sugarcane farmers in the Rosan Kencana co-op, who own a total of 19,000 hectares of plantations with an annual output of 1.5 million tons. (rch)

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