P

resident Joko '€œJokowi'€ Widodo opened the largest sago mill in Indonesia on Friday. The mill, operated by state-owned forestry firm Perum Perhutani,is expected to boost sago production for both domestic needs and export.

The mill, located in Kais, West Papua, officially started operations on Jan. 1, Antara news agency reported on Friday.

Perum Perhutani president director Mustoha Iskandar said that Papua had considerable potential for natural sago production. A good quality Papuan sago raja can produce 900 kilograms of sago from one branch, he said.

Built at a construction cost of Rp 150 billion, the mill will employ 40 local workers to work in the factory and around 600 people to supply sago logs.

The company expects the venture to accrue an income of Rp 100 billion per year. It is also hoped that the mill will boost the local economy.

The factory will produce 25 percent of its full capacity during the first year of operation, 50 percent during its second year and is expected to produce to full capacity during its third year.

The processed sago from the mill will be distributed by Perhutani to Papua, Jakarta, Cirebon, Semarang, Surabaya and Medan.

Meanwhile, Mustoha said that the firm also aimed to export sago products to Japan, Korea, Thailand and China.

Jokowi expressed hope that the plant would benefit the surrounding area and improve the local economy.

The firm will pay Rp 9,000 per log to locals who supply to the sago mill.

In this way, Kais locals will no longer have to send their products to the Sorong market in Sorong, West Papua. The journey to Sorong often takes up to a week on a traditional boat.

Gunarto, project chief of the management unit at Perum Perhutani, told kompas.com on Thursday that the mill stands on five hectares of land while the sago tree forest stands in a 16,000 hectare concession, making it the biggest in the country.

He explained that the construction of the mill started in 2013.

'€œWe will have a full production rate in 2017,'€ he said as quoted by kompas.com.

Initially, the factory will produce 100 tons of sago per day but is expected to produce 30,000 tons of product within one year.

National demand for starch (sago essence) reached around 5 million tons per year, while the country'€™s sago industry has been able to supply only 3.5 million tons annually, leaving a great opportunity for Perhutani.

The island of Papua has the largest sago palm forests in the world, reaching 2.5 million ha.

Perhutani said it currently had a license for 15,000 ha of sago palm forest in Papua and it would partner with local farmers to add to production quantity, he said.

Perhutani would invest Rp 112 billion (US$9.3 million) in the factory, with 30 percent coming from bank loans, while the remaining 70 percent is said to be sourced from internal cash.

Perhutani, previously known only for its timber products, has reported a rising contribution from its non-timber products.

Non-timber products currently account for 53 percent of Perhutani'€™s revenue, a surge of only 25 percent in the period from 2005 to 2009.