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View all search resultsBulog’s packaging factory plan risks diverting focus from core mandate
Industry representatives estimated that Bulog needed to build factories with production capacity of 1,500 to 2,000 tonnes per month and a workforce of 1,000 to 1,500 people, if it wanted to pursue the plan.
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A worker tidies up a stack of locally produced rice on May 30, 2024, at state food company Perum Bulog’s warehouse in Indramayu, West Java. (Antara/Dedhez Anggara)
P
lastic industry representatives and analysts are urging the State Logistics Agency (Bulog) to scrutinize the feasibility of a plan to build its own plastic sack factories, warning that the move could divert resources from the agency’s core food security mandate and disrupt market competition.
Indonesian Olefin, Aromatic and Plastic Industry Association (Inaplas) secretary-general Fajar Budiono said Bulog’s plan could help the agency reduce packaging costs and preserve profit margins. However, this would only be possible if Bulog could operate the factories efficiently.
He also argued that domestic manufacturers already had sufficient capacity to meet Bulog’s demand, with surplus production available for export to other countries.
“This is a labor-intensive industry. We should not let an initiative intended to reduce costs end up making them [overall] higher,” Fajar told The Jakarta Post on Thursday, warning that unsuitable machinery, inefficient factory locations and uncompetitive operating costs could undermine the plan.
The comments came after Bulog announced plans to build plastic sack factories across Indonesia’s major islands, starting with a pilot project in Jakarta, to meet its growing demand for rice packaging, president director Ahmad Rizal Ramdhani said on Oct. 9, as reported by Detik.
As of Oct. 8, Bulog had procured 4.12 million tonnes of rice equivalent under its public service obligation (PSO), amounting to 102.88 percent of the government’s 4 million-tonne target.
Based on the scale of procurement, Inaplas estimated that packaging 5 million tonnes of rice would require around 250 million sacks, meaning the factory should have production capacity of 1,500 to 2,000 tonnes per month and a workforce of 1,000 to 1,500 people.
