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Jakarta Post

Modern sugar mill starts operation in Central Java

  • Suherdjoko

    The Jakarta Post

Blora, Central Java   /   Mon, June 9, 2014   /  10:29 am

PT Gendhis Multi Manis (GMM) has officially started operating a new sugar mill in Blora, Central Java. The mill is touted as among the most modern in the country, with a production capacity of 600 tons of sugar per day.

GMM president director Kamadjaja said that the construction of the sugar mill, which began in June 2011, cost around Rp 1.8 trillion (US$151.77 million). '€œOf the total investment, Rp 1.2 trillion came from bank loans,'€ he said during the sugar mill'€™s inauguration ceremony on Wednesday last week.

The mill '€” which has the capacity to produce 6,000 tons of cane per day (TCD), the equivalent of 600 tons of sugar '€” is located in Tinapan village in Blora, a major sugar production center in the province. The new sugar mill is the most modern sugar factory in an area where most sugar mills have been in operation since the Dutch colonial era.

 '€œMany sugar mills started to be established in 1870, but afterwards many of them stopped their production,'€ he said, adding that out of 74 sugar mills built in the Dutch colonial period, 11 were located in Central Java.

Currently, sugar demand in Indonesia is 5.75 million tons a year. Only about 40 percent of that demand is supplied by local producers.

'€œThe new mill is expected to meet up to 5 percent of the national demand,'€ Kamadjaja said, adding that he was optimistic the mill could produce quality sugar because the sugar content of locally produced sugarcane was high enough, reaching 8 percent.

The new 43-hectare mill employs more than 1,000 workers and involves around 20,000 sugarcane farmers, who process their cane in the mill under a profit-sharing cooperation.

GMM, Kamadjaja said, would only get 30 percent of the profits, while the farmers would get 70 percent. Government-owned sugar mills only passed on 66 percent of profit to the farmers, he said.

The company is expected to reach the break even point after 8 years of operation, he said, adding that the mill'€™s effective operating time was 11 months because it needed to conduct an annual overhaul that could take one month.

This year, GMM will also build a sugar mill in Madura, East Java, which will have a production capacity four times greater than the Blora sugar mill.

'€œThere is a possibility for the product of the Madura sugar mill to be exported because the [sugar] quality is good,'€ he said.

Meanwhile, Sugarcane Farmers Association (APTRI) chairman Soemitro Samadikoen told tempo.co last Wednesday that presidential candidate Joko '€œJokowi'€ Widodo had promised in a meeting to overhaul state-owned sugar mills to boost national sugar productivity.

'€œJokowi said that if he is elected, he will prioritize sugar mill improvement. Up to five sugar mills will be improved each year,'€ he added.

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