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New incentive offered to attract investors to sugar industry
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Field workers harvest sugarcane in Malang, East Java. (JP/Aman Rochman)
The government has issued a regulation that aims to bring in more investments to the sugar industry.
Under Ministerial Regulation No. 10/2017 on raw materials incentives in sugar industry development issued by the Industry Ministry, investors establishing a sugar factory in 2010 and onward are allowed to partially import raw sugar while developing their own plantations.
“Developing sugarcane plantations is not easy; it’s costly and businesspeople face many challenges, starting from finding the proper land for the plants and seedling development,” said Panggah Susanto, the ministry’s agro-industry director general, in a press conference on Wednesday.
(Read also: Sugar price ceiling of Rp 12,500 per kg effective in March)
“That’s why we give them time to develop it in stages while they’re able to import the raw materials.”
For those building the factories outside Java, they have seven years to develop a plantation. In the first year, they need to source at least 20 percent of raw sugar domestically and are allowed to import up to 90 percent of it.
In the seventh year, they need to source at least 90 percent locally, with up to 55 percent from imports. In the eighth year, they need to fully source raw sugar locally and stop any imports.
For those investing in Java, they have five years to do so while those looking to open another factory or plantation have three years to do so.
The ministry is waiting for investors to apply for the incentive up to the end of this month. (bbn)
