The Indonesian Ministry of Investment is set to develop the Food Estate in Merauke, South Papua, into an integrated sugar industry hub, reports Indonesia Business Post. This ambitious project aims to meet the country’s domestic sugar demand while also producing bioethanol, supporting Indonesia’s broader goals of food and energy self-sufficiency.
During an Executive Meeting in Jakarta on November 18, 2024, Edy Junaedi, Deputy for Investment Implementation Control at the Ministry of Investment, revealed that the Merauke Food Estate is expected to produce 2 million tons of sugar and 200 million litres of bioethanol annually. The bioethanol will be produced using molasses, a byproduct of the sugar production process.
“Our goal is to establish an integrated sugar industry that will support President Prabowo Subianto’s vision of food and energy self-reliance,” Edy said.
The project is estimated to require an investment of Rp83 trillion (approximately US$5.3 billion), with the government planning to see this investment come to fruition progressively by 2029. Edy also noted that several investors have already expressed interest in contributing to the initiative.
Development of the integrated sugar industry is part of a presidential decision under Presidential Decree No. 15/2024, that appointed the Minister of Investment to lead a task force aimed at accelerating self-sufficiency in sugar and bioethanol in the region. Part of the task force’s responsibility is the proper allocation of land for sugarcane cultivation and offering incentives to businesses involved in the project.
Agriculture Minister Amran Sulaiman explained that the state-owned enterprises (SOEs) will work together with private companies to create sugar factories in the region. According to estimates, each plant would cost around Rp2.5-3 trillion.
“We hope construction can begin next year,” said Amran in May 2024, adding that public-private partnerships are key to minimizing government capital expenditure while increasing domestic sugar production. He pointed to the success of similar collaborations, which have led to the establishment of 10 operational sugar factories across the country, including in Bombana (Southeast Sulawesi), South Sumatra, and West Nusa Tenggara.
