Ministry of SoES Establishes PT Sinergi Gula Nusantara to Support Food and Energy Security

MOJOKERTO,Indonesia,Oct. 24,2022 -- Minister of State-Owned Enterprises,Erick Thohir inaugurated revitalization of national sugar industry to support food and energy security in Mojokerto,East Java,today (10/10). This event was attended by Minister of Energy and Mineral Resources Arifin Tasrif,Head of Indonesia's National Government Internal Auditor (BPKP) Muhammad Yusuf Ateh,Member VII of Finance Audit Board(BPK) Hendra Susanto,Deputy Minister of SOEs I Pahala Mansury,and Regent of Mojokerto Regency Ikfina Fatmawati.

Erick Thohir,Minister of State-Owned Enterprises,at the inauguration ceremony for the revitalization of the national sugar industry in Mojokerto,East Java (10/10)

"In line with the priorities of the government under President Joko Widodo,where he always emphasizes ecosystem development,we have to be able to overcome our dependence on world supply chains,especially for the food and energy sectors. Mr. President always encourages seeking for solutions. Hence,we continually encourage realizing down-streaming of sugar industry,not only just a plan," said Erick.

The inauguration marks the beginning of the organizational structuring of PT Perkebunan Nusantara III (Persero) / PTPN Group through the establishment of PT Sinergi Gula Nusantara (SGN) which will play important roles in supporting food and energy security. The Minister of SOEs,Erick Thohir said that the formation of PT SGN proves that SOEs are ready to build business ecosystem amidst the uncertainty of the food and global industry.

PT SGN is the realization of business transformation acceleration at PTPN Group Holding resulted from merger of assets of sugarcane plantation companies owned by PTPN Group,namely PTPN II,PTPN VII,PTPN IX,PTPN X,PTPN XI,PTPN XII and PTPN XIV. Integration of PTPN Group through the establishment of PT Sinergi Gula Nusantara,PT Sinergi Sawit Nusantara,and PT Aset Manajemen Nusantara is in accordance with the Regulation of the Coordinating Minister for Economic Affairs Number 9 of 2022 concerning Changes in the List of National Strategic Projects (SNP).

"The transformation of PTPN has actually run well and the establishment of PT Sinergi Gula Nusantara,and PT Aset Manajemen Nusantara is part of the National Strategic Projects which will be continually controlled by the government. This is a commitment from the state to ensure that the three projects will run well," said Erick.

As the sole entity of 36 sugar mills (PG) owned by PTPN Group,PT SGN will become the largest sugar company in Indonesia with a projected land expansion of up to 700 thousand hectares in the on-coming 2028. With such vast land area,it is expected that PT SGN will be able to control 60%-70% of the national sugar market by 2028.

"We hope that PT SGN will be capable to supply demand for sugar nationally,and the welfare of farmers must improve along,as the 700 thousand hectares of land belongs not only to PTPN,but also in collaboration with farmers," said Erick.

Revitalization of the National Sugar Industry carried out by PT SGN includes on-farm as well as off-farm intensification and extensification so that it is expected to be capable to realize self-sufficiency of national consumer sugar in 2028,and industrial consumer sugar in 2030.

As an information,in 2021 the national production of white crystal sugar (WCS) was 2.35 million tons with national sugar consumption reached 3.12 million tons. Thus,the remaining national balance must be supplied through imports amounted to about 1.04 million tons equivalent to WCS.

Therefore,the establishment of PT SGN is a solution to accelerate the self-sufficiency of consumer sugar,to improve the welfare of sugarcane farmers,as well as to maintain sugar stocks for price stabilization. In addition to food self-sufficiency purposes,PT SGN is also projected to realize energy self sufficiency program through sugarcane-based bio-ethanol which give real contribution to Biofuels as new and renewable energy (NRE).

"We must also ensure that PT SGN will be capable to produce bio-ethanol so that in the future it can become a solution to solve imported fuel problem. As a report,we have also made benchmarking with neighboring country of Brazil,where they have succeeded to encourage the production of sugar derivative to become bio-ethanol. If other country can do that,why we cannot?," Erick continued.

In line with the increase in sugar productivity carried out by PT SGN later,the production of sugarcane-based bio-ethanol that gives real contribution to biofuels is expected to increase along. "We have a target to be able to produce 1.2 million kiloliters of crude oil (by 2030). Therefore,the presence of Pertamina to become off-taker is important,in order to ensure that what the farmers needs and the need for national sugar will be correlating with the need of national energy by mixing bio-ethanol into fuel and creating environmentally friendly fuel as we can see in Brazil," he said.

Thisis important for substitution ofcrude oil imports and is used for the energy mix for environmentally friendly vehicles. Thus,the country will have energy alternatives to reduce dependency on imported fuel. To support efforts,PTPN synergizes with Pertamina to developbiofuel pilot project. This is an important step realize provision of bioethanol tothe people as a more environmentally friendly vehicle fuel,as has already applied in Brazil. This step is also in line with sustainable energy transition program that become one of the priority agendas of the G-20 Summit in Bali,in addition to global health architecture and digital transformation.

On the occasion,the Minister of SoES also has a chance to make dialogue with farmers at PTPN X's Temugiring Garden and to witness sugarcane harvesting process using cane harvesters and cane grabers and the cane plantersugarcane mechanical planting machine in demo plot area withgrown with superior varieties of NX04 seeds type released by PTPN X's research center.

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