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[JAKARTA] Singapore-listed plantation firm Indofood Agri Resources Ltd could invest at least US$150 million to build a new sugar mill in Indonesia, its chief executive told Reuters on Tuesday.
"If you look at the Indonesian domestic sugar market, it's significantly short of sugar," said Mark Wakeford, CEO of Indofood Agri. He estimated that Indonesia produces 2.5 million to 2.6 million tonnes of sugar a year and consumes up to 5.5 million tonnes.
Indofood Agri, which already has two sugar mills in Indonesia, would prefer to build a new mill as there are very few opportunities for acquisitions and a lot of the existing mills need to be upgraded, Wakeford said. "If you look at the structure of the Indonesian sugar industry, it's dominated by government-run entities as opposed to private plantation groups," Wakeford said. "There is really no M&A opportunity in the domestic Indonesian sugar sector."
Finding suitable land is also a major obstacle for companies trying to expand sugar production in Southeast Asia's largest economy, he said.