Perhutani To Build Sago Processing Plant In Sorong, Papua

Jakarta, Sept 27 (Antara) - State forestry company Perhutani said it will build a sago processing plant in the district of South Sorong, West Papua, with an investment of Rp120 billion. "The groundbreaking ceremony will take place in October to mark the start of the factory construction," Perhutani Chief Executive Bambang Sukimananto said. The factory is expected to be operational in a year or October 2014, Bambang said in a statement made available to Antara news agency on Friday. Sago is the staple food for most Papuans with rice for the rest of the country. Minister for State Enterprises Dahlan Iskan has visited the area where the factory is to be built and seen preparation made in the location in the sub-district of Kais. Bambang said the factory will have a production capacity of 30,000 tons of sago flour per year. Perhutani has been granted a concession of 16,000 hectares of land for sago plantation in the sub-district of Kais. "We have been granted the license to grow sago palm trees over a 16,000 hectares of land ," Bambang said. Perhutani cooperates with other state companies including electricity utility company PT PLN and PT Barata. PLN will build a power plant to guarantee power supply for the factory and Barata will handle the construction of the factory. "The cost is quite high, therefore, state companies cooperate in the project," Bambang said. Electricity from the power plant will be sold at commercial price, he said. He said the investment will be financed with a bank loan making up 70 percent with the remaining 30 percent to be put up by Perhutani. "The cost of Rp120 billion not include investment in the power plant to be provided by PLN, he said. He said the sago processing factory is part of the government`s program in food security. The factory will produce both sago flour and sago-based food products.