Indonesia’s Ministry of Industry has recently announced substantial investment of Rp 1.3 trillion (US$87 million) by Cargill Indonesia via its PT Sorini Agro Asia Corporindo to build a corn wet milling factory in Pasuruan, East Java. This factory will produce corn starch and sweeteners to meet the needs of corn starch and sweetener raw materials for industrial users.
According to the Director General of Agro Industry at the Ministry of Industry, Putu Juli Ardika, “Cargill’s corn wet milling factory adopts industry 4.0 by optimising automation in the entire process from milling to product packaging using a robotic system.”
The Director General of Agro Industry said that this new investment is believed to be able to substitute imports while increasing exports of corn starch and sweeteners. Putu said that with the increase in domestic production, imports of corn starch, fructose syrup and glucose syrup are starting to be substituted by domestic products. This can be seen through import statistics falling from Rp 3 trillion (US$200.8 million) in 2019 to Rp 1.56 trillion (US$ 104.4 million) in 2021.
Putu explained that the corn starch and sweetener industry is part of the intermediate industry, which has broad links from the agricultural sector to the downstream food and beverage industry sector. He said, “Maize starch products have high added value as raw materials for the vermicelli industry, sweeteners such as glucose, fructose, sorbitol and maltodextrin. In addition, corn starch can be used as an auxiliary material in the biscuit industry, meat processing industry and textiles.”
Presently, the corn starch and sweetener industry is still faced with the challenge of meeting the domestic needs for corn raw materials. Corn raw materials received by the processing industry must have aflatoxin levels below 20 parts per billion (ppb) and starch content above 70%. Putu said, “To provide certainty in the supply of corn for the industry and support the achievement of the corn import substitution program, the Ministry of Industry has proposed a Corn Commodity Balance in 2023. With the Commodity Balance, it is hoped that data on the availability and demand for corn raw materials will be transparent and accountable.”
It is also hoped that companies will work closely with corn farmers to increase production and absorption of corn raw materials according to the industry specifications.
