- VIVAnews/Nurcholis Anhari Lubis
VIVAnews - U.S. Ambassador to Indonesia, Scot Marciel, today witnessed PT Lumbung Padi Indonesia (PTLPI) signing of a loan agreement with Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, for the long-term financing of the construction and operation of a state-of-the-art rice milling facility in Mojokerto regency of East Java province, with total project costs estimated at US$21 million.
“This project is just one example of cooperation between the United States and Indonesia to improve food security for the Indonesian people by utilizing American capital and science to improve crop yields and reduce post-harvest losses” Ambassador Marciel said at the U.S. Embassy in Jakarta. OPIC is increasing its support for investments in Indonesia as part of the U.S.-Indonesia Comprehensive Partnership.
Rice paddy yields are approximately 5 tons per hectare in Java, compared with yields of 9 tons per hectare in other Asian nations. One significant source of inefficiency in Indonesia’s rice industry is losses that occur between the rice harvest and delivery to consumers.
PTLPI’s new facility will cut the existing losses of approximately twenty percent of the harvested crop are common, due to inefficient solar drying and processing with outdated rice milling technologies.
“We are honored to be working with OPIC on this Project, which is a first step in helping Indonesia to achieve self-sufficiency in rice production. This represents the first of many similar projects that we intend to roll out within the country,” stated Ms. Fara Luwia, President Director of PTLPI. PTLPI’s sponsors include Totah Associates of the USA and Farma International Pte. Ltd. of Singapore. Delphos International is a financial advisor to PTLPI.
Once constructed, the rice milling facility will initially reduce losses from solar drying, storage and milling by up to 6 percent. More than 50,000 farming families in East Java are expected to benefit.
The mill will be a guaranteed buyer for these farmers during peak harvest periods, even when prices are depressed and it is difficult to secure a buyer. PTLPI will also support approximately 200 small and medium-scale rice milling units in the vicinity, as it will purchase semi-polished rice from these mills for further processing at its own facilities.
Other regional economic development generated by the project will include job creation and human capital development from PTLPI’s vocational training and educational assistance programs. Once the plant is fully operational, PTLPI expects that the project will directly employ more than 50 people.
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