The company group operate an integrated industry consisting of sugar factories and sugar plantations. It has 58,000 hectares of sugar plantations including 52,389 hectares in partnership in Lampung.
SGC has expanded its business in related industry by establishing a fourth subsidiary PT Indo Lampung Distillery operating in ethanol industry.
SGC was an asset under PT Holdiko Perkasa, a holding company established to coordinate assets handed over by the Salim group in compensation for a debt of Rp 47.7531 trillion to the government represented by the bank rescue agency BPPN after the 1997/1998 mionetary crisis. BBPN later sold SGS to PT Garuda Panca Arta (GPA).
In 1998, the Salim Group and the government through the finance minister signed a Master Settlement and Acquisition Agreement (MSAA). The agreemeent was a follow-up of debt settlement by the coutry's largest conglomerate to the government.
In 2001, BPPN offered to sell SCG through an auction which was won by GPA, an affiliate of of a consortium of Trimanunggal and Yanatera Bulog. GPA, which is owned by Gunawan Yusuf acquired SGC at Rp 1.161 trillion. GPA became a holding company for SGC.
Before being out in the auction SGC was valued at Rp 2.7 trillion but it had a debt of Rp 1.4 trillion to a number of creditors.
Later there was a problem. In 2006, Marubeni accused PT. Sweet Indo Lampung (SIL), a subsidiary of SGC of failure to meet an obligation of 3.52 billion yens and US$ 7.92 million used by PT SIL to build a sugar refinery and buy factory machines.
SGS retaliated by demanded 53 parties including the Salim Group, Marubeni Corporation (Marubeni) and Sumitomo Mitsui Banking Corporation to pay more than US$ 1.2 billion in compensation for the cancellation of debt agreement made by Marubeni to SGC. The debt agreement was designed by the Salim Group, to regain companies it had sold to BPPN.
Under the agreement, land and property belonging to Gula Putih Mataram were used as collateral for debt of PT. Sweet Indolampung and PT Indo Lampung Perkasa to Marubeni. Similarly, factory machines and equipment of PT. Indo Lampung Distillery had been made collateral for debts of Sweet Indolampung and Indolampung Perkasa to Marubeni without the knowledge of Indolampung Distillery.
Until early 2007, the case was still legally processed. Anthoby Salim , a top leader of the Salim Group has also been questioned by police over a lawsuit filed by Gunawan Yusuf.
PT. Gula Putih Mataram (GPM)
PT. GPM was established under the PMDN (Domestic Investment) scheme and received the BKPM (Investment Board) approval in December 1983 to operate in sugar milling industry. The plant built with a total investment of Rp 128,000 million, has a production capacity of 83,000 tons of cane sugar and 38,000 tons of molasses a year. About Rp 32,000 million of the fund were in equity and the rest in loan.
In 1987 the company received BKPM approval to increase its production capacity to 104,000 tons of cane sugar and 47,500 tons of molasses p.a. The company started commercial operation in 1989.
The company has 25,000 hectares of sugarcane plantation in the sub-district (Kecamatan) of Seputih Mataram, in the regency of Central Lampung. The sugar mill is located in the same location with PT. Gunung Madu Indah Plantation, in Gunung Batin, Terbanggi Besar, Central Lampung. The company is actually the expansion of PT. Gunung Madu Indah Plantation which has operated in sugar industry since 1978. PT. Gunung Madu Plantation is a joint venture between Kuok Investment (HK) Ltd of Hong Kong and PT. Redjo Sari Bumi and PT. Pipit Indah of Indonesia. The local partners are owned by the same shareholders with PT. GPM.
PT GPM has a captive market as its entire production is purchased by the State-owned board of logistics (BULOG).
In 1992, PT. GPM was granted a license to expand its capacity by the BKPM (Capital Investment Board) to 32,000 ton of cane sugar and 19,000 tons of molasses a year. The expansion project was estimated to cost US$ 52,6643 million and it was completed in 1994. After more expansion later PT. GPM now has a total production capacity of 136,000 tons of cane sugar and 66,500 tons of molasses a year.
PT. Sweet Indo Lampung (SIL)
The company operates in sugar plantation and sugar manufacturing industry. The company started operation commercially in 1995.
PT. SIL, established with an investment of Rp 296,588 million, has a production capacity of 144,000 tons of sugar and 70,000 tons of molasses a year The company was the first sugar factory built by the SGC group.
The sugar plantations and the sugar plantations of four subsidiaries of PT. Indolampung Sugar Industry were built with a total investment of Rp 1,000 billion. Its projects cover a total area of 20,000 hectares in Menggala, North Lampung. The company has 9,000 hectares of land appropriated for sugar plantations. Initially, the project was developed in cooperation with Cent Union of Spain.
SGC is the first producer of branded sugar in Indonesia, with the brand of Gulaku, entirely processed from sugarcane. Gulaku is made available in white and yellow colors sold at the same price of Rp6,000 a kg.
The white color type has the largest consumers accounting for 65% of Gulaku consumers. The yellow color type is more popular in the regions. Gulaku, however, has a market share of only 5% in the country.
Production of Gulaku was first launched in Java in 2004. Its distributor is PT. Intermas Tata Trading. Now Gulaku has been found in market centers in Kalimantan, Sulawesi and Papua. It has not made much headway in marketing in North Sumatra, Riau and Pontianak, where smuggled sugar is more dominant.
Currently Gulaku has been sold in modern retail outliets such as minimarkets, supermarkets and hypermarket. Around 30% of Gulaku production is sold via modern retail outlets and 70% in traditional markets.
SGC also sells industrial sugar in 50-kg packaging through PT. Indolampung Perkasa and PT. Gula Putih Mataram.
PT Indo Lampung Distillery (ILD)
ILD operates in ethanol industry with an annual production capacity of 60 million liter. ILD started operation in March 2007 and became the largest molasses producer in Southeast Asia. In the first year of its operation it produced 50 million liters of ethanol a year.
Its ethanol production is to be mixed with premium gasoline with a ratio of 10% to the mixture. The government is expected to make more land available for expansion of sugar plantation if the company is to expand its production capacity under the government's program to gradually reduce the use of oil fuels by using more vegetable oil fuels. In Lampung, wide lands are still available for plantations. SGS wants to use the land for sugar plantations.
SGC has four subsidiaries operating in sugarcane-based industries--PT Gula Putih Mataram, PT Sweet Indo Lampung, PT Indo Lampung Perkasa, and PT Indo Lampung Distillery. The four subsidiaries need produce 450,000 tons of sugar a year or 20% of the country's total production of 2.3 million tons in 2006.
Three of the subsidiaries have their won sugar plantations--PT Gula Putih Mataram (GPM) has 24,000 hectares, PT Sweet Indolampung (SIL) 15,000 hectares and PT Indolampung Perkasa (ILP) 22,000 hectares.
The factories, therefore, are integrated with sugar plantations giving greater efficiency for SGS. If a factory was in trouble and could not operate normally, it could hand over its work to other factories.
Companies Groups in sugar industry Parent company: PT. Gula Putih Mataram Address: Wisma GKBI, Jl Jend Sudirman Kav 25 Jakarta 10210 Phone(s): (021) 5722720 Fax.: (021) 5722648-49 Number of Companies: 5 President Director: Gunawan Yusuf List of : Members of Company Group in sugar industry 1. PT. Garuda Panca Artha (Investment Holding) 2. PT. Gula Putih Mataram (Sugar Industry) 3. PT. Sweet Indo Lampung (Sugar Industry) 4. PT. Indo Lampung Perkasa (Sugar Industry) 5. PT. Indo Lampung Distillery (Sugar Industry)