Government Privatizes Kyauktaw Sugar Mill

Kyauktaw: The Burmese government has recently privatized the sugar mill in Kyauktaw – the only sugar mill in western Burma’s Arakan State – and has leased it to a local company for a period of 30 years.

kyauk taw

The mill was leased to the Rakhine Bakson Multiple Company for 30 years starting this fiscal year 2011 – 2012, at a rate of 220 lakh Kyat per year, according to an official from the company. The official said the company has taken the lease on the mill not just for its own profit, but also to contribute to local development.

“The government used to offer only 18,000 Kyat for a ton of sugarcane. We increased the offer price for sugarcane to 30,000 Kyat just after hiring the mill. We believe our increased rate will benefit the local farmers as well as attract them to increasing sugarcane cultivation,” said the official.

A farmer who lives nearby the mill in Kyauktaw said the sugarcane cultivation in their area will increase in the coming season with the rise in price for the product. “We were worried that the sugarcane price would fall after privatizing the mill, but now we are happy because the private company has doubled the price for our product, and it is sure the sugarcane farming in our area will also increase,” said the farmer.

The official also said the profit of the company depends on the availability of sugarcane in the area.

“We may find losses within the two years of starting the mill – an estimated 100 million Kyat in the first year and 50 million Kyat in the following year – because the availability of sugarcane from the area at present is very low. We need at least 10,000 tons of sugarcane to run the mill each year, but this year we will be able to procure only 3,000 tons from the area. That is why we have to encourage sugarcane farming in the area by offering double price for the product. We are sure of our profits after raising the availability of raw products from the area,” said the official.

According to the sources, the government found losses from the sugar mill every year because the necessary sugarcane, the major raw material for the mill, was not sufficiently available from the area and the quality of sugar produced by the mill was very poor. As a result, the government had turned the mill to producing liquor from molasses instead of sugar for years.

As it still continued to see losses from the liquor production, it finally privatized the mill to the Rakhine Baksone Company.