Govt halts sugar plants' operations for being too close to each other

The Department of Industrial Works has denied Khon Kaen Sugar Industry and Mitr Phol Group permission to operate their new factories in Loei province, as construction of the two plants violated a regulation that factories must be at least 80 kilometres apart.

Witoon Simachokedee, permanent secretary of the Industry Ministry, said the department had sent letters to the two sugar manufacturers notifying them that it could not grant permission to operate the factories because they are only 50-60km apart. Kosit Panpiemras established the regulation during his term as deputy prime minister and industry minister to prevent sugar factories from competing for the same sugar cane supplies.

The firms, however, can appeal to the industry minister within 30 days of receipt of the denial letter from the ministry under the 1992 Factory Act.

Witoon said Khon Kaen Sugar Industry earlier received a protection order from the Administrative Court allowing its factory in Loei to proceed with sugar-cane crushing operations. It argued that setting up a factory before receipt of official approval was normal practice.

Probe panel

Mitr Phol, meanwhile, has been shipping sugar cane from Loei province to its crushing factory in Khon Kaen.

Witoon said the Office of the Cane and Sugar Board had set up a committee to investigate the problem. The committee is considering revising the 80km rule. If it does, the revised would rule would be applied throughout the land.

Chalach Chinthammit, director of Khon Kaen Sugar Industry, said the company would not petition against the Department of Industrial Works' order. But he added that he did not quite understand why the company had fallen afoul of the regulation after Witoon had himself suggested the Cabinet look favourably upon the firm's request. Khon Kaen Sugar set up a factory in Loei before Mitr Phol did, the director added.

He said that the Administrative Court had issued an order to protect the company so that they are able to proceed with crushing sugar cane at the Loei factory until April 15.