Production Function
Mitr Lao has cane crushing capacity of 5,000 tons per day and produces raw sugar for export to
Europe under the EBA quota. With the limited amount of cane, the production typically runs
between 90 to 100 days only. Without refining section, most of the production functions are closed
entirely until the next crushing season. From the first crushing to date, Mitr Lao has yet to crush at the
maximum capacity of 5,000 ton cane per year. The lack of scale in cane volume adversely affected the
production efficiency and cost of the production side. The total cost was too high. In fact, the total cost
of producing the sugar in Mitr Lao has always been higher than the average selling price (Appendix 3
last table).
The machine utilization rate has been improving over the years due to the gradual increase in cane
but the overall rate is still low at 60-70% of capacity. The production process is not entirely smooth
either as there are unplanned shutdowns in various parts of the production process such as milling,
boiler, no cane, and others (Appendix 2). The start and stop cycle consumes huge amount of energy
and also increases the variable cost such as electricity and steam in the production cycle.