Budi Acid eyes Rp 2.5 trillion in revenue

Publicly listed tapioca starch and sweeter manufacturer PT Budi Acid Jaya expects to raise Rp 2.5 trillion (US$267.5 million) in total revenue this year — almost the same level as recorded last year.

Budi Acid, a subsidiary of agricultural-based consumer goods producer Sungai Budi Group, had set a more conservative target for this year. This was a result of a lower supply of cassava, the primary raw material used to produce tapioca starch, seen during the first months of this year, as well as the potential impacts of the global economic slowdown on local buyers, deputy president director Sudarmo Tasmin said on Friday.

Tapioca starch, which contributes 65 percent to Budi Acid Jaya’s overall business, is the basic ingredient for various domestic industries, including food, chemicals and paper.

“In terms of revenue, we will maintain 2011’s figure, which has been our record high thus far, while for net profit, we also aim to reach around the Rp 59 billion achieved last year,” Sudarmo told reporters after a shareholder meeting in Jakarta.

Sudarmo added that during the first quarter of this year, Budi Acid had booked Rp 533 billion in revenue, or around 21.32 percent of the total target.

Throughout last year, the firm had seen its revenue increase by 17.9 percent from Rp 2.12 trillion and its net profit jump by 28.2 percent from Rp 46.13 billion in 2010, according to the firm’s financial statement. The company disbursed Rp 29.8W billion, equal to 50.4 percent of last year’s profits, as interim dividends to shareholders last October. This was approved as the final dividend during the shareholder meeting
on Friday.

To support its operation and expansion activities, the company has allocated around Rp 200 billion for its capital expenditure this year, which was derived from internal cash as well as loans, particularly for its expansion moves, Sudarmo said.

Of the figure, Rp 57 billion, or 28.5 percent, will be used for finishing the construction of a glucose plant in Surakarta, Central Java, and a tapioca starch mill in Madiun, East Java, both of which will have annual production capacity of 30,000 tons.

“We expect the glucose plant to commence operations in the third quarter of this year, while the tapioca starch mill will kick off during the first half of next year,” Sudarmo said.

Budi Acid would also spend Rp 37.8 billion, or 18.9 percent of its allocated budget, to build two bio-gas power plants in Lampung, where most of its plants are located, he said.

At present, the firm runs 20 plants — comprising of tapioca starch, citric acid and sweeteners — in Lampung and Surakarta, Central Java, with a total annual production capacity of 500,000 tons, 12,000 tons and 120,000 tons respectively.

The firm sells 90 percent of its output to the local market, where it has long been a market leader for tapioca and glucose. The remaining 10 percent is sold to overseas markets, including China and Taiwan for tapioca starch and the US for citric acid and sweeteners.