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ublicly listed plantation firm PT Dharma Satya Nusantara (DSNG) '€” which operates in the crude palm oil (CPO) and wood processing sectors '€” is looking to spend US$80 million on capital projects this year.

Most of the capital expenditure (capex) will be channeled into developing its palm oil business, including constructing a new mill and expanding its plantation areas, according to DSNG deputy president director and chief financial officer Andrianto Oetomo.

'€œWe are going to begin the construction of our seventh mill in East Kalimantan in the second quarter of 2014. It will have a production capacity of 60 tons of [oil palm] bunches per hour,'€ he said on Tuesday.

On average, Andrianto said, it cost around $20 million to construct a mill with a capacity of 60 tons of bunches per hour. The seventh mill is expected to be fully operational in the third quarter of 2015.

DSNG '€” part of tycoon Theodore Permadi Rachmat'€™s Triputra Investindo Arya '€” currently operates five mills in Central and East Kalimantan. Its sixth mill, also in East Kalimantan, is scheduled to begin operations later this year at the same capacity as the seventh mill.

The company'€™s total production capacity will stand at 450 tons of bunches per hour by 2015, up from the current 330 tons of bunches per hour.

DSNG will also need about $55 million of capex funds to add 10,000 hectares of palm oil plantation this year, according to Andrianto.

The expansion is part of the company'€™s efforts to reach a total of 100,000 hectares of planted area by 2016. '€œWe plan on adding 10,000 hectares annually from 2014 to 2016. Our economy-of-scale target will be reached once we have 100,000 hectares,'€ he said.

At the moment, DSNG has 70,527 hectares of planted area and 110,000 hectares of unplanted area in Kalimantan.

In its wood-processing business, the firm is looking to a bigger sales contribution from China, as well as North African, Middle Eastern and Southeast Asian countries.

DSNG president director Djojo Boentoro said that demand in those countries had been growing, spurred by rampant development. '€œOur most in-demand products are plywood and parquet,'€ he said.

Besides plywood and parquet, DSNG also produces blockboard, engineered doors and engineered flooring.

As of now, exports make up most of the wood division'€™s sales at between 80 and 95 percent, with Europe, Japan and the US its largest market destinations.

Meanwhile, DSNG'€™s latest operational report reveals that it posted double-digit growth in both its fresh fruit bunch (FFB) production volume and CPO sales volume throughout 2013. Its FFB production rose 21.7 percent to 1.24 million tons and its CPO sales climbed 33.2 percent to 336,240 tons during the year.