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BWPT to invest $112.5m in new processing facility
Publicly listed plantation firm BW Plantation (BWPT) says it will start the construction of its fifth palm oil processing facility in the fourth quarter of this year, with total investment estimated to reach US$112
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ublicly listed plantation firm BW Plantation (BWPT) says it will start the construction of its fifth palm oil processing facility in the fourth quarter of this year, with total investment estimated to reach US$112.5 million.
BWPT corporate secretary Kelik Irwantono told a press conference on Wednesday that the palm oil processing facility in Central Kalimantan was expected to start producing 45 tons of palm oil per hour by the third quarter of 2015.
According to Kelik, the construction of a palm oil facility usually costs around $2.5 million per 10 tons of palm oil it produces every hour.
At present, the company is still discussing which plan to take to fund the construction project.
'But looking at our current account and profitability, we might source the fund from our internal cash,' he said.
The company's total capacity currently stands at 210 tons per hour, with its newest facility kicking off operations earlier this month.
BWPT has just finished its fourth processing facility, located in East Kalimantan, which has started producing 60 tons of palm oil per hour since May 2.
The company owns more than 89,000 hectares (ha) in Central Kalimantan, East Kalimantan and West Kalimantan with a combined total planted area exceeding 62,000 ha.
BWPT's crude palm oil (CPO) production rose by 8.2 percent to 32,670 tons in the first quarter of this year, compared to 30,195 tons in 2013.
Its fresh fruit bunch production rose by 8.6 percent from 150,098 tons between January and March this year, compared to 138,205 tons during the first quarter of last year.
BWPT has yet to publish its first-quarter financial report, but Kelik said the company estimated that its net profits during the first three months of the year doubled from last year's first-quarter figure of Rp 36.17 billion ($3.12 million), as it expected to benefit from improving global commodity pieces.
The company's average selling price (ASP) rose by 36.3 percent year-on-year (y-o-y) to Rp 8.2 million per ton during the first quarter.
While booking stronger sales last year, growing by 20.74 percent y-o-y to Rp 1.14 trillion, BWPT saw its net profits fall by 44 percent y-o-y to Rp 181.78 billion last year due to a plunging ASP.
This year, Kelik said the company hoped to see a 25 percent increase in its CPO production.
