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ndonesia'€™s largest poultry company PT Charoen Pokphand Indonesia (CPIN) has allocated a total of Rp 5.5 trillion (US$452.48 million) to capital expenditure this year and the next with expansion and acquisition plans in the pipeline.

CPIN director Ong Mei Sian said Rp 3 trillion would be spent this year and Rp 2.5 trillion next year, up from previous years'€™ allocation of Rp 2 trillion due to a bigger expansion and acquisition in several regions.

The company, part of Thailand'€™s Charoen Pokphand Group, has spent Rp 2.3 trillion as of September this year to complete the con-struction development of a feed mill in Cirebon, West Java and to acquire assets owned by publicly listed firm PT Sierad Produce in Banten.

Charoen Indonesia had invested $40 million to build the Cirebon feed mill, which would have a production capacity of 20,000 tons per month.

The firm has also recently completed the acquisition process of Sierad Produce'€™s factories and breeding farms worth Rp 430 billion to boost its production.

With bigger capital expenditure, Charoen Indonesia aims to develop its three lines of business '€” animal feed manufacturing, day-old-chick (DOC) farms and processed chicken products '€” which will help boost its production capacity by 10 to 15 percent annually to meet growing market demand.

'€œThe plan for next year is to build a new feed mill in Semarang, Central Java,'€ Ong said recently, refusing to mention the amount of investment.

Last week, the company signed a syndicated loan agreement worth an equivalent of $400 million with 15 international and local financial institutions to support its business expansion for the next few years as well as for its working capital needs.

Charoen Indonesia has also utilized around 50 percent of its last year'€™s syndicated loans worth $500 million.

'€œWe have a healthy ratio between total equity and debts and we will maintain our debt-to-equity ratio [DER] at 0.7 percent,'€ Ong said.

Charoen Indonesia aims for sales to grow by 15 percent to Rp 28.5 trillion at the end of this year from Rp 24.8 trillion in last year'€™s target. In the nine-month period of this year, Charoen booked Rp 21.7 trillion in net sales, up 16.6 percent from Rp 18.6 trillion by the end of September last year.

However, the company'€™s profit slumped 22.7 percent to Rp 1.7 trillion as of September this year from Rp 2.2 trillion in the same period last year as production costs soared due to the high prices of raw materials for feed mills.

Ong expected the new government to provide a more supportive environment that could stabilize the rupiah as half of its raw materials for production are imported.

Charoen owns eight feed mills, 90 breeding farms, 49 incubation farms, as well as five facilities for processed chicken products. The company also has 2,500 distribution agents throughout Indonesia.

Shares of CPIN rose 0.74 percent to Rp 3,980 apiece at Friday'€™s close of trade at the Indonesia Stock Exchange (IDX), from Rp 3,950 a day earlier.

The stocks have risen almost 18 percent so far this year, similar to the broader Jakarta Composite Index'€™s (JCI) 19.6 percent advance.