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tate-owned forestry firm Perhutani reported a sharp increase in its consolidated profits last year following its appointment as a holding company of Inhutani I'€“V, five state forestry enterprises.

In its 2014 financial report, Perhutani booked Rp 380.49 billion (US$30.12 million) in consolidated net profits last year, a 83 percent increase from Rp 238.31 billion in 2013.

According to the report, non-wood products have overtaken wood products in the last five years. In 2014, wood products contributed 49 percent in total revenue, while non-wood products including pine resin, turpentine, cajeput leaves and oil, accounted for 51 percent.

Even so, the company has generated more revenue than ever from its wood products.

'€œRevenue from our wood business has increased by 25 percent, in part because of soaring prices,'€ Perhutani president director Mustoha Iskandar said in Jakarta on Tuesday.

The firm booked Rp 2.1 trillion in revenue from wood products last year, despite producing only 918,587 cubic meters (m3), the lowest in terms of volume in the past four years. In 2013, the company posted a wood production volume of 955,584 m3.

Mustoha said prices grew by 130 percent, partly because of the company'€™s decision to adopt a demand-driven supply strategy.

The company'€™s small A1 logs cost Rp 1.5 million per m3, while larger ones can fetch between Rp 6 million and 9 million.

He also said the firm'€™s appointment as a holding company had boosted its profits by around Rp 68 billion and that its consolidated profit grew at an average rate of 15 percent over the last five years, reaching Rp 4.6 trillion in 2014.

The company aimed to achieve another 15 percent growth in its profit and bottom line this year, Mustoha told reporters.

For 2015, the forestry company has also set aside Rp 520 billion for capital expenditure, allocating the sum primarily to infrastructure, such as developing roads and a new office building in Kuningan, South Jakarta, as well as purchasing industrial machinery.

'€œWe aren'€™t expanding this year, so infrastructure repairs will be our focus,'€ said Morgan Sharif Lumban Batu, Perhutani'€™s finance director, on Tuesday.

Additionally, Morgan said the company would inject Rp 30 billion of capital into one of its eight subsidiaries, PT Palawi Risorsis.

According to the financial report, Perhutani and its subsidiaries had combined assets worth Rp 2.69 trillion by the end of last year, a 66 percent increase from Rp 2.06 trillion the previous year.

In a related development, the firm has experienced a setback in its plan to operate a new sago factory in Sorong, West Papua, this month, which it claims will be the largest in Southeast Asia.

Construction for the 8-hectare production facility, Morgan explained, had stalled due to problems with electricity, pushing back the beginning of operations to next year at the latest.

'€” JP/Tama Salim