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PTPN III allocates Rp 15t in capex next year
Fine performance: PT Perkebunan Nusantara III (PTPN III) president director Dasuki Amsir (center) points to PTPN III’s financial report, while human capital management and general affairs director Seger Budiarjo (left) and operation management and development director Erwan Pelawi look on after the company’s press conference on its performance as of October in Jakarta on Tuesday
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span class="inline inline-center">Fine performance: PT Perkebunan Nusantara III (PTPN III) president director Dasuki Amsir (center) points to PTPN III’s financial report, while human capital management and general affairs director Seger Budiarjo (left) and operation management and development director Erwan Pelawi look on after the company’s press conference on its performance as of October in Jakarta on Tuesday. The company booked Rp 921 billion (US$67.98 million) in consolidated net profits as over January-September, up by 14.2 percent from Rp 806 billion in the same period last year. (Antara/Audy Alwi)
State-owned plantation company PTPN III, a holding company of 14 state-owned plantation enterprises (SOEs), has allocated Rp 15 trillion (US$1.1 billion) in capital expenditure (capex) to support its expansion plans next year, including the construction of new processing facilities.
President director Dasuki Amsir said the capex would come from the firm’s internal cash as well as bank loans and would be used to support the achievement of its 2018 revenue target of Rp 48 trillion by way of the increased production of commodities, such as palm oil, rubber, sugarcane, tea and coffee.
Among its expansion plans is to enlarge its sugarcane plantations on existing land and construct a new sugar factory.
“For palm oil, we will focus on improving productivity through intensification efforts, such as revamping our planting method, fertilizing and many more, rather than extensification,” Dasuki said on Wednesday.
The firm hopes to increase its crude palm oil (CPO) production by 16.67 percent year-on-year (yoy) to 2.1 million tons next year by boosting productivity.
It also wants to jack up its sugar production by 26.4 percent yoy to 1.1 million tons next year.
The firm is eager to meet this goal by way of its brand-new sugar factory that can process 6,000 tons of cane a day (TCD). It claims the factory, owned by its subsidiary PT Glenmore Sugar Factory, is more efficient.
Dasuki said the target of 1.1 million tons of sugar for next year was still far from the annual national demand that settled at 5.8 million tons. Local private firms are estimated to produce only between one and two million tons.
Under these circumstances, PTPN III is now converting some of its rubber plantations to sugarcane plantations. That includes 1,300 hectares owned by PTPN IX in Central Java and another 7,000 ha under PTPN XII in East Java.
It is also in talks with the Agriculture Ministry and state-owned forestry firms to utilize idle land outside Java Island to plant sugarcane.
To raise its production, PTPN III is preparing to construct a new sugar factory with a processing capacity of 6,000 TCD. Located in Pemalang, Central Java, the facility is scheduled to open in 2020.
At present, the firm holds Rp 60 trillion in liabilities.
Despite the huge debt, it maintains an optimistic outlook on its future financial condition given the positive progress made in the first three quarters.
PTPN III managed to book Rp 921.2 billion in profit over January-September after making a Rp 805.5 billion loss in the same period last year. Its sales were up by 5.2 percent to Rp 28.1 trillion.
“Sales and profit have followed a positive trend this year and are estimated to reach Rp 37 trillion and Rp 1.2 trillion, respectively, this year thanks to better commodity prices, higher productivity and cost efficiency,” said Erwan Pelawi, the firm’s operation management and development director.
