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ublicly-listed food company PT Tiga Pilar Sejahtera Food is planning to establish new rice mills that are expected to boost the company’s production and revenue.

Corporate secretary Yulianni Liyuwardi said that each mill would need investment of about US$11 million. “The funding will be supported by the rights issue last year,” Yulianni said on Tuesday.

The company raised about Rp 700 billion (US$75.60 million) from a rights issue last December.

The two new mills, which will each have a production capacity of 120,000 tons a year, will be located in Sragen, Central Java.

Yulianni said that the company would start the construction of the mills soon and expected that they would start production in the second quarter of next year. Mill construction will require about nine months.

According to Yulianni, from the operation of the two new mills, the company expects additional revenue of up to Rp 2 trillion per year with the assumption that the price of rice would stand at Rp 8,000 per kilogram.

The company reported net sales of Rp 577 billion in the first quarter of the year, increasing by 58.06 percent compared to Rp 365 billion in the same period last year. The company’s rice division contributed the most with 53.85 percent of total revenue.

Net profit stood at Rp 47.6 billion in the first three months of the year, a 105.74 percent jump from Rp 23.1 billion during the same period last year.

Tiga Pilar’s rice division currently has two rice mills operated by PT Jatisari Srirejeki in Cikampek and PT Indo Beras Unggul in Cikarang. The two mills have a combined capacity of 240,000 tons per year.

The company has secured procurement of machinery for the mills from Japan-based Satake Corporation. Tiga Pilar, through its rice division and Satake, signed on Tuesday a procurement contract stipulating that the latter will deliver machinery for the mills.

Yuliani declined to reveal the value of the contract.

Tiga Pilar’s rice division also signed a contract of silo procurement with Jiangsu Muyang Group Co. The contract involves procurement of 108 silos with total capacity reaching 216,000 tons to be realized within two years.

—JP/Raras Cahyafitri