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tate-owned sugar cane and tobacco planter PT Perkebunan Nusantara X (PTPN X) plans to spend up to Rp 1 trillion in investment this year.

Finance director Dolly P. Pulungan said that most of the funds would be used to purchase new sugar machines.

'€œWe will purchase around 20 machines, which will range from sugar grinding machines and evaporator machines to centrifugal machines,'€ Dolly said on Friday.

Dolly said the company would use its internal cash to cover up to 30 percent of the investment, while the remainder would be supported by bank loans.

PTPN X owns 11 sugar factories across East Java, namely PG. Watoetoelis, PG. Toelangan, PG. Kremboong, PG. Gempolkerep, PG. Djombang Baru, PG. Tjoekir, PG. Lestari, PG. Meritjan, PG. Pesantren Baru, PG. Ngadirejo and
PG. Modjopanggoong.

The company produced 494,616 metric tons of sugar last year, an increase of almost 11 percent from 446,926 metric tons a year earlier, according to production figures published on its website. Meanwhile, PTPN X'€™s production of sugarcane molasses stood at 367,046 tons in 2012, increasing by around 16 percent from 315,761 metric tons year-on-year.

The company'€™s main product, however, is tobacco. It produced 19,028 tons of green tobacco leaves in 2012, a decline of 6 percent from 20,231 tons in 2011.

The company reported Rp 2.3 trillion (US$236.82 million) in revenue last year, according to Dolly, increasing by around 9 percent compared to Rp 2.1 trillion in 2011, according to figures from the State-Owned Enterprises Ministry.

PTPN X'€™s net profits stood at Rp 417 billion last year, a significant increase compared to the Rp 155.2 billion in 2011.

Dolly said that the company expected to book Rp 2.7 trillion in revenue and more than Rp 500 billion in gross profits by year end. '€œWe will see an additional Rp 400 billion to Rp 500 billion in revenue this year, thanks to our ethanol business,'€ he said.

The company is working on a bio-ethanol processing facility in East Java with an expected production capacity of 30 million liters per year. PTPN X has said that it aimed to start operations at the facility this year.

The firm is also planning to collect up to Rp 700 billion from selling debt papers. It made a presentation before Indonesia Stock Exchange (IDX) officials on Friday about the bond issuance.

The company was planning to sell the bonds in June or July, according to Dolly.

'€œWe will use the financial report as of December 2012. The bonds will be offered with maturity periods of five to seven years,'€ he said, adding that the company would use the funds raised from the bond issuance to support working capital and refinance bank loans.

PTPN X has appointed two underwriters, PT Bahana Sekuritas and PT AAA Sekuritas, to manage the issuance.

The company has obtained an A+ rating from the ratings agency, PT Pemeringkat Efek Indonesia.

The IDX has executed a total of 19 conventional and Islamic bond issuances from 16 companies year to date. The total funds raised from these issuances had reached Rp 19.42 trillion as of the end of Thursday.

The government has 15 plantation companies, 14 PTPNs (PTPN I to PTPN XIV) and PT Rajawali Nusantara Indonesia, which produce an array of commodities like palm oil, cacao, coffee, tea, sugar cane and rubber. It has announced a plan to merge the 15 PTPN companies under one holding.