PT BISI International, the country's top producer of hybrid seeds for corn, rice, vegetables and fruit, forecasts a 40 percent growth in sales next year but has decided nonetheless to adopt a prudent liquidity position by postponing an expansion plan.
"Next year, we are optimistic we will book Rp 2.4 trillion, or a 40 percent increase in sales revenue on this year's estimate, as demand from farmers will stay high," said president director Junaidi Sungkono, responding to the possibility of slower growth because of the global economic downturn.
During the first nine months of 2008, the company accumulated Rp 1.23 trillion in sales revenue, a 104 percent increase from Rp 604 billion during the same period last year. It booked Rp 335 billion in net profits, up by 294 percent from Rp 85 billion a year earlier.
The company, part of an agriculture giant, the Charoen Pokphand Group, is targeting to book Rp 1.7 trillion in sales by the end of the year, which would represent a 91 percent rise from Rp 890 billion recorded last year.
Junaidi said higher sales would be made possible by the additional 50,000 tons of annual production capacity from a new plant in Kediri, East Java, which has started to operate.
With the new plant, the company has an annual production capacity of 70,000 tons of seeds per year.
"We spent Rp 276 billion to build the plant," said finance director Setiadi Setiokusumo, adding that part of the investment cost was absorbed by this year's total capital expenditure of Rp 140 billion.
Despite its positive outlook, the company has decided however to postpone by a year its plan to build another new plant -- which was earlier scheduled for next year -- aimed at adding another 40,000 tons to the company's annual production capacity.
By delaying the project, the company revised down its 2009 capital expenditure proposals from Rp 270 billion to Rp 65 billion.
"We will use the money to buy around 10 hectares of land for the new plant. We hope we can start construction in 2010," said Setiadi, explaining the decision was made to minimize risks during the crisis.
BISI is 34 percent owned by PT Agrindo Pratama, 23.5 percent by Midsummer Limited with the remaining 42.5 percent in the hands of the public.
The publicly listed company, located in Kediri, East Java, has two subsidiaries, PT Tanindo Subur Prima, a seeds, fertilizer and pesticide trader, and PT Multi Sarana Indotani, a producer of pesticides. (hwa)