Astra Agro: 2003 sales to grow 15%<\/p>\n
Dow Jones, Jakarta<\/p>\n
Indonesia's PT Astra Agro Lestari expects sales to rise around
\n15% this year, due to a projected increase in crude palm oil
\nproduction and export volume.<\/p>\n
\"We forecast our sales this year to grow by up to 15%,\" Astra
\nAgro Vice President Benny Tjoeng told Dow Jones Newswires in an
\ninterview Friday.<\/p>\n
The company expects sales last year to have surged nearly 40%
\nto IDR1.98 trillion from IDR1.42 trillion in 2001, mostly due to
\na significant increase in crude palm oil prices, which rose to
\nabout $463 a ton in December 2002 from around $329 a ton a year
\nearlier.<\/p>\n
Tjoeng also expects the price of the commodity to further
\nstrengthen this year due to a prolonged dry spell in Indonesia
\nand Malaysia, and increased demand from China.<\/p>\n
\"But the increase of the CPO price this year, I expect, won't
\nbe that as high as last year's,\" he said.<\/p>\n
Analysts expect palm oil output to fall during the first half
\nof the year due to drier-than-normal weather caused by the
\ncurrent El Nino weather phenomenon during Indonesia's October-
\nFebruary growing season. The drop in output is expected to cause
\nprices to rise.<\/p>\n
Tjoeng said that in a bid to maintain sales growth, the
\ncompany will increase its crude palm oil production output by at
\nleast 10% this year to around 600,000 metric tons, from an
\nexpected 544,000 tons in full year 2002.<\/p>\n
Astra Agro currently has 189,000 hectares of palm oil
\nplantation. Almost 100% of the plantation is ready for harvest or
\nhas matured.<\/p>\n
To support the sales growth, the company will also strive to
\nincrease its export volume to 20% this year, compared with an
\nexpected 12%, or around 65,000 metric tons, last year, Tjoeng
\nsaid.<\/p>\n
\"We see that we can increase our exports to India, Pakistan
\nand some countries in Europe,\" he added.<\/p>\n
Tjoeng said Astra Agro also plans to build two new palm oil
\nrefineries in Central Kalimantan and South Sulawesi provinces.<\/p>\n
The first in Central Kalimantan will have capacity of 60 tons
\nof fresh fruit bunches per hour, with investment of around $5
\nmillion.<\/p>\n
The second in South Sulawesi will have capacity of 20 tons of
\nfresh fruit bunches per hour, with investment worth around $2
\nmillion, he added.<\/p>\n
Tjoeng believes the development of such refineries will
\nfurther support Astra Agro's growth in the year ahead.<\/p>\n
He said the company will narrow its business focus to
\nconcentrate on the palm oil industry in the future. Astra Agro
\nplans to sell non-core businesses, such as tea, rubber and cocoa
\nplantations units, by 2007.<\/p>\n
\"We are still in the preliminary steps to sell such non-core
\nassets,\" he said, without elaborating.<\/p>\n
Astra Agro is controlled by Indonesian auto group PT Astra
\nInternational. Late last year, the car manufacturer said it had
\nsigned an $850 million debt restructuring deal with its
\ncreditors, which included the sale of assets such as its stake in
\nthe plantations group. However, the parent company later said it
\ndoesn't plan to sell its shareholding in Astra Agro, which it
\nconsiders a valuable asset.<\/p>",
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