Astra Agro CPO output to grow 10% to 15%
The Jakarta Post, Jakarta
Publicly listed plantation company PT Astra Agro Lestari has said its crude palm oil (CPO) production this year is projected to surge by 10 percent to 15 percent as a result of the expansion of its CPO plantation areas.
In its report to the Jakarta Stock Exchange late on Thursday, the company said that CPO production this year was projected to reach 700,000 tons to 720,000 tons, from 633,425 tons last year.
The company said that last year's production was 2.2 percent higher than the initial target of 620,000 tons, and a 16.5 percent increase on the 543,634 tons in 2002.
The company did not elaborate.
Astra Agro is 64 percent owned by automotive kingpin PT Astra International.
Since last year, Astra Agro has been trying to sell its rubber, tea and cacao plantations in a move to shift its business focus to CPO.
More than 92 percent of Astra Agro's sales revenue is already derived from palm-based products.
The company has allocated around Rp 90 billion (US$10.7 million) to anticipate the loss resulting from the sale of non- CPO plantation areas at lower prices.
The company controls around 205,000 hectares of plantations in Sumatra, Kalimantan and Sulawesi.
CPO output from Astra Agro accounts for around 7 percent of the country's total 2004 production, which is predicted to reach 10.4 million tons, higher than last year's 9.9 million tons.
The Indonesian Palm Oil Producers Association (GAPKI) recently said that the increase in production this year was a result of the expansion of CPO plantation areas from 1999 to 2000.
The 500,000 extra tons produced this year would allow Indonesia to boost exports of the commodity, as local consumption is predicted to remain steady at 3.5 million tons a year.
With the additional output, Indonesia can increase exports to countries like China, India, Pakistan, Bangladesh, the Netherlands and new markets such as eastern Europe.
GAPKI has predicted the CPO price will remain stable at $510 to $515 per ton this year.