Astra Agro CPO output to grow 10% to 15%

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.