Astra Agro to plant new palm trees

The Jakarta Post, Jakarta

With third quarter profits more than double the same period last year, crude palm oil (CPO) producer PT Astra Agro Lestari (AALI) is confident about its plans next year of intensifying its plantations to further boost production.

In a public presentation of the company's third quarter performance on Thursday, vice president Benny Tjoeng also mentioned that the company has planned to share the year's profits with investors by providing a dividend of Rp 100 (1 U.S. cent) per share.

AALI is 64 percent controlled by listed automotive company PT Astra International.

The company has reported a third quarter net profit of Rp 664.7 billion (US$72.8 million), compared to last year's Rp 188.8 billion. Total assets grew 32.3 percent, from Rp 2.6 trillion to Rp 3.5 trillion.

Benny explained that the company would spend up to Rp 350 billion to plant new palm trees in its 16,500 hectares of unused land, as well as upgrade its mills and roads.

The move is expected to boost production by 10 percent to 15 percent next year to 750,000 tons. In the third quarter ending September, the company's CPO output reached 574,816 tons, up 30.6 percent from the same period last year.

"We expect to be able to boost our Golden CPO production as well," he said. Golden CPO is the company's high-quality CPO, containing less than 2 percent of free fatty acid (FFA).

Astra Agro's CPO export volume during the period has more than doubled from 261,783 tons to 107,455 tons. Sales of its Cap Sendok brand cooking oil also jumped by 38.6 percent to 12,243 tons.

"We also plan to intensify some 40,000 hectares of our existing plantations so they can be planted with 126 trees per hectare, and replant 4,500 hectares of our aged palm trees," he said.

The company, however, said it had no plans to acquire new plantation areas. AALI is the largest CPO producer in the country controlling some 205,000 ha of plantation areas in Sumatra, Kalimantan and Sulawesi.

Its production accounts for some 8 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. Indonesia is the second largest CPO producer after Malaysia.