PT Astra's palm oil output may rise 13%

PT Astra's palm oil output may rise 13%

Claire Leow, Bloomberg/Jakarta

PT Astra Agro Lestari, Indonesia's largest publicly traded plantation company, expects crude palm oil production to rise 13 percent this year, helped by higher yield, Vice President- Director Benny Tjoeng said today.

Palm oil output rose 8.3 percent to 622,396 metric tons in the nine months ended Sept. 30, the Jakarta-based company said Oct. 13. Astra produced 721,085 tons of the commodity last year.

Higher sales may help Astro Agro partly offset higher costs of fertilizers and transport, expected to rise 15 percent this year, after the government reduced fuel subsidies starting Oct. 1, Tjoeng said in an interview. Fertilizers and transport costs, which account for one-fifth of the total expenses, will probably rise another 30 percent in 2006, he said.

"Oil palms are more mature so they are more productive, we have better estate management and plantations were 100 percent fertilized last year," Tjoeng said. Yields this year will rise to 4 metric tons of palm oil per hectare from 3.6 tons last year.

Last year, road improvements at plantations allowed Astro Agro to transport more fruit bunches to its mills, lifting sales output by 28 percent to 721,085 tons. Its 2004 net income almost tripled to Rp 801 billion (US$79 million).

Astra Agro, a unit of Indonesia's largest automaker PT Astra International, will report earnings next week, Tjoeng said. Indonesia is the world's biggest oil-palm grower after Malaysia.