SMART to open huge palm estate in Berau

JAKARTA (JP): Cooking oil and margarine producer PT Sinar Mas Agro Resources and Technology Corporation (PT SMART Corp) will invest Rp 350 billion (US$145.8 million) to open a 40,000 hectare oil palm estate in Berau, East Kalimantan this year, the company said yesterday.

Company vice president Tan Siaw Liang said the land would be cleared later this year and planting would start next year.

Liang said SMART, a Sinar Mas group subsidiary, operated 64,000 hectares of oil palm plantations in North Sumatra, Jambi and South Kalimantan, including 15,000 hectares which are being developed under a smallholder nucleus estate scheme.

Liang said the company produced 140,000 tons a year from the 64,000 hectares but still needed to buy 160,000 tons of CPO for its refineries to produce cooking oil and margarine.

The company's refineries can make 300,000 tons of cooking oil and 75,000 tons of margarine a year.

All its products are sold domestically.

SMART's net profit rose by 35.78 percent to Rp 37 billion in 1996, Liang said. He said net profit was projected to increase to Rp 40 billion this year.

"The company maintained growth and made a good profit with the drop in CPO prices on the international market last year," Liang said after the shareholders' meeting

CPO cost $495 a ton in 1996, down from $535 a ton in 1995. The price has reportedly picked up to between $505 and $510 a ton over the past two months.

The company recorded a 16.96 percent increase in net sales to Rp 844.4 billion in 1996 and projected sales of between Rp 800 and 850 billion this year.

Liang said the company attributed last year's profit increase to the sale of two loss-making subsidiaries -- the cooking oil, margarine and shortening producer PT Sinar Meadow International Indonesia and snack food company PT Smartindo Bluebird Snacks -- in December, 1995.

Liang said the company had wanted to sell another loss-making subsidiary, PT Sinar Pure Foods International, a tuna caning operation, but there were no interested buyers.

"SMART wants to focus on palm oil-based consumer products," he said.

Liang said SMART would distribute Rp 50 dividend per share in addition to one stock dividend for every five stocks. (jsk)