MAHKOTA GROUP EXPANDS PRODUCTION OF EDIBLE OIL
12 July 2018
Jakarta, CNBC Indonesia - PT Mahkota Group Tbk (MGRO) will invest in building a cooking oil production plant in Riau. For the construction of this factory, the company disbursed Rp 330 billion from the proceeds of the public offering.
President Director of Mahkota Group Usli said the factory will have a production capacity of 1,500 tons per day with an area of 5-10 hectares. This construction will begin in September with a target completion date of July 2029.
“This downstream expansion aims to increase the company's added value, because the margins are quite good and so far we have sent a lot of raw materials abroad. But if we have our own, it will provide added value,” Usli said at the Indonesia Stock Exchange Building, Jakarta, Thursday (12/7).
Currently, most of the production in the form of crude palm oil (CPO) or reaching 70% is still exported, namely to India, Pakistan, China and countries in Europe. While the rest becomes domestic consumption.
The North Sumatra-based company is targeting a net profit growth of almost double compared to last year to IDR 50 billion, from IDR 17 billion that the company managed to pocket last year. This net profit comes from revenues targeted at IDR 2 trillion throughout this year.
The company is optimistic that this target can be achieved considering that last year there were many obstacles such as forest fires that reduced production. While this year, although in the first half it was still affected by last year, in the latter half of this year it improved supported by weather conditions.
“Usually our factory only produces 500 tons per day now (second semester) has increased to 1,500 tons per day,” he said. (hps/hps)