07 February 2019

Jakarta. PT Mahkota Group Tbk can't wait to enter the downstream palm oil industry. They are overseeing the construction of a refinery or refining plant and a kernel crushing plant in Dumai, Riau. The target completion of construction is in June this year.

The expansion of the refinery through a subsidiary called PT Intan Sejati Andalan. Later, the factory will be able to produce cooking oil with a production capacity of 1,500 tons per day. Meanwhile, the kernel crushing plant can produce 400 tons of palm kernel oil per day.

In addition to the two factories, Mahkota Group also intends to add a stockpile tank with a capacity of 20,000 metric tons through another subsidiary, PT Dumai Paricipta Abadi. Currently, their stockpile tank capacity is 76,000 metric tons.

For expansion needs, Mahkota Group has prepared a capital expenditure (capex) fund of IDR 200 billion. “Funds are obtained from IPO (initial public offering) proceeds and part of bank loans,” said Usli Sarsi, President Director of PT Mahkota Group Tbk, when contacted by KONTAN, Tuesday (29/1).

Mahkota Group's business target is not playing games. If the downstream expansion runs smoothly, the company coded MGRO shares on the Indonesia Stock Exchange (IDX) is targeting IDR 5 trillion in revenue this year. They admitted that last year's revenue realization reached IDR 2 trillion.

While the net profit target in 2019 was 123 billion. Mahkota Group management has not been able to disclose the realization of last year's net profit. This is because the financial statement audit process has not been fully completed. 

In addition to relying on a new business line, namely downstream production, the Mahkota Group's performance target in 2019 also rests on the trend of crude palm oil (CPO) prices. In their records, palm oil prices began to improve at the beginning of this year. “Implicitly it looks better than the closing price at the end of 2018 at U$ 535.02,” Usli explained.

Mahkota Group hopes that the trade conflict between China and the United States can quickly subside. The hope is that the trend of strengthening CPO prices in the global market can continue.

While domestically, Mahkota Group also hopes for government policies related to the implementation of biodiesel use. If the policy is realized nationally, CPO producers like them will no longer only depend on the export market.

For your information, last year Mahkota Group produced 219,149 tons of CPO. While palm kernel production reached 62,879 tons. The company has six factories in North Sumatra and Riau.

Throughout the nine months of 2018, Mahkota Group posted revenue of IDR 1.47 trillion or grew 18.55% year on year (yoy). While the profit attributable to owners of the parent entity, aka net profit, was IDR 45.41 billion. In the same period last year, a net loss of IDR 17.28 billion was recorded.

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Source : Harian Kompas terbit 07 Feb 2019