BAD WEATHER IS THE REASON FOR MAHKOTA GROUP TO SET A CONSERVATIVE PRODUCTION TARGET
07 February 2020
PT Mahkota Group Tbk chose a conservative production target this year. The consideration is that the planting process this year may be disrupted due to bad weather that has lasted since the end of last year.
Throughout 2019, Mahkota Group produced 213,000 tons of CPO. “For this year we project it to be the same as last year,” said Elvi, Corporate Secretary of Mahkota Group, Wednesday (5/2).
Along with the stagnant production target, Mahkota Group does not plan to increase factory production capacity. After all, recently they also just completed the operational test or commissioning stage of the palm oil refinery plant in Dumai, Riau. The commercial operation target starts in mid-February 2020.
Not a few pockets were spent to bring the factory in Dumai. Mahkota Group or listed with the MGRO stock code on the Indonesia Stock Exchange (IDX), has disbursed a budget of IDR 330 billion.
Even though this year's production target does not increase, Mahkota Group is aiming for IDR 5.66 trillion in revenue. The company's management sniffs out the potential for an increase in CPO prices amid limited production stocks while global market demand is likely to increase.
At the same time, the domestic CPO market is also getting hotter. “The local market will play an important role because the increase in domestic economic growth can trigger an increase in consumption of end products from oleochemicals, oleofood and biofuels,” Elvi explained.
So far, Mahkota Group has operated seven palm oil mills (PKS). The details, two factories in North Sumatra, four in Riau, and one in South Sumatra.
Mahkota Group has not yet published its 2019 performance. During the nine months of last year, revenue fell 6.16% year on year (yoy) to IDR 1.37 trillion. Profit for the year attributable to owners of the parent entity almost doubled to IDR 24.14 billion.