FOCUS ON DOWNSTREAMING, MAHKOTA GROUP (MGRO) REFINERY PLANT WILL OPERATE SOON
18 February 2020
Bisnis.com, JAKARTA - Plantation company PT Mahkota Group Tbk (MGRO) is downstreaming oil palm by building a refinery and kernel crushing plant.
Mahkotra Group Corporate Secretary Elvi said the refinery plant built by the company in Bengkalis, Riau is expected to start production in mid-February 2020. The stage of construction of the factory has entered the commissioning or test operation stage.
The factory built by the issuer coded MGRO shares has a production capacity of 1,500 tons per day. In the initial stage, the company targets the total production of the refinery plant at 200,000 tons per year or 548 tons per day.
As is known, the refinery will produce palm oil (CPO) derivative products such as olein or cooking oil and stearin or margarine raw materials. The source of raw materials will come from CPO products at the company's Palm Oil Mill (PKS) in Riau Province.
“MGRO is indeed heading downstream through the refinery and KCP plant in Bengkalis Regency, Riau, which has just completed commissioning and will soon be in production in mid-February 2020,” Elvi told Bisnis.com on Tuesday (11/2/2020).
Elvi said, in 2019 the company scored a CPO production realization of 213,000 tons, up 2 percent compared to the realization in 2018. This year, CPO production is expected to be the same as last year. Meanwhile, for financial performance, MGRO projects revenue of IDR 5.6 trillion with a profit of around IDR 123 billion.
On the other hand, Mahkota Group also stated that there was no additional capital expenditure in line with the addition of new palm oil mills. In November 2019, Mahkota Group acquired a palm oil mill in Palembang worth IDR 120 billion. The factory has a capacity of 45 tons per hour.
“Basically, the PKS is in good condition and has been operating before the acquisition process was carried out,” Elvi explained.
According to MGRO website, the company's operations are spread across North Sumatra and Riau. The Medan-headquartered company has two palm oil mills in North Sumatra and four similar mills in Riau. MGRO also has a bulking station in Dumai, Riau.