DUE TO CORONA, MAHKOTA GROUP (MGRO) PREDICTS GLOBAL CPO DEMAND COULD DROP 20%
10 March 2020
PT Mahkota Group Tbk (MGRO), a CPO producer, claims that the corona virus (Covid-19) has no significant effect on the company's expansion, production, and sales targets. However, it predicts that global CPO demand has the potential to decline by 20%.
MGRO Corporate Secretary, Elvi said that she was optimistic that the company's performance could be maintained thanks to the use of domestic CPO in programs run by the government.
“The existence of the virus does not have a significant impact on performance because the government supports the domestic use of CPO in the B30, B50, and other programs,” Elvi explained to Kontan.co.id, Monday (9/3).
He added that the program is also a downstream program that processes CPO into finished goods.
His party also said that it was not directly affected by the decline in export figures to countries that were hit by the corona crisis, because those who threw CPO abroad were buyers. “If buyers are affected, and demand from these countries drops, it is likely that we will experience a decline as well,” he continued.
Elvi predicts that the impact of the corona decline on global CPO demand could decline by around 20%.
He also explained that throughout 2020, MGRO will focus on developing and selling downstream products, namely the new refinery plant and KCP will be fully operational. The strategy to improve performance will be carried out in the upstream sector as well.
“Several plantation locations in the South Sumatra area have become the target of the company to increase the supply of raw materials for the new PKS which was taken over by the subsidiary in November 2019,” he concluded.