30 March 2020

PT Mahkota Group Tbk (MGRO) seeks to maintain the export and domestic market potential of crude palm oil (CPO) after the Indian government imposed a lockdown policy for 21 days since March 24, 2020.

MGRO Company Secretary​   Elvi explained, CPO sales are still going well and have not affected production volumes. “This indicates that exports by CPO buyers have not been affected much,” Elvi explained to Kontan.co.id, Thursday (3/26).

Elvi continued, MGRO actually just started the export market on a small scale. However, the lockdown carried out by the Indian government is considered not to have a significant impact immediately.

According to him, on the other hand, there is potential for gradual export growth from China after the coronavirus pandemic in the country subsided.

Besides maintaining exports, Elvi explained, MGRO will also continue to strengthen the domestic market segment.

“Mitigation through strengthening the domestic market is in line with government support through biodiesel development and downstreaming,” Elvi explained.

However, Elvi did not deny the potential disruption experienced for the domestic sector. This is because the corona outbreak in the country continues to spread.

Elvi confirmed that if this continues it is not impossible to affect the company's CPO production process.

“The revision of business targets due to the corona pandemic has not yet been carried out considering that the board of directors meeting cannot be scheduled,” Elvi explained.

In Kontan.co.id's records, the realization of MGRO's CPO production last year reached 213,000 tons. “For this year, it is projected to be the same as last year,” Elvi said.

This year, MGRO has no aggressive plans to increase additional capacity. Moreover, MGRO has just completed the commissioning stage of the refinery plant located in Dumai, Riau.

The plant is planned to be operational by mid-February 2020. The investment value of the refinery plant costs up to IDR 330 billion.

Regarding the revenue target, MGRO is focused on aiming for revenues of up to IDR 5.66 trillion throughout this year. Elvi said, with the predicted decline in CPO production in 2020, it is likely that selling prices will indeed be affected along with world demand which is believed to be increasing.

Until now, Mahkota Group's production facilities have reached seven palm oil mills with details of two mills in North Sumatra, four in Riau, and one mill in South Sumatra.

Source : https://industri.kontan.co.id/news/india-lockdown-mahkota-group-mgro-tetap-jaga-pasar-cpo?page=all