LAST YEAR'S CPO PRODUCTION OF MAHKOTA GROUP (MGRO) 213.000 TONS, THIS YEAR WILL BE SLOPING
06 February 2020
Crude palm oil (CPO) production this year is not expected to rise high. While demand is believed to be experiencing a surge, so the selling price of CPO is projected to rise.
As is known, the Indonesian Palm Oil Association (Gapki) projects that the increase in palm oil production in 2020 will slow down compared to 2019. The same thing was also expressed by a producer of palm oil and its derivative products, PT Mahkota Group Tbk (MGRO).
Elvi, MGRO Corporate Secretary, said that 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 told Kontan.co.id, Wednesday (5/2).
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.
Apart from relying on margins obtained from price increases, MGRO also looks at the development of the domestic market. “The local market will play an important role because increasing domestic economic growth can trigger an increase in consumption of end products from oleochemicals, oleofood and biofuels,” he said.
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.
Launching the company's financial report in the third quarter of 2019, Mahkota Group posted a decrease in revenue and profit. Both were depressed due to the factor of crude palm oil (CPO) and palm kernel (PK) prices which fell globally.
In the third quarter of 2019, MGRO posted revenue of IDR 1.37 trillion, down 6.93% from the same period the previous year of IDR 1.47 trillion. MGRO net profit for the period also fell 41.47% year on year (yoy), from IDR 50.73 billion to IDR 29.69 billion.
CPO sales dominated MGRO revenue at that time by 78% or Rp 1.07 trillion. It's just that the majority business segment fell 2.7% yoy compared to the same period the previous year of IDR 1.10 trillion.
The only major business segment that experienced an increase was tank rental services which grew 13.1% from IDR 50.70 billion in Q3 2018 to IDR 57.39 billion in Q3 2019.