MAHKOTA GROUP (MGRO) FOCUSES ON DEVELOPING PALM OIL DOWNSTREAM BUSINESS
11 November 2021
PT Mahkota Group Tbk (MGRO) pays serious attention to efforts to downstream the palm oil industry.
MGRO has actually become a player in the downstream palm oil industry. This is evident thanks to MGRO's ability to produce crude palm oil (CPO) derivative products, namely refined, bleached, and deodorized palm oil (RDBPO).
As of the third quarter of 2021, MGRO produced 219,000 tons of RDBPO, up 476% (yoy) from the same period in the previous year.
MGRO also has a refinery plant in Sumatra with a capacity of 1,500 tons per day and a kernel crushing plant (KCP) with a capacity of 200-400 tons per day.
MGRO President Director Usli Sarsi said that his party is trying to synchronize business activities with government policies that highly prioritize the downstream palm oil industry.
Downstreaming is needed so that Indonesia can produce palm oil products that have added value. With downstreaming, MGRO also has the opportunity to enjoy incentives provided by the government.
“If we only export upstream products, we will be subject to high taxes. If we can produce downstream products, it is not impossible that our exports will not be taxed,” he said in a virtual public expose, Wednesday (10/11).
MGRO management has also prepared a business development plan, some of which are related to downstreaming.
These include increasing the capacity of refinery line-1 and adding refinery line-2, developing hard stearin, margarine, oil packing, and shortening products, adding stockpiles, increasing the capacity of KCP and solvent extraction plants, investing in biogas businesses, adding turbines, boilers, and bunch presses, processing fertilizers, and developing oleochemical products.
MGRO Director Fuad Halimoen added, increasing refinery capacity is necessary considering MGRO seeks to increase RDBPO production capabilities. This product also has a fairly high demand from both domestic and international markets.
He added that his party provides an investment of around IDR 600 billion to execute these business plans. “This investment is certainly done in stages,” he said.