29 November 2022

Palm Oil Supports Economy Amid World Recession

Entering the end of 2022, PT Mahkota Group Tbk is optimistic that the revenue target of IDR 8 trillion with a net profit of 100 billion in 2022 can be achieved.

“Although many countries are currently hit by a recession, we are still optimistic that we can achieve the company's projections in 2022,” said President Director of PT Mahkota Group Tbk, Usli Sarsi at the Public Expose event conducted online, Friday (25/11).

The company's optimism can be seen from the achievement of production volume performance from January to October, which increased by 22.3 percent from 536 thousand tons in 2021 to 656 thousand tons in 2022. From the financial statements for the June period, the company's assets also increased by 36.8 percent from IDR 1.82 trillion to IDR 2.49 trillion in 2022.

Usli admitted that the global economic uncertainty has also affected the price of fresh fruit bunches (FFB). In the first semester, the price of FFB increased, but in the second semester it decreased. This condition also affected the sales volume of CPO and its derivatives to the company during the January to October period, which decreased by 5.6 percent from 471 thousand tons in 2021 to 444 thousand tons in 2022.

“We are still optimistic that until the end of the year sales can be increased,” he said.

In achieving the target, the company is strategizing by developing downstream, establishing strategic cooperation, making acquisitions, improving operational efficiency and effectiveness, the quality of human resources, smooth cash flow, maximizing investment goods and seeking cheap funding.

According to Usli, demand for palm oil will continue to increase. Palm oil is a source of energy, food and consumer goods.

“The G20 participants held in Bali raised one of the issues of sustainable energy transition and this has been agreed by the leaders of the G20 countries,” he said.

The energy crisis experienced by many countries, palm oil is an alternative, besides being environmentally friendly, it can also be produced in large quantities. Unlike fossil fuel energy, which is unsustainable, as well as other vegetable oils, it requires a larger land area. In comparison, to produce 53 million tons of oil requires 121 million hectares of land, while palm oil to produce 65 million tons of oil requires 20 million hectares of land. ​

Oil palms can only live in the tropics along the equator. This means that Indonesia is the most extensive country where palms can be planted.

Source : Harian Analisa 28 November 2022