26/04/2013 (Jakarta Globe) - Astra Agro Lestari, the palm oil plantation unit of Astra International, plans to revamp its plantation area and construct palm oil processing plants through a $200 million loan.

Astra Agro will borrow the funds from OCBC Bank, Bank of Tokyo Mitsubishi UFJ, and the Singapore branches of Mizuho Corporate Bank and Sumitomo Mitsui Banking Corporation, Astra Agro financial director Santosa said on Tuesday.

“We would like to increase our borrowing by $200 million, up from the $200 million we secured earlier,” Santosa said, adding that the company would deal with each individual bank instead of a syndication of the banks.

Astra Argo has earmarked between $300 million and $350 million for capital expenditure this year. Aside from replacing aging trees in its plantations, the company plans to build two crude palm oil plants in Aceh and East Kalimantan and finish two oil refineries in West Sulawesi.

Widya Wiryawan, president director of Astra Agro, said the crude palm oil plants will have a processing capacity of 45 tons per hour and are expected to start operation by the end of 2014. This means that Astra Agro will have 30 crude palm oil plants across the country by next year.

The company’s $75 million West Sulawesi refinery will start operations by the end of this year, Widya said. The refinery is expected to have a capacity of 2,000 tons per day.

Astra Agro posted Rp 356 billion ($36.7 million) in net profit during the January-to-March period, a 5.7 percent drop from the same period last year. Widya attributed the decline to a lower crude oil price on the global market.

The company’s average selling price was Rp 6,466 per kilogram during the first quarter of this year, compared to Rp 7,733 per kilogram last year.

Still, Widya is optimistic that the company’s average selling would increase this year, noting that the first quarter price has bounced back from the fourth quarter price last year of Rp 6,336 per kilogram.