MARKET DEVELOPMENT
BWPT Plans Three New Facilities
BWPT Plans Three New Facilities
12/06/2014 (Jakarta Post) - Palm oil firm BW Plantation (BWPT) said on Tuesday it needed to increase its palm oil processing capacity from 230 to 350 tons per hour, prompting the company to build three more facilities before 2020.
The additional capacity will eventually help the company reach its maximum cost advantage.
BWPT corporate secretary and finance director Kelik Irwantono said in a press conference that for the company to operate efficiently — where a rise in costs would translate into an output increase — the company needed to have a production capacity of at least 350 tons per hour.
“To achieve the target, we might have to establish three more plants before 2020, considering the average age of our trees is seven years old,” Kelik said.
“Our plants have yet to mature, and we still have about 16 to 17 years to grow.”
Oil palm takes approximately four years to bear fruit and has a productive age of 25 years.
The company’s total capacity stands at 230 tons per hour, with its newest facility kicking off operations earlier this month.
The fourth processing facility — located in East Kalimantan — started producing 60 tons of palm oil per hour from early last month.
BWPT will start the construction of its fifth palm oil processing facility in Central Kalimantan in the fourth quarter of this year, with a total investment estimated to reach US$112.5 million.
The palm oil processing facility is expected to start producing 45 tons of palm oil per hour by the third quarter of 2015.
According to Kelik, the construction of a palm oil facility usually costs around $2.5 million per 10 tons of palm oil it produces every hour.
Kelik said the company had yet to decide when it would start building its sixth plant.
BWPT targets to see its CPO production rise by about 25 percent this year, from last year’s figure of 32,670 tons.
Kelik said that the company aimed at sustaining a stable, 25 percent annual growth in the long run, and was planning to plant about 4,000 hectares (ha) of land to reach the target.
Up to the first quarter of the year, however, the company had only planted 400 ha of land, which Kelik said was due to “long preparation needed for planting”.
The company owns more than 89,000 ha in Central Kalimantan, East Kalimantan and West Kalimantan with a combined total planted area of 69,000 ha.
BWPT announced on Monday that it had generated Rp 356.75 billion ($30.19 million) in revenue in the first three months of 2014, up by about 32.7 percent compared to the same period last year.
The company’s net profit went from Rp 36.23 billion to Rp 84.99 billion between January and March.
The additional capacity will eventually help the company reach its maximum cost advantage.
BWPT corporate secretary and finance director Kelik Irwantono said in a press conference that for the company to operate efficiently — where a rise in costs would translate into an output increase — the company needed to have a production capacity of at least 350 tons per hour.
“To achieve the target, we might have to establish three more plants before 2020, considering the average age of our trees is seven years old,” Kelik said.
“Our plants have yet to mature, and we still have about 16 to 17 years to grow.”
Oil palm takes approximately four years to bear fruit and has a productive age of 25 years.
The company’s total capacity stands at 230 tons per hour, with its newest facility kicking off operations earlier this month.
The fourth processing facility — located in East Kalimantan — started producing 60 tons of palm oil per hour from early last month.
BWPT will start the construction of its fifth palm oil processing facility in Central Kalimantan in the fourth quarter of this year, with a total investment estimated to reach US$112.5 million.
The palm oil processing facility is expected to start producing 45 tons of palm oil per hour by the third quarter of 2015.
According to Kelik, the construction of a palm oil facility usually costs around $2.5 million per 10 tons of palm oil it produces every hour.
Kelik said the company had yet to decide when it would start building its sixth plant.
BWPT targets to see its CPO production rise by about 25 percent this year, from last year’s figure of 32,670 tons.
Kelik said that the company aimed at sustaining a stable, 25 percent annual growth in the long run, and was planning to plant about 4,000 hectares (ha) of land to reach the target.
Up to the first quarter of the year, however, the company had only planted 400 ha of land, which Kelik said was due to “long preparation needed for planting”.
The company owns more than 89,000 ha in Central Kalimantan, East Kalimantan and West Kalimantan with a combined total planted area of 69,000 ha.
BWPT announced on Monday that it had generated Rp 356.75 billion ($30.19 million) in revenue in the first three months of 2014, up by about 32.7 percent compared to the same period last year.
The company’s net profit went from Rp 36.23 billion to Rp 84.99 billion between January and March.