15/06/2013 (Jakarta Globe) - Dharma Satya Nusantara, the wood product, timber estate and plantation company affiliated with Indonesian billionaire Theodore P. Rachmat, expects its revenue to increase by as much as 20 percent this year as it expands production volume following its initial public offering.

Andrianto Oetomo, deputy president director of DSN, told reporters on Friday that the company has set a target of revenue growth of between 15 percent and

20 percent this year on 2012 revenue of Rp 3.41 trillion ($345 million).

“The growth will be supported by the growth of volume [of sales,]” Andrianto said.

The company expects its sales volume for crude palm oil to increase to 330,000 metric tons this year from 252,000 metric tons last year, he added.

The company does not expect a significant change in the global CPO price.

“We believe that the price of CPO is starting to crawl up, although not as quick as many people would have expected, but the trend is slowly going up,” Andrianto said.

In Malaysia, palm oil was priced at 2,442 ringgit ($785) per metric ton on Friday. Andrianto declined to provide DSN’s annual average selling price for this year.

DSN sold 252,536 tons of CPO last year, up 33 percent from 189,690 tons in 2011, but cost of goods sold remained high.

Many Indonesian CPO producers including DSN posted lower profit last year as commodity prices fell in the global market on concern of slowing demand from China and India, two of the world’s largest CPO buyers.

But Andrianto expects palm production to be more effective longer term. He said the average of DSN’s palm trees increased this year to 7.8 years from 7.1 in 2012.

“With maturing palm trees, we will have better tonnage fruit production per hectare. With the plant yield increases, the [production] cost will decline,” Andrianto said.

In the next seven years, the company will continue cultivating 120,000 hectares of unplanted land for palm plantations and two palm fruit mills.

DSN raised Rp 508.75 billion in its IPO last week, and some of the funds raised will be used for cultivating land.

The size of the IPO was reduced from an earlier plan of 21 percent of DSN’s capital. Ferry Budiman Tanja, president of underwriter Ciptadana Securities said it was “an underwriting strategy to keep the demand in secondary market high.”

DSN debuted on the Indonesia Stock Exchange on Friday, rising 0.5 percent to close at Rp 1,860, up from its IPO price of Rp 1,850. By comparison, the benchmark stock measure the Jakarta Composite Index jumped 3.3 percent.

DSN, which has 17 subsidiaries, has palm oil plantations in East Kalimantan.

Kalimantan is where many of the country’s palm oil producers and oil companies have their plantations.