MARKET DEVELOPMENT
Provident Agro Invests $31.75m in Two Processing Facilities
Provident Agro Invests $31.75m in Two Processing Facilities
13/06/2014 (Jakarta Post) - Publicly listed plantation firm Provident Agro has made Rp 375 billion (US$31.75 million) in investments for its two new palm-oil processing facilities, which are now under construction.
Provident finance director Devin Antonio Ridwan said Wednesday the company would commence operation of the two plants in the fourth quarter of 2015, each of which will have a production capacity of 45 tons of crude palm oil (CPO) per hour.
Located in the company’s plantation areas in South Sumatra and West Kalimantan, each of the facilities is being built on a 30-hectare plot of land.
“The construction of the plants will take about two years. Once the plants begin operation, our production capacity will increase to 195 tons an hour, from the current 105 tons per hour,” he said.
At the moment, the company has three plants in operation.
Devin said the total investment needed to finance the construction of the facilities stood at Rp 375 billion. He added that about 80 percent of the funds came from bank loans from Bank Permata and DBS Indonesia, while the rest was from the company’s own cash.
The company, according to Devin, is preparing Rp 500 billion for this year’s capital expenditure (capex), some of which will be used to finance the constructions of the facilities.
Some of the capex will also be allocated to supporting the company’s plan to expand its business outside Sumatra and Kalimantan, by acquiring 18,000 hectares of land in Gorontalo, northern Sulawesi.
Provident Agro is aiming to increase its CPO production by 23.45 percent to 100,000 tons this year, from 81,000 tons produced last year. Its first-quarter CPO output rose by 21 percent to 22,374 tons, compared to 18,483 tons during the first three months of 2013.
It is also targeting its fresh fruit bunch (FFB) production hitting 350,000 tons — up by 34.8 percent compared to last year — to help meet its CPO production target. During the first quarter, Provident saw its FFB production rise by 39 percent year-on-year (y-o-y) to 75,616 tons.
The company currently owns 11 plantations, with 45,297 hectares of crops, 52 percent of which are newly planted and have yet to bear fruit.
The company booked a net loss of Rp 417.13 billion last year as it was hit hard by plunging global CPO prices and currency volatility — just like other palm-oil plantation firms in the country.
This year, Devin said, the company was upbeat about registering profits, thanks to improving global commodity prices.
The company managed to book Rp 85.22 billion in net profits between January and March this year. In comparison, it suffered a net loss of Rp 26.41 billion in the same period last year.
Its revenue went up by 60.2 percent y-o-y to Rp 244.41 billion.
Devin said that the surge in Provident’s first-quarter performance was propped up by a significant increase in its average selling price (ASP) during the quarter, which went up by 37 percent y-o-y to hit
Rp 8,836 per kilogram of CPO.
Provident plans to issue 79.56 billion of new shares during its preemptive rights issuance on June 30, with a sale price of Rp 420 per share, having secured approval from its general shareholders’ meeting.
The proceeds, which are expected to reach Rp 33.41 billion, would be used to pay off its debt to Singapore-based Deira Cayman Ltd., which amounts to $1.2 million.
Following the right issuance, Deira Cayman will acquire 1.12 percent of the company’s total shares.
Provident finance director Devin Antonio Ridwan said Wednesday the company would commence operation of the two plants in the fourth quarter of 2015, each of which will have a production capacity of 45 tons of crude palm oil (CPO) per hour.
Located in the company’s plantation areas in South Sumatra and West Kalimantan, each of the facilities is being built on a 30-hectare plot of land.
“The construction of the plants will take about two years. Once the plants begin operation, our production capacity will increase to 195 tons an hour, from the current 105 tons per hour,” he said.
At the moment, the company has three plants in operation.
Devin said the total investment needed to finance the construction of the facilities stood at Rp 375 billion. He added that about 80 percent of the funds came from bank loans from Bank Permata and DBS Indonesia, while the rest was from the company’s own cash.
The company, according to Devin, is preparing Rp 500 billion for this year’s capital expenditure (capex), some of which will be used to finance the constructions of the facilities.
Some of the capex will also be allocated to supporting the company’s plan to expand its business outside Sumatra and Kalimantan, by acquiring 18,000 hectares of land in Gorontalo, northern Sulawesi.
Provident Agro is aiming to increase its CPO production by 23.45 percent to 100,000 tons this year, from 81,000 tons produced last year. Its first-quarter CPO output rose by 21 percent to 22,374 tons, compared to 18,483 tons during the first three months of 2013.
It is also targeting its fresh fruit bunch (FFB) production hitting 350,000 tons — up by 34.8 percent compared to last year — to help meet its CPO production target. During the first quarter, Provident saw its FFB production rise by 39 percent year-on-year (y-o-y) to 75,616 tons.
The company currently owns 11 plantations, with 45,297 hectares of crops, 52 percent of which are newly planted and have yet to bear fruit.
The company booked a net loss of Rp 417.13 billion last year as it was hit hard by plunging global CPO prices and currency volatility — just like other palm-oil plantation firms in the country.
This year, Devin said, the company was upbeat about registering profits, thanks to improving global commodity prices.
The company managed to book Rp 85.22 billion in net profits between January and March this year. In comparison, it suffered a net loss of Rp 26.41 billion in the same period last year.
Its revenue went up by 60.2 percent y-o-y to Rp 244.41 billion.
Devin said that the surge in Provident’s first-quarter performance was propped up by a significant increase in its average selling price (ASP) during the quarter, which went up by 37 percent y-o-y to hit
Rp 8,836 per kilogram of CPO.
Provident plans to issue 79.56 billion of new shares during its preemptive rights issuance on June 30, with a sale price of Rp 420 per share, having secured approval from its general shareholders’ meeting.
The proceeds, which are expected to reach Rp 33.41 billion, would be used to pay off its debt to Singapore-based Deira Cayman Ltd., which amounts to $1.2 million.
Following the right issuance, Deira Cayman will acquire 1.12 percent of the company’s total shares.