22/05/2008 (Reuters, India), Jakarta - Indonesia's largest listed plantation firm, PT Astra Agro Lestari Tbk AALI.JK, expects to produce more than 1 million tonnes of crude palm oil by 2010 after building more mills, the company said on Thursday.

Astra Agro, controlled by Indonesia's largest automotive distributor, PT Astra International Tbk ASII.JK, accounted for about 5 percent of Indonesia's total crude palm oil production estimated at between 17-17.2 million tonnes last year.

The company will start constructing two crude palm oil mills in east Kalimantan next year, said Bambang Palgoenadi, Astra Agro's research and development director.

Each mill will have a capacity to process 45 tonnes of oil palm fruits per hour. "The new mills will process oil palm fruits from plantations that we planted in 2003-2005," he said, adding that the new mills would allow output to top 1 million tonnes."

The official did not say how much the company planned to invest in the two mills.

The company now has 20 mills with total capacity to process 910 tonnes of oil palm fruits per hour.

Astra Agro expects to produce 990,000 tonnes of crude palm oil this year, up from 920,613 tonnes in 2007.

In the first quarter of this year, the company's net profit climbed to 827.05 billion rupiah ($89.65 million), compared with 268.85 billion a year ago, while revenue more than doubled to 2.27 trillion rupiah.

Analysts expect Astra Agro, which has a market capitalisation of around $4.07 billion, to book a net profit of 3.08 trillion rupiah this year, up from 1.97 trillion last year.

Indonesia has overtaken Malaysia as the world's top palm oil producer, and palm oil producers in the country have been reaping the benefit of the rising price of the commodity helped by demand for food and from the biofuel industry.

Indonesia is expected to produce 18.6 million tonnes of CPO this year, up around 8 percent from 2007.