BSP plans to expand oil-palm plantations

The Jakarta Post, Jakarta

Publicly listed PT Bakrie Sumatera Plantations (BSP) plans to expand its oil-palm and rubber plantations to about 83,000 hectares this year by acquiring more land for new plantations, and purchasing existing plantations.

President director Ambono Januarianto said Monday that the expansion plan would include 20,000 hectares of oil palm and rubber plantations that BSP would acquire from other companies, and 10,000 hectares of its own land that would be planted with oil palms and rubber trees at a total cost of Rp 154 billion (US$17 million).

"We have acquired 7,000 hectares from PT Sumbertama Nusa Pertiwi and we need to acquire another 13,000 hectares," he told reporters after the company's annual shareholders meeting.

He said that BSP had recently acquired all of Sumbertama Nusa Pertiwi plantations in Jambi for Rp 260 billion. Sumertama operates 7,000 hectares of plantations, of which 4,300 hectares are under oil palms.

Currently, BSP has about 53,000 hectares of plantations in Sumatra and Kalimantan, of which 62 percent are planted with oil palms and 38 percent with rubber trees. It also operates three CPO refineries and three rubber processing plants in Sumatra.

Ambono said that the expansion was part of a long-term plan to triple its plantation area to 150,000 hectares by 2012.

"Assuming that we will plant new trees in the additional areas, we will need to spend about US$270 million," he said.

Last year, BSP commenced the construction of a biodiesel plant with a capacity of 100,000 tons per year in Batam in collaboration with a local firm. The plant is expected to come onstream next year.

Ambono said that BSP would boost its CPO production to 180,000 tons this year from 158,000 tons last year, and its rubber production to 38,000 tons from 27,000 tons previously.

During the meeting, the company announced that it would pay out a dividend of Rp 34 billion, or about 20 percent of its Rp 172.8 billion net profit for 2006.

"We've decided to disburse only 20 percent of our profit as we need to retain most of it to support our expansion plan," he said, adding that the decision was in line with the company's dividend policy.

He said that BSP was targeting an increase of 20 percent in its net profit to Rp 207.5 billion this year from Rp 172.9 billion last year, and a rise of 35 percent in its revenue to Rp 1.5 trillion from Rp 1.1 trillion previously.