Bakrie Sumatera to expand oil palm plantation area on surging price

The Jakarta Post, Jakarta | Thu, 05/15/2008 12:35 PM

Publicly listed plantation company PT Bakrie Sumatera Plantations plans to add 50,000 hectares to its oil palm plantation by 2010 with an investment of US$260 million.

"Thirty million dollars will come from Bakrie Sumatera's subsidiary, PT Bakrie Sentosa Persada (BSP). We will get $80 million from an international consortium and the remainder from local bank loans," president director Ambono Janurianto said Wednesday.

Bakrie Sumatera established its subsidiary palm oil producer BSP in June 2007.

Bakrie Sumatera is now operating on a plantation 87,415 hectares large, of which 67,745 hectares is dedicated to oil palm and the rest to rubber.

The company also acquired five oil palm plantations and one rubber factory last year, in addition to establishing BSP.

Through the acquisitions, Ambono said, the holding company was aiming to increase its palm oil production to 340,000 tons this year, from 180,000 tons in 2007, and its rubber production to 40,000 tons from 29,500 tons.

Bakrie Sumatera, the country's fifth-largest plantation developer in terms of market value, booked a 794 percent increase in its first-quarter net profit to Rp 18.5 billion ($1.99 million), compared with the same period last year.

"The year 2007 was a great year for palm oil and natural rubber as prices surged to record levels," said president commissioner Soedjai Kartasasmita.

In 2007, the price of crude palm oil ranged from $600 to $800 per ton on the world market, almost doubling in price compared to the previous year.