Listed palm oil grower PT Dharma Satya Nusantara Tbk. posted a 46 percent rise in its Crude Palm Oil (CPO) sales in 2019 to 666,000 tons and expecting prices of commodities to continue to strengthen is planning to build two new mills, the company said in a press release.
The company in a press release uploaded on the company’s website on the weekend attributed the increase in production from two palm oil mills acquired by the company in end of 2018 as well as the sales of remaining 2018 stocks. Its 2019 CPO production also showed a 25 percent rise to 610,000 tons with 16 percent of that coming from two newly purchased oil palm plantations.
“We estimate that the price of CPO will continue to move upwards in 2020 compared to last year, because of reduced CPO stocks and the seriousness of the implementation of the mandatory biodiesel in Indonesia and Malaysia, Dharma Satya Nusantara President Director Andrianto Oetomo said in the press release dated January 31, 2020.
Andrianto said that CPO sales contract prices in the last quarter of 2019 were stronger than in previous quarters in line with rising global prices resulting from the lower CPO stocks in Indonesia and Malaysia, the world’s two top producers which account for some 85 percent of the market together, and also lower stocks of other vegetable oils.
He said that in 2020, the company is planning to continue its replanting program and also build two new palm oil mills to meet rising outpost from the oil palm plantations.
“In 2020, we are readying a capital of around Rp 800 billion and Rp 1 trillion, mostly to develop new mills, complete the construction of Bio-CNG facilities, new planting, construction of infrastructure and also the modernization of factory facility in the wood product segment,” Andrianto said.
Dharma Satya Nusantara had a total oil palm planted surface of 112,450 hectares, 101,799 of them already producing. This surface was up 4,000 hectares compared to the previous years as the company planted new crops. The company already has 10 palm oil mills with a total production capacity of 570 tons of Fresh Fruit Bunches per hour.
In the company’s wood product segment, it also posted a 15 percent increase in sales of panel products to reach 97,000 m3 in 2019. The sales brought in Rp 572 billion, or 13 percent up from sales in the previous year. Lower sales, however, was registered for engineered flooring product which went down by 15 percent to 932,000 M2 following lower export market demand.