Indonesia has been pushing for greater local use of edible oil-based biodiesel to cut its fossil fuel import bill and create more demand for palm oil, of which it is the world’s biggest producer and exporter followed by Malaysia. (Reuters Photo/Samsul Said)

Sungai Budi Pledges $125m for Plant Expansion in 2015

BY :ELLY RAHMAWATI

JUNE 08, 2015

Jakarta. Sungai Budi, one of Indonesia’s largest agriculture-based manufacturers, has set aside Rp 1.67 trillion ($125 million) to fund construction of new sugar and palm oil plants this year.

The group controls listed companies Tunas Baru Lampung, which operates in palm and sugar production, and Budi Starch & Sweetener, specializing in producing tapioca and artificial sweetener.

Tunas Baru will spend Rp 1.5 trillion this year for, among others, constructing sugar mill in Terbanggi in Lampung, said Sudarmo Tasmin, Tunas Baru’s vice president over the weekend.

The plant will have a capacity of processing 8,000 tons of cane per day (TCD) and is expected to start operation by the end of next year, Sudarmo said.

Tunas Baru also plans to build an Rp 200 billion biodiesel plant, which is estimated to contribute 35 percent of the company revenue in 2017, he said.

In addition, Tunas Baru will spend Rp 300 billion for expanding its plantation area.

Budi Starch would spend Rp 175 billion this year for making steam power plant in Abung Way, Lampung with a total capacity of 12 megawatt, and fructose plant with a capacity of 72,000 tons per year in Krian, East Java, said Budi Starch’s finance director Mawarti Wongso.

Budi Starch targets an increase in sales to Rp 2.5 trillion this year, up from 9.6 percent from Rp 2.28 trillion in 2014.

"The net profit is rather difficult to predict, because the exchange rate is still fluctuating with the weakening trend. We still have to write off unrealized losses," said Mawarti.

Investor Daily

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