TPS Food to expand oil palm planted acreage

Mon, 04/23/2012 - 10:44

Jakarta-listed vermicelli maker PT Tiga Pilar Sejahtera Food (TPS Food) will allocate US$50 million this year to finance oil palm planting program on a combined 10,000 ha concessions.

Company Finance Director Sjambiri Lioe was quoted by Kontan on Monday as saying that the planting program will be implemented at its concessions in Central Kalimantan, West Kalimantan, and South Sumatra.

The program will increase the company’s total planted area to 23,500 ha.  Meanwhile, acreage in production stage will also increase this year to 7,800 ha from 4,000 ha.

TPS Food, which is more known as a vermicelli producer, and recently emerged as a major producer and distributor premium-quality rice products, has started the oil palm business only in recent years.  Through subsidiary PT Bumi Raya Investindo, the company holds oil palm concession area of 80,000 ha.  It also operates a palm oil mill in South Kalimantan with production capacity of 45 tons per hour.

TPS food recently sold its 35 percent stake in Bumi Raya to US agribusiness giant Bunge Agribusiness.  The two companies have injected equity capital worth $123 million into Bumi Raya.  “Financing for the new planting program comes from the results of the cooperation with Bunge,” Sjambiri said.

“The prospect of the palm oil sector is quite bright.  We’re confident that its contribution (to company overall income) will continue to rise,” he added. 

Last year, TPS Food saw sales soared by 148.51 percent to Rp 1.75 trillion from Rp 705.22 billion in 2010.  In comparison, the net sales from the palm oil business was only Rp 80.68 billion. (rei) 

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