JAKARTA (TheInsiderStories) – As a response to low crude palm oil (CPO) price, PT Astra Agro Lestari Tbk (AALI), a subsidiary of diversified group PT Astra International Tbk (ASII) plans to use most of its capital expenditure in 2016 in developing higher value added downstream projects.
The company sets aside Rp1.82 in capital expenditure (capex) in 2016, down 25-30 percent from this year, compared to Rp2.6 trillion in 2015. The realized capex up until third quarter 2015 stood at Rp2.08 trillion, indicating that its 2015 capex is unlikely to be fully realized.
Finance Director of Astra Agro Rudy Chain said during a media workshop in Sentul, Bogor last Friday that the company will be more focused in downstream venture, which offers higher-value added. Portion of the capex will be used to build one CPO mill in Central Sulawesi with capacity of 45 tons per hour. The CPO mill will further process the CPO into butter, cooking oil, soap and others.
Currently, CPO price is still hovering at below US$ 750 per ton. Some industry players said the CPO price could edge up given expected higher demand for biofuel, in line with the government’s plan to implement the B-20 fuel next year from B-15 this year. B-15 applies that 15 percent of biodiesel fuel is mixed with biofuel. (*)