Publicly listed firm, PT Dharma Satya Nusantara Tbk (IDX: DSNG) allocated funds up to Rp1 trillion (US$71.43 million) in this year to complete the development of palm oil mills - Photo by the Company

JAKARTA (TheInsiderStories) – Publicly listed firm, PT Dharma Satya Nusantara Tbk (IDX: DSNG) allocated funds up to Rp1 trillion (US$71.43 million) in this year to complete the development of palm oil mills in Kalimantan. The plant in East Kutai, East Kalimantan, with a processing capacity of 60 tones per hour is targeted to operate in the second half of 2021.

Another factory being built is in Nangabulik, Central Kalimantan with a processing capacity of 45 tones per hour. Total investment of both factories around Rp393 billion. With the addition of the two mills, the company will have 12 plants with a total capacity of 675 tones per hour or 1.2 million tones of crude palm oil (CPO).

Beside, the issuer aimed to build a bio-compressed natural gas (Bio-CNG) plant, following the successful construction of the previous plant, which was completed last year with a capacity of 280 meter cubic per hour and produces an electricity output of 1.2 megawatts. The management is targeting the new Bio-CNG plant to operate commercially in 2022.

The Bio-CNG Plant facility located in East Kutai and was built since the end of 2018 aims to reduce the greenhouse gas emissions and saving up to two million liters of diesel per annum. He explained that the investment for the plant Rp90 billion.

The Bio CNG Plant, will create a reduction in greenhouse gas emissions of more than 50,000 tons of CO2 or a reduction of 11,000 units of passenger vehicles or the equivalent of recycling 17,000 tons of waste. According to him, the Bio-CNG Plant not only has an impact on cost efficiency, but also provides additional income to the company.

Currently, the manufacturer has planted area of ​​112,450 hectares. After the completion of the construction in 2021. The firm also has a wood processing factory that produces panels, engineered flooring and engineered doors in collaboration with Japan’ Daiken Corporation.

the Indonesian Vegetable Oil Industry Association projects that the CPO production in 2021 will grow by around 3 percent to 48.4 MT of CPO from this year’ 47 MT of CPO, inline with the increasing of prices. Crude Palm Kernel Oil production also will increase by about 4 percent from 4.6 MT of CPO to 4.8 MT of CPO in 2021.

The executive director, Sahat Sinaga, also believed that there will be an increases in domestic palm oil consumption by around 14 percent to 19.75 MT of CPO in 2021. Its projected that starting next year, the domestic consumption palm oil for food will be around 8.8 MT of CPO, for non-food items around 1.67 MT of CPO and for biodiesel around 9.2 MT of CPO.

According to him, this increases in biodiesel consumption provided the B30 program was running. While, palm oil exports in 2021 will also increase by 11 percent to 36.7 MT of CPO due to an increase in downstream palm oil product exports by around 16.6 percent to 29.29 MT of CPO. In addition, the CPO exports will experienced a decline of around 8 percent to 7.4 MT of CPO.

Previously, Senior minister for economic affairs, Airlangga Hartarto, predicted Indonesia’ palm oil price will touched $668 MT of CPO in 2021 from the current price around $650 MT of CPO. After suffered by the COVID-19 pandemic, the demand of the palm oil is expected to recover.

The rising in CPO prices was also supported by the continuation of the biodiesel policy has implemented by the government through the mandatory biodiesel 30 (B30) program. To support the growth in this sector, said the minister, the government has issued various policies and will provide funds for the replanting program that has been launched in North Sumatra, Riau and South Sumatra by President Joko Widodo.

US$1: Rp14,000

Written by Editorial Staff, Email: theinsiderstories@gmail.com