JAKARTA (TheInsiderStories) – Palm oil producer, PT Sampoerna Agro Tbk (IDX: SGRO) released two series of domestic bonds and SUKUK with total amount Rp569.5 billion (US$40.10 million) to pay the debt and for working capital. Series A amounting to Rp127.665 billion have a coupon rate 9.45 percent and three years of tenure.
Then Series B valued of Rp46.95 billion have an interest rate of 10.35 percent with five years term. The SUKUK also have two series. Series A worth of Rp236,64 billion have three years period with a repayment installment of around Rp22.36 billion and series B of Rp158.25 billion with a five years tenure with a repayment installment of around Rp16.37 billion.
Sampoerna Agro explained, around 80 percent of the proceeds will use for early debt repayment owned by the company and the unit, PT Usaha Agro Indonesia. The rest for working capital needs. The two debt securities received A- rating from PT Pemeringkat Efek Indonesia.
The issuer set the public offering period of the bonds on March 8 – 10, an allotment date on March 15, and will be listed on the Indonesia Stock Exchange on March 18. Acting as joint lead underwriters for the issuances are PT BNI Sekuritas, PT Indo Premier Sekuritas, PT Mandiri Sekuritas, and PT Sucor Sekuritas.
Sampoerna Agro targeting the crude palm oil (CPO) production will increase around 18 percent in this year from 600.956 tones of CPO in 2020. To support the target, the producer prepared capital expenditure up to Rp600 billion mostly for new plantings and replanting.
During 2020, total export valued of palm oil and its derivative products jumped by 13.6 percent to $22.97 billion from a year ago. According to the head Indonesia’ Palm Oil Fund Management, Eddy Abdurrachman, the figure was supported by the increasing prices of palm oil products in the international markets.
In term of volume, the palm oil export was 34 million tones (MT) of crude palm oil (CPO), lower than 2019 at 37.39 MT of CPO. He noted, the Indonesian palm oil industry has begun to recover after facing the difficult situation during the virus outbreak.
In this year, the Indonesian Palm Oil Entrepreneurs Association (GAPKI) sees a gradual growth in CPO export driven by an anticipated global economic recovery. The organization also predicted that around 37 MT of CPO would be exported in 2021. The producers also estimating to export around 24.92 MT of CPO, an 18 percent decline compared to last year, as main export markets such as European Union, China and India are impacted by the diseases.
While, The Indonesian Vegetable Oil Industry Association projected that 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 and the conducive climate. 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 organization 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.
Earlier, the senior economic minister, Airlangga Hartarto, optimistic that the CPO prices in 2021 would be higher than this year to around US$668 per MT from $650 per MT in 2020. The triggered are the demand for palm oil is expected to recover and is also driven by the global economy which will be reopen starting next year.
Then, sustainability of biodiesel policies in Indonesia also an increases demand by the major trading partners. He said palm oil has had a huge impact on the Indonesian economy. In addition, the contribution of these sector to exports values reached $20 billion per year.
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