JAKARTA (TheInsiderStories) – The producer of crude palm oil (CPO), PT Tunas Baru Lampung Tbk (IDX: TBLA), plans to sell global bonds total amount of US$400 million with various tenures, said the management in public announcement. The unit of Sungai Budi Group plans to get approval on the bond issuances from the shareholders on Monday (03/15).
According to the management, the issuer set an indicative target for interest rate of the notes around 6 – 8 percent per year. The proceed from the global bond issuance, said the company will be uses to increase the liquidity, strengthening the financial conditions, and extending the company’ debt maturity profile.
Tunas Lampung‘ have a mature Guaranteed Senior Notes amounted to $250 million with coupon rate 7 percent issued by its subsidiary, TBLA International. The bonds will mature in 2023. Then Rupiah bond amounted to Rp1.5 trillion will due on 2025, explained the management.
In the first quarter of 2021, the plantation firm targeting a 120 ton per day (TPD) refined glycerine plant and a PFAD 110 TPD Re-esterification plant enter the commissioning stages. Then, for the 1,500 TPD biodiesel plant and 2,500 TPD refinery, the completion is expecting in fourth quarter of this year. The four factories are located in Lampung.
To support the targets, Tunas Lampung has prepared a capital expenditure around Rp340 billion ($23.61 million). Beside the four projects, Tunas Lampung also will continue to develop the palm oil and sugar business to meet the demand.
During the nine months of 2020, the CPO producer posted a net sales of Rp8.07 trillion, grew by 27 percent in annual basis due to the increase in the sales volume of olein, FAME, sugar, glycerine, margarine and soap also selling price. Recently, the Indonesian Palm Oil Association (GAPKI) sees a gradual growth in CPO exports starting this year driven by an anticipated global economic recovery.
The organization also predicted that around 37 million tones (MT) of CPO would be exported in 2021. At the same year, said the secretary general, Togar Sitanggang, the producers is estimating to export around 24.92 MT of CPO, down 18 percent compared to last year, as main export markets such as European Union, China and India are impacted by the diseases.
Earlier, the Indonesian Vegetable Oil Industry Association (GIMNI) 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 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.
While, senior economic minister, Airlangga Hartarto, predicted Indonesia’ palm oil price will touched $668/MT of CPO in 2021 from the current price around $650 MT of CPO. He adds, 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.
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