ASEAN KEY DESTINATIONS
Rajawali may seek Rp 1.8 trillion for new plant
State-owned agribusiness firm PT Rajawali Nusantara Indonesia (RNI) is mulling over the possibility of seeking Rp 1.8 trillion (US$143.9 million) from external funds to finance the construction of a new sugar plant, which is expected to boost its output.
RNI president director Ismed Hasan Putro said that his firm would review the possibility of loans to build a new refined sugar plant this year.
“We hope that we can commence the groundbreaking for the plant in May or June this year,” he told The Jakarta Post without confirming whether the loans had been secured.
The new plant is planned to have a total production capacity of 6,000 tons of refined sugar per day, thus substituting for three of its existing sugar plants.
RNI, which was forecast to suffer Rp 300 billion in losses because of the importation of refined sugar last year, would carry out a number of efficiency efforts, Ismed said.
The firm planned to shut down one of its sugar plants this year, another next year and a third in 2017, he added.
RNI, which operates diversified businesses ranging from sugar to minimarts, had previously stated that a huge volume of refined sugar imported into the country last year put pressure on all of Indonesia’s sugar producers.
Ismed told reporters that of the 52 sugar plants owned by state-owned enterprises (SOEs), only 32 were in full operation last year.
“I estimate that all sugar plants in the country suffered around Rp 1 trillion in losses last year, with many state-run sugar producers paying their employees with sugar, not money,” he said.
RNI hoped that it could overcome its current predicament by getting stimulus or capital injections (PMN) from the government this year, he added.
The State-Owned Enterprises Ministry has proposed that the House of Representatives approve its plant to provide Rp 280 billion in stimulus for RNI, in addition to another Rp 47.7 trillion for 34 other SOEs.
“We are optimistic that we can earn around Rp 500 billion in profits in 2019 if we get the stimulus funds,” Ismed said.
RNI would use the injected capital, if approved, to repair irrigation systems on its sugarcane plantations in Subang and Majalengka, both in West Java.
“We haven’t planted our fields in either area for dozens of years because their current irrigation systems solely rely on rain water,” he said.
With new irrigation systems, RNI would be able to plant sugarcane in both areas even during dry seasons, he added.
Besides upgrading the irrigation systems, the firm would also use the PMN funds to develop superior seeds as well as to develop its human resources, Ismed said.
The firm, which held total assets worth Rp 7.4 trillion in 2013, was rated BBB for its financial health that year. During the same year, the firm pocketed only Rp 33.2 billion in net profits while it had liabilities amounting to Rp 5.9 trillion. - See more at: http://www.thejakartapost.com/news/2015/01/24/rajawali-may-seek-rp-18-trillion-new-plant.html#sthash.jwSJ1sUs.dpuf
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