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MGRO NEW FACTORY REACHES 80%

17 June 2019

Bisnis JAKARTA - Plantation Issuer, PT Mahkota Group Tbk. Delivered the construction of the refinery plant has reached 80% of the plan. Realization tends to be slower than the target set.

Corporate Secretary of the mahkota group Elvi projects that the refinery plant will be operational in August 2019. Meanwhile, the capacity of the refinery plant reaches 1500 tons per day.

Previously, the company planned that the factory could be completed in June 2019 so that the company's sales could be boosted by the product. The sales target of the issuer coded MGRO shares reached IDR 5 trillion, up 2.5 times from last year's target.

“Currently, the construction progress has reached 80% and is expected to be commsioned in August 2019.”

He told Bisnis, Saturday (15/6).

In addition to building a refinery plant, the company is also building a kernel crushing plant, with a capacity of 200 tons-400 tons per day. The capital expenditure allocation for this expansion reached IDR 330 billion.

According to Elvi, the crude palm oil (CPO) business in Indonesia is very lucrative.

Elvi added that domestic demand for CPO and its derivatives is on the rise, in line with biodiesel and oleofood programs. 

If the refinery plant is completed, MGRO can produce products that have added value and this has boosted the company's margins, for example olein or is a raw material for margarine or oleochemicals.

This year, MGRO projects that sales contribution from refineries will reach 40% of the target set.

Previously, Elvi explained that there were already quite a number of plantation companies targeting the CPO business, so there was quite intense competition. To anticipate this, the company began targeting palm oil derivative products.

As of May 2019, the realization of Mahkota Group's CPO products reached 77,502 tons or 38.12% of the target of 203,308 tons until the end of 2019. In the first quarter of 2019, MGRO's revenue reached IDR 444.3 billion, up 8.1% from IDR 411.02 billion in the first quarter of 2018 to a profit of IDR 6.03 billion in the first quarter of 2019.

Until the end of 2019, MGRO aims for a profit of Rp123 billion.

To obtain higher profits, the company must create products with added value in the form of CPO derivatives produced at the refinery plant, Mahkota Group listed on the Indonesian Stock Exchange (IDX) on July 12, 2018. The company held an initial public offering of 703.69 million shares and pocketed funds of IDR 158.33 billion.

On the Exchange floor, MGRO shares parked at the price level of IDR 820 per share. Year-to-date, MGRO connected 17.59% (Novita S. Simamora)