Sungai Budi to Invest $115m on Two Units
Sungai Budi Group, a palm oil conglomerate, will spend $115 million on two subsidiaries in agriculture and trading next year for their expansion.
Tunas Baru Lampung, a company that is engaged in the manufacturing and distribution of agricultural-based consumer products such as palm oil and sugar, plans to spend Rp 900 billion ($94 million) in capital expenditure. Budi Acid Jaya, a unit that produces tapioca flour, is setting aside Rp 200 billion for spending.
Tunas Baru’s capital expenditure next year will be 35 percent financed by internal cash and 65 percent by loan from Bank Rakyat Indonesia, its vice president director Sudarmo Tasmin said.
“Part of the capex will be used to build a crude palm-oil processing plant in Sukadana village in Lampung that costs Rp 60 billion to Rp 70 billion,” Sudarmo said.
Tunas Baru also plans to expand its palm-oil plantation by investing Rp 300 billion and its cane plantation at a cost of Rp 80 billion to Rp 100 billion. Another Rp 100 billion will be spent to help finance the construction of a sugar refinery and for ordinary expenses.
“Sugar revinery will be operational in the first half of 2013 with a capacity of 600,000 tons per day,” Sudarmo said.
Meanwhile, Budi Acid will also use the same proportion, at 35 percent internal cash and 65 percent loan, to help finance its capital spending. It will used a loan from Bank Mandiri.
“Capex will be used to build a tapioca flour in Madiun [East Java] that costs Rp 50 billion,” said Marwati Wongso, the company’s corporate secretary.
It will spend Rp 30 billion on two biogas power plants and another Rp 70 billion for other types of power plants, he said.
Sungai Budi, established in 1947, is one of the leading agribusiness groups in Indonesia. It was founded and controlled by Widarto, one of the richest people in Indonesia, according to GlobeAsia.