PTPN XI Focus on Efficiency & Diversification

PTPN XI President Director Moh Cholidi said that for increasing revenue, there are many things that can be done, especially amidst of declining sugar price. One of them is via operational cost cutting. `There are still costs we paid last year, such as external power, alternative fuel, and electricity cost. We can lower these, there is still a slot although the sugar price has a tendency to decrease,` he said in Surabaya, Monday (3/13). Last year, PTPN XI booked Rp 132 billion profit and this year it is projected to be Rp 86 billion. He explained that this year the company did not set a too high profit target because there are some costs that must be allocated to investment this year. One of them is to increase the capacity of PG Djatiroto and PG Assembagoes sugar factories with a total value of around Rp 1.6 trillion. Other than that, there are still depreciation and bank interest, thus this year's profit projection cannot be set too high. `However, we are striving to surpass that target,` he said. PTPN XI Operational Director Daniyanto said this year the company is targeting sugarcane product diversification other than sugar. This is done as an alternative source of income for the company because the government controls the price of sugar and on the other hand the cost of production increases alongside labor wages and sugarcane raw material. Some of the sugarcane derivatives that will be produced are fermented pellet bagasse or fermented sugarcane pulp, and bio fertilizer. `We are also increasing the variant of sugar production, such as brown sugar, as well as utilizing our assets, which is constructing housing or apartment in our area,` he said. In order to increase production yield, PTPN XI is planning to expand the right to manage (HGU) area by 1,000 hectares every year. The targeted area includes Jember, Bondowoso, and Situbondo with potential HGU area of 3,000 hectares to 4,000 hectares. On the other hand, former PTPN XI President Director, Dolly Parlagutan Pulungan, who recently has just been replaced, hopes that the new management team has a right strategy in facing various challenges, such as economic condition, weather, and limited sugar price. He thinks that PTPN XI has good potential this year, especially since the old management has prepared a strong funding and equity. `I prepared Rp 500 billion for land acquisition and around Rp 2.4 trillion for company development of production capacity, in which Rp 650 billion comes from state capital participation and the rest from us,` he said. The financing source for this year's expansion also comes from banking, which is from BRI and BNI with a loan value of Rp 1.8 trillion. Throughout last year, PTPN XI's total sugar production reached 142,000 tons, with the highest yield from PG Assembagoes, which is 7.08%. This year, the total sugar production target is 187,000 tons with a sugarcane yield that can reach 8.04%. http://industri.bisnis.com/read/20170314/99/636978/ptpn-xi-fokus-efisiensi-diversifikasi