June 19, 2008

CPF to expand sales in east Indonesia

Animal feed and processed chicken manufacturer, PT Charoen Pokphand Indonesia (CPIN), announced plans to invest IDR350 billion (US$37.5 million) this year to expand sales in east Indonesia.

Thomas Effendy, company vice president, confirmed Tuesday (June 17, 2008) plans to build a new feed mill in Lampung, South Sumatra, to compliment another one which is under construction in Makassar, South Sulawesi.

Effendy said the feed mill in Makassar will cost IDR54 billion and the one in Lampung, IDR30 billion. Both will have a capacity of 300,000 tonnes per year.

The company has already received a total of US$125 million in syndicated loans led by Citibank, he said.

CPIN seeks to increase DOCs (day-old chicks) production by 20 percent to 576 million chicks, and processed chicken output by 50 percent to 42,000 tonnes.

In 2007, the company bred 480 million chicks and produced 28,000 tonnes of processed chicken.

Furthermore, the company aims to increase its feed production capacity to 2.3 million tonnes this year from 2 million tonnes last year.

The investments will support the company''s effort to expand sales in east Indonesia to offset an expected reduction in revenue from Java due to the recent fuel price increases, Effendy added.

CPIN president Charoen Franciscus Affandy said increasing prices was one option for the company to cope with rising production costs.

The company projects revenue to hike by nearly 40 percent to IDR12 trillion this year, from IDR8.7 trillion last year.

US$1 = IDR9,306 as of June 19, 2008