JAKARTA. Although the price of crude palm oil (CPO) is currently slumping, PT Jaya Agra Wattie Tbk continues to be enthusiastic about expanding its oil palm plantations. This year, the issuer with the stock code JAWA is ready to add a new planting area of ​​3,652 hectares (ha).

Bambang S. Ibrahim, Finance Director of Jaya Agra, said that new planting of oil palm areas requires a cost of IDR 52 million per ha. Thus, Jaya Agra must spend IDR 189.90 billion for new plantings.

Jaya Agra has a location permit and Land Use Rights (HGU) in South Kalimantan covering an area of ​​35,186 ha. Until the end of last year, the oil palm plantations that had been planted reached 23,088 ha. A total of 19,088 ha have core plantation status, the remaining 4,000 ha are plasma plantations.

In fact, Jaya Agra also has the ambition to increase the area of ​​its HGU land. Currently, Jaya Agra is targeting a plantation area in Sulawesi covering 30,000 ha. "A survey is currently being conducted," said Bambang.

Until the first quarter of this year, Jaya Agra's CPO production from core plantations has still grown by 30.7%. In the first quarter of last year, CPO production from core plantations was 9,862 tons. Meanwhile, in the first three months of this year, production from core plantations was 12,891 tons.

The increase in CPO production in the first quarter of this year, said Bambang, was due to the increased productivity of Jaya Agra's fresh fruit bunches (FFB). "The age of the oil palm plants that produce is increasing, so production is also being pushed up," explained Bambang.

Throughout this year, Jaya Agra is targeting CPO production of 51,168 tons, or an increase of 11% compared to 2012 which was only 46,298 tons. Likewise, Jaya Agra's TBS production is targeted to increase to 240,200 tons from the previous year's 214,071 tons.

To balance the increasing TBS production and the increasing land area, Jaya Agra intends to build a new palm oil mill in South Kalimantan with a capacity of 45 tons of TBS per hour. The investment value is estimated to reach IDR 135 billion. If the construction of this factory is completed, Jaya Agra will have two palm oil mills with a production capacity of 90 tons of TBS per hour.