/2019/03/01/1003386156p.jpg)
ISSUER NEWS - BANDUNG. Palm plantation issuer, PT Astra Agro Lestari Tbk (AALI) has allocated capital expenditure (Capex) of IDR 1.5 trillion in 2024.
Astra Agro Lestari's CEO, Santosa, said that most of the capex funds allocated this year will be used as capital for palm replanting and maintenance of unproductive plants (TBM).
“Our capex plan for 2024 is about IDR 1.5 trillion, a slight increase compared to last year's IDR 1.4 trillion,” said Santosa at the Talk with CEO event, in Bandung, Friday night (16/2).
According to him, measured replanting must be done to prevent excess, while maintaining the stability of palm oil production and preventing it from declining.
“With the price assumption I use today, I should still be able to distribute dividends. This company has been around for 36 years, so it must distribute dividends," Santosa revealed.
Read Also: Astra Agro Lestari (AALI) Menebar Dividen Interim Rp 157,82 Miliar
In addition, Santosa stated that the replanting will target low-yield palm plants. For your information, the term yield refers to calculating palm plant productivity per hectare over a certain period.
In 2022, AALI's Fresh Fruit Bunch (FFB) yield was about 16 tons per hectare, while in 2023 it increased to 17 tons per hectare.
Furthermore, he said that the palm plantation replanting program also aims to stabilize the company's stagnant production, which often declines due to the aging of palm plants. Replanting takes a minimum of 3 years.
Astra Agro Lestari has a total of 210,000 hectares of palm plantations. Santoso mentioned that a third of the company's total palm plants were planted between 1994-1997, so they have now passed their peak production and need to be rejuvenated.
Read Also: Hadapi El Nino, Begini Strategi Astra Agro Lestari (AALI) Menjaga Produksi
Not only that, Santosa said, in stabilizing production amid the replanting cycle, AALI also relies on purchasing FFB from plasma gardens and partner farmers around the garden location. The production ratio from the core garden to the external FFB is 50:50.
“While waiting for this stabilization, AALI must continue to grow. So like it or not, our strategy is to do trading," he said.
As additional information, AALI's production last year increased by about 4.5%-5%. However, he said that the increase was not significant because the production benchmark in 2022 was low, so 2023 is a normalization.
