MAY 2013 - Kresna Securities

Monthly Bulletin
MAY 2013
PLANTATION
CPO price
(US$/ton)
1,300
1,200
1,100
1,000
900
800
700
Jan-12
Apr-12
Jul-12
Source: Bloomberg, Kresna Research
Rubber price (US$/ton)
350
325
300
275
250
225
200
Oct-12
Jan-13
Apr-13
point was needed). Lastly, 20.0% of total plantation area for
plasma obligation is to be strengthened, as the current
system is still ineffective. The Indonesian Oil Palm
Association (GAPKI) opposes the acreage limitation, saying
it will hurt the plantation business in the country as
production growth will be impeded. Source: Bisnis
Indonesia, The Jakarta Post
• Moratorium prolonged; Indonesia CPO exports top 5-
year high. Indonesia Minister of Forestry ensures that
deforestation moratorium, which scheduled to end as of
May13, will be prolonged. He claims the regulation has been
able to decrease deforestation pace in the country
dramatically since it first implementation in 2011. Indonesia
Oil Palm Association (GAPKI) strongly opposes the idea,
stating it will disturb plantation industry significantly.
Further, CPO exports from Indonesia surged to the highest
level in Feb13 after China and Pakistan boosted its
purchase due to low prices, as well as increasing demand
during Lunar New Year fesitival. Shipments of CPO and
PKO jumped 9.1% MoM from Jan13 1.9MT, the highest
monthly sales since 2008. Source: The Jakarta Post
• Slowdown in export. Indonesia Oil Palm Association
(Gapki) recorded a weakening in CPO and its derivatives
exports during 1Q13. In Jan13, export topped 2.1m tons,
and down by 14.0% MoM to 1.9m tons in Feb13, while in
Mar13 declined further to 1.7m tons. India remained the
largest importer of Indonesian CPO, purchasing 1.9m tons
(+22.5% YoY) during 3M13, followed by China of 0.6m tons
(+31.0% YoY). Gapki predicts CPO prices during Apr13-
May13 to be around US$830-870/ton. Source: Investor
Daily
175
Jan-12
Apr-12
Jul-12
Source: Bloomberg, Kresna Research
Sector:
• Regulation changes to be launched in April. Permentan
No.26/2007 is currently being revised by the Indonesia
Ministry of Agriculture, with changes in plantation acreage
limits, operating license procedure and plasma
implementation. First, each plantation company group
(same management and/or ownership) is only allowed to
own a maximum of 100,000ha plantation, yet existing
ownerships that have exceeded the new threshold before
this amendment finalized in Apr13 are not subject to any
penalty. Second, an operating license will be effective after
receipt of a recommendation from the state government
(Directorate General of Agriculture) and the award of a
license from local government (previously only the second
Oct-12
Jan-13
Apr-13
AALI: US$350.0m capex, 1Q13 profit down 5.7% YoY. Astra
Agro Lestari (AALI) recently announced that it plan to spend
around US$350.0m for capex this year, to be used for
constructing four palm oil mills (expect 2 mills completion by
2013 and the other 2 by 2014) and a refinery. Each mill will cost
around US$15.0m, with 45.0 tons/hour capacity. The company
so far has obtained around US$200.0m loan from 4 banks, and
still seeks for another US$200.0m to fund the capex. As of
1Q13, AALI booked Rp356.4bn net profit, down 5.7% YoY, while
having 5.5% increase in revenue. This was mainly due to lower
ASP despite growth in CPO sales volume. Source: Bisnis
Indonesia, The Jakarta Post, Company
BWPT obtains Rp722.0bn loan. BW Plantation (BWPT) has
obtained Rp722.0bn loan from BNI – Rp622.0bn is for
investment (8 years maturity), while the remaining Rp100.0bn is
for working capital (1 year maturity). Both have 10.0% per
annum interest rate. The company is still looking for another
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