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Pt. Perkebunan Nusantara X.

Backgrounds

PT. Perkebunan Nusantara X (PTPN X) was established under the government regulation No.15 on 14 February 1996 on change in the status of state companies (BUMN) from PT Perkebunan (former PTP 19, former PTP 21-22 and former PTP 27), which were merged into PT. Perkebunan Nusantara X (Persero). PTPN X is based in Surabaya, East Java.

PTPN X, now has 11 sugar factories (PG) and 72,124 hectares of sugar plantations located in East Java. PTPN X plans to issue a bond valued at Rp 700 billion in 2013 to finance expansion in sugar industry. PTPN X has named PT Bahana Sekuritas and PT AAA Sekuritas as co-underwriters for the bond issue.

The fund from the bond sales will be used to refinance working capital credits carrying a high interest rate. The bank credit had been used to help finance the construction of three sugar factories now operated by PTPN X in South Sulawesi --PG Takalar, PG Bone, and PG Caming.

Part of the fund had also been used to improve the performance of 11 other sugar factories owned by the state company in East Java and to repay a debt of Rp285 billion maturing in July 2013 used earlier to build a bio-ethanol factory.

Currently PTPN X is the largest BUMN and has a number of subsidiaries operating in various business areas. PTPN X has a core business in agro industry including sugar industry and tobacco industry. In mid 2013, PTPN X planned to diversify products by operating a bio-ethanol plant using bagasse as the feedstock in Mojokerto, East Java. In addition, PTPN X has a number of hospitals in a number of cities in East Java.

Sugar Industry as the Locomotive

PTPN X is the largest state company in the sector of sugar plantation and industry. It is based in East Java. Currently PTPN X operates 11 units of sugar factory and 72,124 hectares of sugar plantations in East Java.

Sugar production of PTPN X is from sugarcanes produced through a process of defecation--sulfite treatment. So far PTPN X has produced only white crystal sugar.

Production of white crystal sugar (GKP) is a long process through extraction, chemical reaction, decomposition, evaporation, crystallization, drying and cooling.

GKP produced by PTPN X has an ICUMSA of 150 IU on the average and has met the Indonesian National Standard (SNI). Currently PTPN X has 11 units of sugar factory (PG) in eastern Indonesia.

PTPN X, Largest Sugar Producer

Currently PTPN X is the country's largest sugar producer with production reaching 494,000 tons in 2012. It has a 39.40% share of sugar market in East Java. The second largest producer is PTPN XI with a market share of 32.60%.

In 2012, the company's sugar production totaled 494.000 tons, or an increase of 8.12 percent from 2011. The sucrose content of its cane also rose to 8.14 percent. PTPN X accounted for 19.08 percent of the country's total production of sugar of 2.5 million tons that year.

The increase in its production followed the operation of new sugar factories in a number of areas such as Madura. In Madura, PTPN X has 1,200 hectares of sugar plantations to be expanded to 4,000 hectares in 2015.

The performance of business units in sugar factory has expanded form year to year. In 2011, its sugar plantations totaled 70,000 hectares, up to 72,000 hectares in 2012. Its cane milling capacity rose to 6,000 tons in 2012 from 5.6 million tons in 2011.

In 2012, PTPN X produced 494,000 tons of sugar with cane's sucrose content of 8.14 percent on the average. The production, the largest over other companies, rose 10 percent from 446.000 tons in 2011.

Its plantation productivity was the highest with production of 84.2 tons of cane per hectare, well above the country's average of 72.1 tons per hectare.

Productivity in sugar was 6.07 tons of sugar per hectare, also the highest in Indonesia, above the average productivity of 5.86 tons per hectare. Its cane's sucrose content is also the highest at 8.14 percent.

PTPN X already set aside Rp501.4 billion for capital expenditure in 2013 to be used to optimize the performance of machines before the cane milling season in May 2013.

PTPN X is set to increase its sugar production to 538,000 tons with sucrose content of cane rising to 8.3 percent in 2013. The increase in production followed the rise in production from five units of sugar factory to be optimized including PG Ngadiredjo in Kediri, PG Pesantren Baru in Kediri, PG Kremboong in Sidoarjo, PG Modjopanggoong in Tulungagung, and PG Gempolkerep in Mojokerto. Premium sugar would make up 200,000 tons of the production target of 538,000 tons in 2013 using the technology of sulfite treatment.

In addition, PTPN X will boost cultivation of bud chips to increase land productivity. PTPN X also will build new plantation lands in a number of areas such as in Bojonegoro, Tuban, Lamongan, and Madura. The company is set to expand plantations to 76,000 hectares in 2013 from around 72,000 hectares in 2012.

In PG Ngadiredjo, Kediri, the program of cogeneration will be implemented by processing bagasse to generate power.

Since 2011, PTPN X has set aside Rp 25 billion for the installation of juice smoothing machine in five of its factories. With the facility, PTPN X will produce premium sugar. Premium sugar will be packed in a 1 kg package with the brand of Gupalas. It will be intended for the end users having the criteria of GKP I with ICUMSA of 80-100 IU. Gupalas has an ICUMSA of less than 100, which is a premium sugar with quality almost equal double refined sugar which has an ICUMSA of 45.

In 2013, PTPN X plans to expand its sugar plantations to 76,000 hectares from 72,000 hectares in 2012. Around 1,000 sugar factory on the Madura island and 3,000 hectares in Lamongan, Tuban and Bojonegoro.

Tobacco Industry

Its tobacco plantations include Ajong Gayasan and Kertosari plantations in Jember, East Java and Kebonarum, Gayamprit and Wedibirit plantations in Klaten, Central Java. Its tobacco product is of export quality including the types of TBN/VBN and FIN/FIK with the grades of NW, LPW, RFU and Filler, tobacco No/ VO with the grades Dekblad, omblad, and Filler. Tobacco production of PTPN X is all for export to be used for cheroot.

A type of tobacco developed by PTPN X is Besuki Na-Oogst (BESNO). Tobacco of the Besuki type is used for wrapper, binder and Filler of cheroots.

Indonesia is major exporter of cheroot in the world with a 34 percent market share with the quality of dekblad and Omlad. Around 25 percentage points of the 34 % are cheroots of the Besuki Na Oogst type from Jember, East Java, produced by PTPN X.

In 2012 its tobacco plantations totaled 1,152.02 hectares or smaller than its plantation of 1,351 hectares in 2011. Its production VBN tobacco was 1,879 tons or down from 1,937 tons in 2011. Its Besuki Na-Oogst type totaled 297 tons or 56.3% of target of 528 tons. The production of Virginia type was 193.51 tons.

In the first half of 2013, its tobacco plantations expanded to 1,296.12 hectares in East Java and Central Java. The tobacco plantations are to be expanded to 1,325 hectares by the end of 2013.

In the first half of 2013, PTPN X exported 634.30 tons of tobacco valued at Rp97.29 billion. PTPN X sold tobacco to the cheroot factories directly in Europe, not through the Bremen Auction Center in Germany.

PTPN X sets export target at 1,685 tons valued at Rp 296.464 billion in 2013. Its total production of dry leaves (rompos) is forecast to reach 2,530 tons. Exports are to Europe and the United States.

Plastic Sack Industry

PT. Dasaplast Nusantara was established in 2004 as a joint venture between a private company and PTPN X. Originally the company was named PT Petjangan which has a long experience in producing gunny sacks for sugar and rice.

Dasaplast produces plastic sacks from Polypropylene (PP), Polyethylene (PE) Inner Bag and Leno Mesh (Warring) in Indonesia.

The types of its products include PP Woven Bag that could be used as sacks of for sugar, flour, salt, sand, fertilizer, animal feed, etc. as well as plastic shopping bags and garbage sacks.

Leno Mesh bag is a product physically similar to nets that could be used as sacks of farm products like fruits, vegetables, etc.

Its bag production is partly exported such as to other Asian countries, Europe, Middle East, South America, Canada and the United States.

Agribusiness Industry

PT. Mitratani Dua Tujuh (PT. MDT) is a joint venture between PTPN X and PT. Bahana Artha Ventura with a share split of 45.73% and 54.27% respectively.

PT. MDT produces fresh vegetables for exports mainly to Japan The company produces edanami soybean with a production capacity of 3,000 tons per year and okura with a production capacity of 200 tons per year.

Edamame soybean is a Japanese snack rich in nutrition, non cholesterol and chemical free.

Bio-ethanol Industry

PT. Energi Agro Nusantara (PT. EAN) was established in May 2013, to operate in bio-ethanol industry with a production capacity of 30 million liters per year.

Its factory is located in Mojokerto, East Java, built with a total investment of Rp 461.21 billion. The fund included Rp311.21 billion from PTPN X and a grant of Rp150 billion from NEDO (New Energy and Industrial technology Development Organization of Japan).

PT. EAN processes molasses into ethanol fuel grade with a purity of 99.5 percent. This product is expected to reduce dependence on oil fuel by utilizing environmentally friendly alternative energy.

Processing of sugarcane into sugar has by-products such as bagasse and molasses. Around 30% of sugarcane will became bagasse in the process of sugar production.

PTPN X has optimized the sue of solid waste in the form of bagasse to generate energy. Currently around 6 million tons of sugarcane are milled in 11 sugar factories of the company a year producing 1.8 million tons of bagasse.

Around 1.3 million-1.5 million tons of the bagasse are used by the company itself to generate power for its sugar factories as a substitute for oil fuel. The remaining 300,000-500,000 tons of bagasse are processed further into bio-ethanol. A unit of bio-ethanol factory of the third generation will need at least 500 tons of bagasse per day.

All sugar factories of PTPN X have fully utilized bagasse to generate energy saving its billion of rupiahs in cost for oil fuel.. Its cost for oil fuel for its factories has been reduced from Rp 130 billion in 2007 to only Rp4 billion in 2012.

Development of bio-ethanol from bagasse is cheaper than using molasses. A liter of bio-ethanol will need 5 kilograms of bagasse worth Rp1,000 or 4 kilograms of molasses worth Rp 4,000.

According to plan, the bio-ethanol production of PT. EAN will sold to PT Pertamina to be mixed with oil fuel. Pertamina is required to buy bio-ethanol from PTPN X as part of the synergy program among state companies.

Hospitals

A subsidiary of PTPN X, PT. Nusantara Medika Utama (PT. NMU), has a number of hospitals in East Java.

Its first hospital is RS Gatoel in Mojokerto, established in 1968. The hospital provide medical treatment or health care for the employees, and retired employees and their family members and the public.

The hospital services include, 24 hours emergency units (UGD) service, outpatient treatment, maternity clinic service, laboratory, radiology & CT-Scan services, etc..

Its second hospital is RS HVA Toeloengredjo Pare in Kediri established in 1908, and the third is RS Perkebunan (RSP) in Jember.

Financial Performance

PTPN X produced 494.000 tons of sugar in 2012, up 10 percent from 446,000 tons in 2011. The production in 2012 was the largest compared with the production of other producers.

PTPN X also produces molasses. In 2012, its production of molasses rose to 367,046 tons from 310,167 tons in 2011. The molasses production is sold to be processed as the basic material for the products of food sweeteners.

In 2012, PTPN X reported a strong growth in financial performance. Its income reached Rp2.145 trillion, up from Rp2.118 trillion in 2011. Sugar business unit is the largest contributor to its income, followed by tobacco unit.

Stronger sales were attributable to an increase in its profit that reached Rp 378,9 billion in 2012 from Rp155.1 billion in 2011.

Its assets grew to Rp 2.7 trillion in 2012 from Rp 2.3 trillion in 2011.

Members of:

The PTPN X Group

1. PT. Perkebunan Nusantara X (Sugar and Tobacco Processing Industry)

2. PT. Dasaplast Nusantara (Plastic bag industry)

3. PT. Mitratani Dua Tujuh (Agribusiness industry)

4. PT. Energi Agro Nusantara (Bio-ethanol industry)

5. PT. Nusantara Medika Utama (Hospital)

6. PT. BUMN Hijau Lestari (Trading)

7. PT. Riset Perkebunan Nusantara (Plantation Research)

8. PT Kharisma Pemasaran Bersama Nusantara (Trading)
Table-36

Units of sugar factory owned by PTPN X

No Name of factory Locations Manufacturing
 process

1 PG Watoetoelis Sidoarjo, East Java Sulfite treatment
2 PG Toelangan Sidoarjo, East Java Sulfite treatment
3 PG Krembong Sidoarjo, East Java Sulfite treatment
4 PG Gempolkerep Mojokerto, East Java Sulfite treatment
5 PG Jombang Baru Jombang, East Java Sulfite treatment
6 PG Tjoekir Jombang, East Java Sulfite treatment
7 PG Lestari Nganjuk, East Java Sulfite treatment
8 PG Merican Mojokerto, East Java Sulfite treatment
9 PG Pesantren Baru Kediri, East Java Sulfite treatment
10 PG Ngadirejo Kediri, East Java Sulfite treatment
11 PG Modjopanggong Tulungagung, East Java Sulfite treatment

 Total

No Name of factory Million
 capacity
 (TCD)

1 PG Watoetoelis 2,341
2 PG Toelangan 1,466
3 PG Krembong 1,593
4 PG Gempolkerep 5,955
5 PG Jombang Baru 2,850
6 PG Tjoekir 3,807
7 PG Lestari 3,888
8 PG Merican 2,750
9 PG Pesantren Baru 6,147
10 PG Ngadirejo 6,229
11 PG Modjopanggong 2,861

 Total 39,887

Source: PTPN X

Table-37

PTPN X's business performance in sugar sector
2011 and 2012

Description Units Year

 2011 2012

Plantations Hectares 70,923 72,125
Production of Tons 5,616,623 6,072,265
 sugarcane
Productivity Tons 79.2 84.2
 of sugar
 plantation
 per hectare
Sucrose content % 7.95 8.14
 of cane
Production of Tons 446,494 492,420
 crystal sugar
Production of Tons 6.30 6.84
 crystal sugar
 per hectare
Production of Tons 446,926 494,616
 sugar
Production of Tons 315,761 367,046
 molasses

Milling capacity:

--Including TCD *) 37,135 36,842
 resting time
--Not including TCD *) 39,678 39,841
 resting time

Note: *) TCD: Ton Cane per Day

Source: PTPN X

Table-38

Performance of tobacco business of PTPN X
2011-2012

Description Types of tobacco

 IDN BesNO

 2011 2012 2011 2012

Areal (hectares) 850 800 351 51
Production of 12,994 13,85 6,145 979
 green leaves 5
 (tons)
Sucrose content 9.64 9.25 9.30 9.75
 of cane (%)
Production of 1,252 1,293 571 95
 Opstapel
 (tons)

Description Types of tobacco

 Virginia Madura

 2011 2012 2011 2012

Areal (hectares) 149 151 0 150
Production of 1,092 3,424 0 770
 green leaves
 (tons)
Sucrose content 14.28 8.67 0 16.62
 of cane (%)
Production of 156 297 0 194
 Opstapel
 (tons)

Source: PTPN X

Table-39

Basic materials for sacks and production capacity

Types of basic material Production
 capacity (tons/year)

PP (Polypropylene) 3,600
HDPE (High Density Polyethylene) 2,000
LDPE (Low Density Polyethylene) 2,000

Source: PTPN X

Table-40

Hospitals owned by PTPN X

Name of hospitals Locations Services

RS Gatoel Mojokerto, East UGD 24 hours, Integrated
 Java outpatient treatment Unit,
 Maternity clinic,
 Hemodialysis Unit,
 Laboratory, Radiology &
 CT-Scan and Hospitalization.

RS HVA Kediri, East General practitioners 24
 Toeloengredjo Java hours, specialists on call
 Pare 24 hours, modern equipment,
 ambulance service 24 hours,
 UGD, and medical supporting
 service and dispensary,
 beauty clinic, policlinic
 specialist.

RS Perkebunan Jember, East UGD 24 hours, Integrated
 Java outpatient treatment Unit,
 Maternity clinic.

Source: PTPN X

Table-41

Financial highlights of PTPN X, 2011 and 2012 (Rp million)

Description 2011 2012

ASSETS
a. Current Asset 1,228,705 1,656,921
b. Investment 5,204 31,127
c. Non Current Assets 1,042,017 1,006,717
Total Assets 2,275,926 2,694,765
LIABILITIES
a. Current Liabilities 918,034 452,416
b. Non Current Liability 262,797 825,167
c. Equity 1,092,024 1,417,182
Total Liabilities + Equity 2,275,926 2,694,765
REVENUES
a. Total Revenue 2,118,369 2,145,471
b. Net Profit 155,198 378,921

Source: PTPN X

Graph-3

Sugar production of PTPN X against sugar
production of East Java, 2012

PTPN X 39,40%
PTPN XI 32,60%
PT RNI 18,78%
PG Kebun Agung 9,22%

Source: PTPNX

Note: Table made from pie chart.

Graph-4

Sugar production of PTPN X against the
country's total production, 2012

PTPN X (Persero) 19,08%
PTPN IX (Persero) 5,58%
PTPN XI (Persero) 15,78%
PT RNI (Persero) 13,32%
PT Madu Baru 1,47%
PT Kebon Agung 7,03%
PT IGN 0,21%
PT LPI 3,09%
PTPN II (Persero) 1,60%
PTPN VII (Persero) 4,10%
PTPN XIV (Persero) 1,30%
PT GMP 7,36%
PT Sugar Group 16,08%
PT PG Gorontalo 1,23%
PT PSMI 2,75%

Source: PTPN X

Note: table made from pie chart.
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Title Annotation:COMPANY PROFILE
Publication:Indonesian Commercial Newsletter
Geographic Code:9INDO
Date:Aug 1, 2013
Words:2961
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