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PT Astra Agro Lestari Tbk (AALI) will boost its production next year. AALI is targeting production growth, both fresh fruit bunches (FFB) and crude palm oil (CPO), of 5% in 2024.
AALI Communications and Investor Relations Manager Fenny Sofyan said that palm oil crops are highly influenced by weather conditions. Meanwhile, the El Nino in 2023, according to agronomists, will affect plant fertility, resulting in lower fruit production.
“For this reason, as an effort to overcome it, the Company is persistent and consistent in implementing operational excellence by optimizing performance and harvest completeness,” Fenny said.
Fenny also hopes that the impact of El Nino on AALI’s production will not be too severe, so that the production target can increase by around 5% every year can be achieved.
“However, as to what exactly, our agronomy and research and development (R&D) teams will have to conduct further analysis on our crops in various regions,” she said.
As a highly volatile industry, Fenny said, supply and demand as well as the policies of importing countries and domestic countries are things that greatly affect the company’s performance. Fenny said that the amount of AALI’s capital expenditure (capex) for 2024 is still under internal calculation.
“The amount of AALI’s capex for 2024 will be published during the public expose in April 2024,” she said.
However, the main allocation of AALI’s capex in 2024 will be used for plant maintenance and replanting programs. The replanting program aims to rejuvenate crops and increase crop productivity in the future.
“We are also still implementing opportunistic strategies in terms of sales and marketing of our products,” she said. Fenny said the current CPO Exchange is participatory, so AALI conducts some transactions through the CPO Exchange.
“We support government programs, especially for the good of the Indonesian palm oil industry,” she said.