Indonesian Palm Oil News (IPO News) – Sawit Sumbermas Sarana (SSMS) is one of the palm oil companies which had continuously improved performance in the last decade (2015-2024). Various expansion steps taken by the company including the acquisition of oil palm plantations had been successful. While many competitors faced difficulty to increase profits and many even suffered losses, theperformance of SSMS kept on increasing. SSMS is one of the palm oil companies with a rapid increase in assets. In 2015 the total assets of SSMS was only Rp 6.98 trillion soared to Rp 10.70 trillion in 2021 and in 2024 it could exceed Rp. 11 trillion. It was a very fantastic achievement.

Based on IPO NEWS’s records that one of the biggest acquisitions of SSMS was in 2015 and through its subsidiary PT Mitra Mendawai Sejati acquired 100% shares of PT Menteng Kencana Mas (MKM) worth Rp 472.5 billion. MKM has 20,800 hectares of oil palm plantations located in Sei Tewu, Kanamit, Badirih, Puntik Sanggang Village, Pangkoh Sebrang, Dandang Maliku, Pandih Batu, Pulau Pisang, Central Kalimantan. At that time, the planted area (core) was 5,857 hectares and plasma land was 1,400 hectares.

In the last four years (2018-2021), only in 2019 the performance declined and did not meet expectations. SSMS net profit decreased by 86.45% to Rp 11.68 billion compared to that in the previous year of Rp 86.20 billion In 2019 SSMS posted sales of Rp 3.27 trillion or a decrease compared to that in the previous year of Rp 3.71 trillion. This decline was due to the declining CPO prices in early 2019, although at the end of the month of 2019 it had strengthened. Total FFB production reached 1.52 million tons with a yield of 21.98 tons per hectare, declined from 1.61 million tons in the previous year with a yield of 24.4 tons per hectare. This year SMSS added
2 units of palm oil plants (PKS).

In 2020, SSMS had taken many expansion steps so that it prepared a fairly large capital expenditure of Rp 617 billion. This year SSMS built 1 more biogas power plant so that it has 2 units of biogas power plant with a total capacity of 3.4 MW. SSMS spent an investment of US$ 4 million to build these two biogas power plants. The step of building a biogas power plant is part of a downstream project which is being improved. The capital expenditure was also used by SSMS to complete the construction of a palm oil plant and the construction of a jetty which totaled Rp 128 billion. The largest capital expenditure of Rp 444 billion was used for non planting activities and Rp 45 billion for the plantation line.

Entering 2021, the performance of SSMS in all lines had increased significantly. Until September 2021 its profit increased by 287.93% to Rp 1.03 trillion compared to that at the same period of the previous year of Rp 264.97 billion. Total sales went up by 34.69% to Rp 3.68 trillion from the previous Rp 2.74 trillion. The largest sales contribution of 88% came from its subsidiary PT Citra Borneo Utama reached Rp 3.26 trillion. The high sales and profit in this period was due to the increasing CPO production to 340,559 tons, rose by 7% from that at the same period of last year at 319,533 tons. SSMS also enjoyed the high price of CPO from Rp 7.78 million per ton to Rp 9.3 million per ton. The utilization of its plants also increased by 64% compared to that at the same period of the previous year of 58%.

OPTIMIZING CPO INDUSTRIAL DOWNSTREAMING

Welcoming the challenge of the Government of Indonesia to develop the downstream palm oil industry, SSMS will optimize downstream palm oil products through its subsidiary PT Citra Borneo Utama (CBU) which produces stearin and olein, through PT. Citra Borneo Energy (CBE) which produces biodiesel and glycerin and will later produce fatty acids, fatty alcohols and other oleochemical products, through PT Citra Borneo Chemical (CBC), as well as mass products such as cooking oil, plastic materials, medicines and cosmetics.

In order for SSMS downstream products to be well received in the world market, CBU is directed at testing the certification standards for sustainability principles to meet international standards regarding sustainable business. With this certification, the entire series of business processes from suppliers and the produced products have met the international standardization process.

According to the Secretary of SSMS, Swasti Kartikaninyas, one of the CPO sales strategies in 2021 was to distribute most of the CPO to the downstream sector since it was not imposed export duties on palm oil and the sales of downstream products have a high selling value which raised its revenue. Reduction of export duties has a positive impact on increasing CPO exports which will automatically increase the country’s foreign exchange.

SSMS has several advantages which can be a positive catalyst for future performance, such as managing the palm oil business in an integrated manner, starting from oil palm plantations until
the development of its derivative products. BesidesI, all oil palm plantations are located in strategic locations and are well managed, so that they have added value if compared to that of other palm oil issuers.

Until 2021, the total installed capacity of palm oil plants, olein & stearin plant and PFAD plant has only reached 60% of the total installed capacity of 855,000 tons per year. With this large capacity, SSMS still has the opportunity to grow faster amidst the upward trend in CPO prices. The plants areis managed through PT Main Borneo Image (CBU).

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