October 22 2013
CP Indonesia set to meet 15% growth with US$500 million loan
PT Charoen Pokphand Indonesia (CPIN), the largest poultry company in Indonesia, is on track to meet its growth target of 15% after securing a syndicated loan agreement of about US$500 million with a number of banks.
The poultry company which is a part of Thailand's agro and food conglomerate, Charoen Pokphand, said it would use the loans to refinance its debts and fund future expansion projects.
Director Ong Mei Sian said that US$200 million would be used to refinance the company's previous syndicated credit facility, issued in 2011 and due in 2014, while "the rest of the funds will be allocated to our expansion projects over the next five years".
The publicly listed company operates seven feed mills, 80 breeding farms, 43 hatcheries, four processed chicken meat facilities and over 2,500 distribution agents across the country. Ong said it would continuously increase production capacity to meet an annual growth target of 15%. He also added that progress to reach the 15% growth target, equal to US$2.17 billion in revenue, was on track for year-end.
This year, it aims to produce 900 million day-old chicks (DOCs) and 96,000 tonnes of food products from the facilities, up from 800 million DOCs and 72,000 tonnes of food products recorded in 2012. CPIN will soon start production at its new animal feed mill in the area of Cirebon, West Java.
On another front, CPIN plans to diversify its downstream food products, "such as beverages or other food items, because we already have the distribution channels," Ong said. The decision is expected to increase revenues from the food division.
Currently, the food division makes up 9% of total revenues, while 71% of revenue is derived from feed sales, 17% from the sale of DOCs and 3% from other products.
