Seeing The Profit Margins Of Palm Oil Companies Owned By Conglomerates Anthony Salim To Eka Tjipta Widjaja Due To Soaring Cooking Oil Prices

JAKARTA - Oil palm plantation companies belonging to conglomerate Anthony Salim, Sinarmas group belonging to family tycoon Eka Tjipta Widjaja, to veteran portfolio investor Lo Kheng Hong have a line of cooking oil products. In the midst of skyrocketing cooking oil prices, what is their current profit margin?

PT Salim Ivomas Pratama Tbk (SIMP), PT Sinar Mas Agro Resources and Technology Tbk (SMAR), and PT Tunas Baru Lampung Tbk (TBLA) are the three issuers in question. Let's dissect one by one.

Salim Ivomas still relies on cooking oil and vegetable fat products as the biggest contributor to sales until the third quarter of 2021. Of the total sales of Rp. 14.13 trillion, the producer of Bimoli cooking oil recorded revenues of Rp. 11.66 trillion from this sector.

Meanwhile, until the end of September 2021, SMAR will rely on the sale of all CPO derivative products, including biodiesel and oleochemicals. These products contribute 88 percent of the company's total sales.

Based on financial reports as of September 30, 2021, SMAR, which produces cooking oil under the Filma brand, posted sales of Rp. 40.38 trillion. Of this amount, the turnover of palm oil products is Rp. 37.63 trillion.

On the other hand, the increase in CPO and cooking oil prices has also made the government move to suppress prices. The Ministry of Industry opens up opportunities for palm cooking oil industry players to contribute to the program to stabilize prices for these commodities in the market.

So far, as many as 70 palm cooking oil (MGS) producers are involved in circulating 1.2 billion liters of cooking oil for their needs over the next 6 months.

Regarding this policy, Pinta said, SMAR continues to improve its ability to produce various palm-based derivative products with a broad portfolio to meet the growing needs of customers. This is in line with the Government of Indonesia's policy of encouraging downstreaming.

He said that until the end of 2021, SMAR had distributed 600,000 liters of affordable cooking oil. The distribution policy will be continued by the company starting January 2022.

"The company will again support the government's policy of price stabilization through the distribution of cooking oil at an affordable price," he said.

SMAR management assesses that the prospect of selling cooking oil this year is still good considering that this product is one of the staple food needs for the community. Cooking oil prices will always fluctuate influenced by movements in the international CPO market price, although the increase tends to be lower than the increase in CPO market prices.

Turning to TBLA, this issuer of Lo Kheng Hong's portfolio relies on processed palm products as the largest contributor to revenue. Until the third quarter of 2021, the Rose Brand cooking oil producer posted sales of Rp. 2.61 trillion from the manufacturing product segment and its derivatives from processing palm plantation products for related parties. TBLA also recorded sales of Rp. 5.59 trillion in the same segment to third parties.

This amount covers 73.94 percent of the company's total sales of Rp. 11.09 trillion.