JAKARTA – PT Nusa Palapa Gemilang Tbk (NPGF) downsizes the production of NPK fertiliser to 3,000 tons per month from the maximum installed capacity of 15,000 tons per month.
Yudi Kuswinarko, Corporate Secretary of Nusa Palapa Gemilang, said that the significant contraction in its working capital and a massive increase of the raw material cost force the company to limit their expense on production, making them able to cover the production cost of only 2,000-3,000 tons of fertiliser monthly.
“The increased selling price of the fertiliser, which hits almost 200%, has yet to lead to increased realised income as the price surge of fresh fruit bunch is not as immense as the global crude palm oil (CPO) price surge,” Kuwsinarko mentioned in the information disclosure quoted Monday (4/7).
According to Kuswinarko, the cost of the raw materials for urea, phosphate, and KCl fertilisers has proliferated 300% since late 2020. This unfortunately took up the company’s working capital excessively as the purchase required cash, and the bills would arrive as soon as 120 days after the goods were received by the distributors.
The company may actually boost the factory utilisation, preparing for over 3,000 tons of production per month, under the condition that the buyer provides its own raw materials. The other option is that the buyer sells the raw materials to NPGF for a price netted off with the sales of finished products ordered by the buyer. (LK/ZH)