Sierad to Build Chicken Houses in Q2/2009
(Jakarta, Investor Daily,) PT Sierad Produce Tbk (SIPD) will start building breeding farms in West Java. The project is part of the Company’s investment plans worth Rp 310 billion.
“We will start from West Java while waiting for further funding from banks,” said Sierad Corporate Secretary Elies Lestari Setiawan to Investor Daily in Jakarta on Wednesday (11/3).
Elies said that the Company would start by building breeding farms which have a combined capacity of producing 115,000 Day Old Chicks (DOC) per week in the location. The project is expected to start on April 2009 and to be completed in six months.
“The next process would be to place the hens into the houses and to wait for 26 weeks until they are ready for production. The project is expected to cost less than Rp50 billion,” said Elies.
Elies explained that in addition to West Java, Sierad Produce is planning to build breeding farms with a production capacity of 400,000 per week in Magelang, Central Java with a planned investment worth some Rp 210 billion.
Sierad Produce will acquire 30 ha of land in the location upon which breeding farms will be built. The location will also be home to eggs hatching plant. “The acquisition of the land will not be as costly as building the infrastructures,” said Elies.
Elies added that the Magelang project will start once the Company secures loans commitment form banks. “We will not start the project if the source of financing remains uncertain. We have been negotiating the project with several banks to get the cash,” said Elies.
The Company, according to Elies, is seeking loans with attractive interest rate and with maturity up to ten years. The loans will be paid off using the proceeds of the investment.
Elies said that apart from the Rp 300 billion cash for expansion, Sierad Produce is also putting aside some Rp 20 billion to Rp 30 billion from its internal cash to cover it’s capex for operational necessity. As of September 2008 Sierad’s internal cash stands at Rp19.69 billion.