Signing of PT Citra Borneo Utama and Grand Resources Group Pte, Ltd.

Pangkalan Bun, 12 May 2021 – PT Citra Borneo Utama (CBU) and Grand Resources Group (Singapore) Pte, Ltd. conducted cooperation agreements on the sale and purchase (Offtake Agreement) provision of derivative products from palm oil, namely Stearin and Olein. The Mou signing was held virtually on May 12, 2021, between two countries of Indonesia and Singapore.

CBU is a downstream palm oil refinery company and it is 32% owned by PT Sawit Sumbermas Sarana Tbk (SSMS). CBU products from palm oil derivatives are produced by grinding and refining, the first process is fractionation by crystallization and separation process that produces solid form (stearin), and liquid form (olein). GRGS is a subsidiary of Grand Industrial Holding Co Ltd., a large company from China engaged in various industries.  

The signing of this cooperation was carried out by Monica Putri as Marketing Deputy Director of CBU, and from GRGS by Robert Xu Qiang. The initial contract value is of USD 10 million, which was witnessed directly by SSMS CEO Vallauthan Subraminam, CEO of Citra Borneo Indah Group Rimbun Situmorang and in CBU Balakrisnan Naidu through virtual means.

In her speech Monica said the purpose of the cooperation is to ensure the plan of supplying stearin and olein to help GRGS meet its needs, GRGS also benefit in obtaining a fixed supply of stearin and olein, which products are still rare in the world market. In addition CBU benefits from the presence of permanent buyers, Monica added.

This is an important milestone for CBU in developing the business, as well as the quality of each product produced. This is an important milestone for both parties, it is expected that after the signing further mutually beneficial cooperation can be developed.

Going forward, this cooperation is expected to provide support to the business continuity of CBU, which is very promising for all shareholders and stakeholders. For the source of CPO raw material supply, CBU is still getting full distribution from SSMS, 80% of the capacity owned by CBU comes from CPO SSMS, the other 20% can be obtained from the 3rd party.

By the end of 2020, SSMS increased its shareholding in CBU by 32% from just 19%. SSMS is optimistic that the increase in share ownership is expected to increase liquidity and profit in the future.