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The pervasiveness of relatively inexpensive technology in the form
of GPS systems and hand-held tracking devices will enable us to
continue enhancing our block-by-block approach to monitoring and
managing the health of our diverse plantations.
For IndoAgri, precision agronomy is in the imminent future, and
we are looking at ways to narrow average yield variance for each
30-hectares block by engineering more specific strategies on
fertiliser recommendations, pest control and disease management.
Precision agronomy will enable us to secure the most proftable
yield and keep a balanced nutrient input and output programme
for sustainable growth.
Thriving on Rain-Fed Agriculture
Water is a critical resource for agriculture industries. Although 70% of
the earth’s surface is covered with water, drinking water constitutes
less than 1% while agriculture and irrigation account for nearly
70% of the world’s water demand. Compounding the scarcity of
water resources are erratic weather conditions such as drought and
excessive rainfalls, which can signifcantly reduce agricultural yields
and impact annual supplies of agricultural products, in some cases
materially so. Ample water supply, therefore, is a key consideration
as we expand our agricultural footprint.
Across Indonesia, our plantations and estates thrive on rain-fed
agriculture, thanks to their strategic locations around the equator, this
will enable us to produce consistent yields for our agricultural crops.
Leveraging IT to Maximise Business Potential
Besides technology and improved mechanisation, we believe that IT
platforms will empower us with tools for further advancement. I am
pleased to report that the Group’s migration onto the SAP platform
will be completely rolled-out to all our plantations in 2013. With
the implementation of an integrated software solution across our
subsidiaries, refneries and diverse estates, we will be able to tap
into real-time operational and agronomy data for better plantation
management and results.
As the Group expands, our continued investments in integrated
ERP platforms, as well as Management Operating Systems that can
be accessed via the Internet, will equip us with professional tools
for managing the business and the diverse facets of our supply
chain operations.
Focussing on Sustainable Farming Practices
Our initiatives on precision agronomy and IT work in tandem with
our commitment to sustainable agriculture, addressing the yield-
improvement objective without relying on new land banks.
In 2012, PT SIMP was awarded RSPO certifcation for two estates
and one palm oil mill in Riau. The endorsement adds 53,000 tonnes
to IndoAgri’s sustainable CPO production, bringing our total certifed
output to 248,000 tonnes or roughly 28% of the Group’s total 2012
production and total planted palm area. We encourage all of our
estates and palm oil mills to be RSPO certifed, as this is the highest
recognition for environmental compliance in the palm oil industry.
Investing in Skills Training
A qualifed and productive workforce at IndoAgri is premised on
strong engineering and agricultural skills. Building on our human
capital development initiatives, we are adding two new training
schools to complement our existing training facilities in Sumatra.
In 2013, we are also rolling out a new management development
training programme, which aims to equip high-performing executives
with management and leadership skills to perform more effectively in
their roles. As part of succession planning, we are putting in place
an initiative to identify specifc individuals with the capability to take
on greater responsibilities within the organisation.
In line with good corporate governance, we strengthened our Internal
Audit, Enterprise Risk Management and Inspection frameworks so
that these remain relevant in monitoring, reviewing and improving
our control systems and outcomes.
Looking Ahead
Among other achievements, 2012 marks the frst full season for
our sugar factory in Komering (South Sumatra). With CMAA in our
fold, we look forward to a stronger basis for sugar yield increases
and expansion.
We continue to face cost pressures driven principally by rising
wages and cost of inputs, of which fertiliser is the most signifcant.
We are very conscientious of the resulting impact to our bottom line.
Moving forward, an improved mechanisation strategy is one way to
deal with infationary pressures, combined with high standards of
agricultural productivity and yields.
Appreciation
I take this opportunity to thank the Board of Directors for their
leadership and guidance, and to pay a special tribute to our 37,201
employees who have rallied behind our strategies, turning them into
tangible results. I am also grateful to our loyal suppliers, customers
and business partners for their unfailing support.
Mr Mark Wakeford
Chief Executive Offcer
Indofood Agri Resources Ltd. • Annual Report 2012 13