Page 24 - ar2012

Plantation Review
Palm& Rubber (Cont’d)
Palm
In 2012, the Division achieved nucleus oil plam new planting of
13,383 hectares in its South Sumatra and Kalimantan estates,
compared to 13,884 hectares in 2011. As at year-end, mature estates
occupied 176,105 hectares, compared to 158,163 hectares in 2011,
while immature estates occupied 54,814 hectares or 24% of total
planted palm area. The average age of our oil palm trees is about
12 years. We expect our immature palms to boost CPO production
and contribute to continuous volume growth as they approach
their productive and peak production stages in the next few years.
With higher nucleus production and plasma purchases, we achieved
4,107,000 tonnes of FFB production in 2012, an 8% increase over
last year’s 3,797,000 tonnes. In line with higher FFB outputs, CPO
production grew by 5% from 838,000 tonnes to 880,000 tonnes
in 2012. Oil extraction rates declined slightly to 21.7% versus
22.1% in 2011. Internal CPO sales to the Edible Oils & Fats Division
reduced by 15% to 548,000 tonnes from 646,000 tonnes in 2011
as the purchase of external CPO from Kalimantan estates lowered
transportation costs.
A positive development for this Division in 2012 was the attainment
of RSPO certifcation for 53,000 tonnes of CPO at two estates and
one oil palm mill in Riau. This brings the Group’s total certifed CPO
production to approximately 248,000 tonnes (roughly 28% of 2012’s
total CPO output and total planted palm area), demonstrating our
continued commitment to sustainable agriculture.
Rubber
The Division’s rubber estates are spread across North and South
Sumatra, East Kalimantan and Sulawesi. Our nucleus rubber estates
occupy 21,802 hectares, of which 20% are immature. The average
age of our rubber trees is about 14 years old. About 865 hectares
of our old rubber estates were replanted in 2012.
During the year, global demand growth for rubber was weakened
due to the adverse global economy, aggravated by lower replacement
tyre sales. After falling by over 15% since the beginning of 2012,
rubber prices (RSS3 SICOM) stabilised in the second half of the
year. On a full year basis, 2012 prices remained signifcantly lower
at US$3,384 per tonne compared to US$4,824 per tonne in 2011.
This directly affected our 2012 rubber sales and earnings, particularly
for our main subsidiary, Lonsum, which owns the majority of our
rubber estates.
The Division’s rubber production declined 8% to 18,000 tonnes
this year due to the combined effects of early wintering and lower
purchases from third parties. Crumb rubber, rubber sheet and cup
lump were among its key products.
In 2012, exports to Singapore and the United States accounted
for 80% of the Group’s rubber sales, while the balance was sold
domestically in Indonesia.
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