Page 24 - ar2013

The Plantation Division manages and cultivates IndoAgri's oil palm,
sugar cane, rubber and other estates, and derives its revenue
primarily from the sale of crude palm oil (CPO), palm kernel (PK)
and related by-products. As at 31 December 2013, the Group
has a total planted acreage of 276,709 hectares in Indonesia,
comprising 239,921 hectares of oil palm, which occupied 87%
of total planted area, followed by 21,759 hectares of rubber, and
11,645 hectares of sugar cane. We also manage approximately
86,215 hectares of oil palm estate and 3,999 hectares of rubber
estate under the government's plasma programme.
The Division’s 21 palm oil mills across Sumatra and Kalimantan
have a combined FFB processing capacity of 5.2 million tonnes
per annum. We also operate four crumb rubber processing
facilities, three sheet rubber processing facilities, two sugar mills
and refineries, a cocoa factory and a tea factory.
Supporting efforts to enhance estate quality and output, the
Division operates two advanced research and development
centres, SumBio and PT SAIN, based in Bah Lias, North Sumatra
and Pekanbaru, Riau respectively. In 2013, these centres
produced a combined output of 26.5 million premium seeds,
aided by their sophisticated in-house seed breeding programmes
and cultivation techniques.
In achieving sustainable low-cost production, the Plantation
Division maximises yields and reduces operational costs through
the following agronomy and crop protection best practices:
• Performing block-by-block analyses to provide specific
recommendations on crop management and planting densities,
fertiliser and herbicide usage, as well as predictions on yields and
oil extraction rates.
• Optimising crop management and harvesting practices to
maximise production and collection of FFB.
• Leveraging biological methods to improve pest and palm tree
disease control.
• Improving mechanisation to increase efficiency and reduce costs.
• Utilising organic fertilisers and all by-products while reducing
reliance on inorganic fertilisers.
2013 REVIEW
The global economic slowdown affecting major markets like China
and Europe, coupled with slower biodiesel demand in Europe
have put sustained pressure on commodity prices. CPO prices
(CIF Rotterdam) averaged US$857 per tonne in 2013, significantly
lower than 2012’s US$1,006.
Plantation Division’s total revenue grew 1% to Rp8.5 trillion in
2013 over the previous year. Likewise, EBITDA margin came in
lower, in line with lower average selling prices of CPO and PK of
2% and 4% respectively, as well as higher production costs.
PLANTATION REVIEW
PALM & RUBBER
20 INDOFOOD AGRI RESOURCES LTD • ANNUAL REPORT 2013