INDOFOOD AGRI RESOURCES LTD
ANNUAL REPORT 2015
13.
and recreational amenities, education opportunities and
empowerment programmes.
We have an ongoing partnership with doctors to provide free
on-site operations to all the locals living on and around our
Kalimantan and South Sumatra estates who are suffering
from cataract. To date, 571 local residents have benefitted
from this programme.
Once again, the haze situation has continued to put the
Indonesian palm oil companies under scrutiny in 2015.
Plantation estates will always be vulnerable to fires in the dry
season. Under our dual-ringed fire monitoring mechanism,
we have an established procedure for working with the local
authorities to report and put out any fires occurring within or
near our plantation borders. To combat the haze, we actively
patrol our perimeters, conduct daily site inspections at
fire-prone areas, and disseminate information on hot spots
around our plantations based on satellite feeds published
by the Singapore Government. This has enabled our estate
teams to expediently alert and render assistance to the local
authorities in the joint effort to prevent or put out any fires.
Outlook in 2016
Palm oil is the most economical vegetable oil to produce
in the world due to its high yield. Coupled with the strong
demographic and economic fundamentals of Indonesia, and
Asia the palm oil market is expected to turnaround once the
global economy regains its traction and demand picks up.
We are expecting the current biodiesel-blending mandate
of 20% that was announced by the Indonesian government
to boost domestic demand of palm oil, but adoption will be
gradual. Erratic weather conditions have taken a toll on crop
production with intermittent droughts and floods affecting
supply, which will affect future commodity prices.
Our outlook for the agribusiness remains optimistic but we
are cautiously calibrating our activities to both global and
local developments to mitigate risks and exposures. Our
priority ahead is to stabilise operations and to ready the
organisation when the economy rebounds.
Appreciation
It is often said that challenges present the opportunity to
grow, learn and perform. With that in mind, I wish to thank all
IndoAgri employees for staying united in their dedication and
hard work this year. I also wish to thank the Board of Directors
for their exemplary leadership, and most importantly, our
customers and business partners for their unwavering
confidence and support.
Mark Julian Wakeford
Chief Executive Officer and Executive Director
time for orders. By expanding our distribution network and
improving our service level, we have gained new customers
in retail stores and hyper-marts who prefer to hold less
inventory.
We have enhanced the presence of our EOF brands with
promotional activities organised throughout the year,
enabling the Bimoli brand to gain further traction across
Indonesia.
Growing sustainable agribusinesses
The commitment to deliver safe, traceable and high-quality
food products remains at the core of our sustainability
endeavours. As at end-2015, the Group was recognised for
an additional 45,000 and 135,000 tonnes of certified CPO
production under RSPO and ISPO requirements, respectively.
This brings our total RSPO and ISPO-certified outputs to
377,000 tonnes and 180,000 tonnes, respectively.
It is our goal is to achieve 100% sustainable palm oil sourcing
by 2020. To this end, we have organised training programmes,
conducted independent audits, and issued the Palm Oil
Sourcing Policy and Responsible Supplier Guidelines to help
all our plasma smallholders and third-party CPO suppliers
attain RSPO certification by 2019. 80% of supply to our
refineries is from CPO suppliers who have been pre-audited
against the IndoAgri Palm Oil Sourcing Policy. The first batch
of 159 smallholders started their RSPO Certification audit
in 2015.
As employers and landowners, we contribute significantly
to the livelihoods of the farmers and suppliers who work
on our estates. Each year, we continue to give back to our
local communities by providing support in areas such
as infrastructure development, health services, living
In 2015, we have achieved
higher palm production output,
improved internal processes,
expanded our production
capacities and distribution
network, as well as enhanced
our customer service level.
