22.
INDOFOOD AGRI RESOURCES LTD
ANNUAL REPORT 2015
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are immature. We also own and operate four crumb rubber
and three sheet rubber processing facilities.
The Plantation Division manages SumBio and PT SAIN,
IndoAgri’s advanced agricultural R&D centres at Bah Lias,
North Sumatra and Pekanbaru, Riau respectively. These
centres specialise in high-tech seed breeding programmes
and cultivation techniques, and produced a combined output
of 18.4 million premium seeds in 2015.
2015 REVIEW
CPO prices (Rotterdam CIF) remained soft at an average of
US$615 per tonne in 2015, compared to US$816 per tonne in
2014. Key contributing factors included the slowdown of global
demand in major markets such as China and Europe, coupled
with weak crude oil prices which has virtually eliminated
discretionary biodiesel demand, and higher soybean supplies
from the US and South America.
Rubber prices (RSS3 SICOM) have been on a downward trend
since 2012, declining more than 50% to end at an average of
US$1,560 per tonne in 2015. This was due to higher rubber
production in Thailand and Indonesia, as well as weaker
demand from major rubber consuming markets, particularly
China, the US and Europe, and more recently lower crude
oil prices. In the medium term, prices will remain under
pressure until global demand recovers.
In 2015, the Plantation Division replanted 922 hectares of oil
palms, and achieved 1,641 hectares of nucleus new plantings
across its estates in South Sumatra and Kalimantan,
compared to 6,350 hectares in 2014. The reduction in new
plantings was also the result of dry weather in the second
half of the year. As at year-end, the Group’s oil palm estates
covered 246,359 hectares, of which immature estates
occupied 58,959 hectares or 24% of the total planted palm
area. The average age of our oil palms is about 14 years.
As at 31 December 2015, the Division owned and operated
24 palm oil mills with a combined FFB processing capacity
of 6.4 million tonnes per annum. This includes two facilities
in Kalimantan that were completed during the year – one 45
tonnes per hour new mill, and another that was expanded
from 60 to 80 tonnes per hour.
The Division’s rubber estates are located in North and South
Sumatra, East Kalimantan and Sulawesi. Our rubber trees
average about 15 years, and our nucleus rubber estates
occupied 21,338 hectares as at end 2015, including 18% that
Cross sections of oil palm fruits
PLANTATION REVIEW
PALM & RUBBER
