30.
INDOFOOD AGRI RESOURCES LTD
ANNUAL REPORT 2015
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The availability of land for expansion, backed by conducive
climates, sophisticated agronomic practices and high
productivity, makes Brazil a strong contributor to the global
sugar and ethanol industry. Brazil’s ability to maintain a
steady increase in production and export levels over the
last 15 years can be attributed to its advantage as the most
cost competitive sugar producer in the world. Presently,
Brazil has remained the world’s largest sugar producer and
exporter with close to 21% of worldwide production and 40%
of the global sugar export market.
In the Philippines, IndoAgri has a 30% investment in FPNRL,
which in turn, has a 50.9% interest in RHI, the nation’s
largest integrated sugar business. RHI has three sugar
mills, one in Batangas and two in Negros Occidental with a
combined processing capacity of 38,500 TCD or 6.2 million
tonnes per year. This makes RHI the biggest sugar miller
in the Philippines, supplying nearly 18% of the country’s
total sugar production. It is also the third largest Filipino
sugar refiner, with a capacity of 18,000 Lkg/day at its
Batangas refinery (one Lkg is equivalent to a 50kg bag
of sugar).
During the year in review, RHI acquired a second ethanol
plant with an annual production capacity of 40,500 M
3
in
the Negros Occidental region. Together with its existing
ethanol plant, RHI now offers a combined capacity of 84,000
M
3
per annum, making it the largest ethanol producer in
the Philippines.
The Philippines is Southeast Asia’s third largest sugar
producer with 2.3 million tonnes in 2015, after Thailand’s
11.8 million tonnes and Indonesia’s 2.8 million tonnes.
Typically, 90-100% of this production is consumed
domestically, while the balance is exported primarily to
the US, which imposes a quota on sugar imports from the
Philippines and Japan
2015 REVIEW
In 2015, the global economic slowdown and sizeable global
sugar production surplus continued to put international
sugar prices under pressure. Sugar prices (CSCE No. 11)
averaged 13.1 cents USD per pound in 2015, down from
16.3 cents USD per pound in 2014, exacerbated by the
weakening Brazilian Real.
As at 31 December 2015, CMAA has a cane planted area of
52,843 hectares, of which 48% is company owned and 52%
belongs to third parties. It processed 3.7 million tonnes
of harvested sugar cane with an utilisation rate of around
98%, and produced 237,000 tonnes of raw sugar, 149,000
M
3
of ethanol and 368,000 Mwh of electricity.
Despite these achievements, CMAA incurred losses in 2015
due to depressed sugar prices, as well as lower electricity
prices. The Group’s 50% share of losses from CMAA for
2015 amounted to Rp172 billion, compared to a profit of
Rp29 billion in 2014.
In 2015, CMAA was awarded Bonsucro Certification for
an additional 262,000 tonnes of sustainable sugar cane
production, bringing its total certified cane production to
373,000 tonnes or 10% of total cane production. Bonsucro
is a globally recognised standard, and a multi-stakeholder
non-profit organisation that promotes measureable
standards in sustainable sugar cane production.
In the Philippines, RHI processed 2.7 million tonnes of
sugar cane from third party suppliers, producing 258,000
tonnes of raw sugar and 50,000 M
3
of ethanol. It also
produced 141,000 tonnes of refined sugar in 2015.
PLANTATION REVIEW
SUGAR: OUTSIDE INDONESIA
