The Plantation Division’s sugar and ethanol operations in Brazil are held andmanaged through IndoAgri’s 36.21% stake inCMAA andBússola. CMAAoperates three sugar and ethanol mills in Brazil with a combined annual sugar cane crushing capacity of 9.7 million tonnes. 2023 REVIEW Despite an increased crop yield in Brazil, sugar prices reached their highest levels in 2023 as a result of the supply deficit due to lower crop yields in India and Thailand. In 2023, CMAA crushed 9.45 million tonnes of sugar cane compared to 8.2 million tonnes in the previous season, producing 703,000 tonnes of raw sugar, 352,000 m3 of ethanol and 426,000 MWh of electricity. The Company’s share of profits from the joint ventures increased to Rp133 billion from Rp52 billion in 2022. This was mainly due to higher raw sugar sales volume and prices, partly offset by reduced ethanol sales and higher income tax expenses. In terms of sustainable production, CMAA achieved Bonsucro certification for 3.5 million tonnes of sugar cane in 2023, accounting for 73% of the total cane produced by CMAA. 2024 OUTLOOK Global sugar prices are expected to be influenced by the crop prospects and sugar production in Brazil, which will depend on ethanol parity, crude oil prices, Brazil’s biofuel policy ( RenovaBio) and fluctuations of the Brazilian Real. Prices could also be affected by India’s sugar subsidies, export volumes and biofuel policy. Faced with a challenging economic landscape due to the tightening market liquidity and high interest rates in Brazil, CMAA’s priority will be to optimise the sugar-ethanol production mix to maximise profitability. Additionally, it plans to increase its sugar crystallization production capacity by 62,000 tonnes per year, and expand its crushing capacity by one million tonnes to reach a total of 10.7 million tonnes in the 2024/25 crop year. CMAA’s UVT sugar mill and ethanol plant in Brazil PLANTATION REVIEW Operation in Brazil 19 Annual Report 2023 GROUP OVERVIEW OPERATION AND FINANCIAL REVIEW SUSTAINABILITY & GOVERNANCE FINANCIALS OTHER INFORMATION
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