PLANTATION REVIEW Operation in Indonesia The Plantation Division manages the cultivation, production and sale of CPO, PK and related products, crumb and sheet rubber, sugar, tea, cocoa and other products, mainly for domestic consumption. The nucleus oil palm estates span 241,208 hectares across Indonesia, of which 9% are immature. FFBs are harvested and processed by 27 mills across our estates, with a total annual capacity of 7.2 million tonnes. The nucleus rubber estates occupy 16,231 hectares in North and South Sumatra and Sulawesi, of which 10% are immature. Rubber is processed at three crumb rubber and two sheet rubber facilities. The oil palm and rubber plasma partnerships account for 91,523 hectares. The sugar estates in Indonesia span 13,583 hectares. Harvested cane is processed at a 8,000 tonnes of cane per day (TCD) sugar mill and refinery in South Sumatra, and a 4,000 TCD sugar mill and refinery in Central Java. The Division also operates 17,627 hectares of other crops, with one factory each for the production of tea and cocoa. 2024 REVIEW The Plantation Division recorded a 1% decline in FFB nucleus production to 2,758,000 tonnes, while CPO production remained flat at 706,000 tonnes. Our FFB nucleus production was impacted by wet weather and lower yields from aging trees. Despite these challenges, the Division’s revenue rose by 10%, mainly due to higher selling prices of palm products (CPO up 16% and PK up 50%), partly offset by lower CPO sales volume due to timing in the realisation of year-end stocks. The Division reported significantly higher operating profit of Rp2,772 billion in 2024, compared to Rp1,372 billion in 2023. The increase was mainly attributable to strong palm product prices and lower nucleus palm production costs, arising from lower fertiliser expenses, tighter cost controls and gains from changes in the fair value of biological assets. This was partly offset by higher other operating expenses arising from impairment loss and write-off of property, plant and equipment. Productivity and cost efficiency initiatives remained a key priority, with efforts focused on critical infrastructure, enhanced fertiliser application through nutrient analysis, preventive maintenance strategies, mechanisation programmes and usage of renewable energy sources. Following the adoption of the TCFD framework, we continued refining our ERM approaches and risk assessment matrix, with targeted investments in critical areas like road infrastructure and water drainage to address flooding. In addition to mitigating climate risks, we are enhancing energy conservation by installing more meters to track and manage power usage in the factories. For water management, milling operations rely on a mix of rivers, groundwater and rain-harvesting systems, while plantation offices and accommodations draw from groundwater and rain-harvesting. These efforts underscore our commitment to sustainable resource management. We remain fully committed to our sustainability and ESG goals, diligently tracking the material issues and ensuring the proper execution of sustainability programmes. During the year, the Group’s ISPO-certified production stood at 481,000 tonnes, or 84% of total nucleus CPO production. In 2024, our rubber production was relatively flat compared to the previous year, at around 4,800 tonnes. Our sugar cane plantation in South Sumatra produced 47,000 tonnes of sugar in 2024, a year-on-year decrease of 7%. In Central Java, our factory produced 22,900 tonnes of sugar, with 7,100 tonnes belonging to the Division and the balance belonging to the farmers who supplied the cane. FFB Production (Nucleus) (’000 tonnes) 2,758 2,784 2,812 2024 2023 2022 CPO Production (’000 tonnes) 706 708 736 2024 2023 2022 Group Overview Financials Other information Sustainability and Governance Operation and Financial Review 16 Indofood Agri Resources Ltd.
RkJQdWJsaXNoZXIy NTkwNzg=