ANNUAL REPORT 2024
CONTENTS Group Overview 02 Our Milestones 04 Geographical Presence 06 Corporate Structure 07 Chairman’s Message 08 CEO’s Message Operation and Financial Review 12 Group Performance Review 16 Plantation Review 20 Edible Oils & Fats Review Sustainability and Governance 24 Sustainability at IndoAgri 28 Board of Directors 32 Corporate Information 33 Corporate Governance Financials 55 Directors’ Statement 58 Independent Auditor’s Report 64 Consolidated Statement of Comprehensive Income 65 Balance Sheets 67 Consolidated Statement of Changes in Equity 69 Consolidated Cash Flow Statement 71 Notes to the Financial Statements Other Information 167 Interested Person Transactions 168 Estate Locations 170 Statistics of Shareholdings 172 Notice of Annual General Meeting Proxy Form
Indofood Agri Resources Ltd. (IndoAgri) is a vertically integrated agribusiness group with activities spanning the entire supply chain from research and development (R&D), seed breeding, oil palm cultivation and milling, as well as the production and marketing of cooking oil, shortening and margarine. Headquartered in Singapore, we are among the largest palm oil producers in Indonesia. Our branded cooking oil, shortening and margarine products together garner a leading share in the domestic market. As a diversified agribusiness group, IndoAgri also engages in the cultivation of sugar cane, rubber and other crops. AT A GLANCE Our Mission To be a low-cost producer, through high yields and cost-effective and efficient operations. To continuously improve our people, processes and technology. To exceed our customers’ expectations, whilst ensuring the highest standards of quality. To recognise our role as responsible and engaged corporate citizens in all our business operations, including sustainable environmental and social practices. To continuously increase stakeholders’ value. Our Vision To become a leading integrated agribusiness, and one of the world-class agricultural research and seed breeding companies. Our Values With discipline as the basis of our way of life; we conduct our business with integrity; we treat our stakeholders with respect; and together we unite to strive for excellence and continuous innovation. Group Overview Financials Other information Sustainability and Governance Operation and Financial Review Annual Report 2024 01
OUR MILESTONES 07 • Reverse takeover and listing on SGX • Acquisition of plantation land in South Sumatra and Kalimantan • Acquisition of 58.8% stake in PT PP London Sumatra Indonesia Tbk (Lonsum) 08 • Diversification into sugar business with 60% stake in PT Laju Perdana Indah • Acquisition of plantation land in South Sumatra and Central Kalimantan 13 • Acquisition of 79.7% interest in PT Mentari Pertiwi Makmur, an industrial timber plantation company • Acquisition of 50.0% stake in Companhia Mineira de Açúcar e Álcool Participações (CMAA), a sugar and ethanol company in Brazil • Formation of FP Natural Resources Limited, a 30:70 JV to invest 34% in Roxas Holdings Inc. (Roxas), an integrated sugar business in the Philippines • 7% of nucleus Crude Palm Oil (CPO) production was Indonesian Sustainable Palm Oil (ISPO)-certified 09 • Acquisition of plantation land in South Sumatra 10 • Divestment of 8% stake in Lonsum, of which 3.1% was sold to PT Salim Ivomas Pratama Tbk (PT SIMP) 11 • Listing of PT SIMP on IDX 12 • Acquisition of 26.4% stake in Heliae, a development-stage algae technology solutions company Group Overview Financials Other information Sustainability and Governance Operation and Financial Review 02 Indofood Agri Resources Ltd.
14 • Formation of PT Prima Sarana Mustika, a 40:60 JV for road construction and leasing of heavy equipment • Expansion of sugar business via the acquisition of PT Madusari Lampung Indah 15 • 24% of nucleus CPO production was ISPO-certified 16 • Acquisition of PT Pasir Luhur, a tea plantation company • 39% of nucleus CPO production was ISPO-certified 17 • Formation of PT Indoagri Daitocacao, a 49:51 JV to manufacture and market chocolate products • 57% of nucleus CPO production was ISPO-certified 18 • Formation of Canápolis Holding S.A. (Canápolis), a 50:50 JV to acquire a second sugar and ethanol mill in Brazil • Acquisition of Vale do Pontal Açucar e Alcool Ltda (UVP), a sugar and ethanol mill operator in Brazil, turning CMAA into a 35:35:30 JV • 62% of nucleus CPO production was ISPO-certified 19 • Commencement of operations at the newly completed chocolate factory • 71% of nucleus CPO production was ISPO-certified 20 • Restructuring of sugar operations in Brazil, with IndoAgri owning 36.21% of CMAA and Bússola • 78% of nucleus CPO production was ISPO-certified 21 • 86% of nucleus CPO production was ISPO-certified Group Overview Financials Other information Sustainability and Governance Operation and Financial Review 03 Annual Report 2024
2.2m Capacity Tonnes of Cane Crushing Per Year 2 Mills & Refineries 27 Mills 7.2m Tonnes of FFB Per Year Capacity 5 Refineries 1.7m Capacity Tonnes of CPO Per Year Palm Oil Mills CPO Refineries Sugar Mills & Refineries INDONESIA IndoAgri owns strategically located estates and production facilities across Indonesia. The Group’s planted area occupies 288,649 hectares. Oil palm is the dominant crop, followed by sugar cane, rubber and other crops. Our plantations are largely located in Sumatra and Kalimantan, while our refineries are mainly sited at major cities including Jakarta, Medan, Surabaya and Bitung. Oil Palm 241,208 Sugar Cane 13,583 Rubber 16,231 Other crops 17,627 Planted Area (Ha) MALAYSIA INDONESIA SINGAPORE RIAU SOUTH SULAWESI JAKARTA CENTRAL JAVA SOUTH SUMATRA WEST JAVA NORTH SULAWESI WEST KALIMANTAN CENTRAL KALIMANTAN EAST KALIMANTAN NORTH SUMATRA GEOGRAPHICAL PRESENCE SOUTH EAST ASIA EAST JAVA Group Overview Financials Other information Sustainability and Governance Operation and Financial Review 04 Indofood Agri Resources Ltd.
3 Mills 9.7m Capacity Tonnes of Cane Crushing Per Year Sugar and Ethanol Mills BRAZIL MINAS GERAIS IndoAgri has 36.21% in CMAA, which operates three sugar and ethanol mills. SOUTH AMERICA BRAZIL LEGEND R&D Centre Oil Palm Estate Sugar Cane Estate Rubber Cocoa CPO Refinery Palm Oil Mill Sugar Mill & Refinery Tea Timber Sugar and Ethanol Mill Group Overview Financials Other information Sustainability and Governance Operation and Financial Review 05 Annual Report 2024
CORPORATE STRUCTURE (As at 31 December 2024) NOTES: • IndoAgri is 73.7% effectively owned by PT Indofood Sukses Makmur Tbk (PT ISM) • Shareholding percentage is calculated based on total number of issued shares (excluding treasury shares of the Company) 36.2% 73.5% 59.5% Bússola Group Overview Financials Other information Sustainability and Governance Operation and Financial Review 06 Indofood Agri Resources Ltd.
CHAIRMAN’S MESSAGE DEAR SHAREHOLDERS, It is a privilege to address you for the first time as Chairman of IndoAgri. I am honoured to lead an organisation with a strong legacy of resilience and commitment to sustainability. I look forward to building on this foundation and advancing the company’s achievements. Indonesia maintained steady economic growth in 2024, expanding by 5.03% despite global uncertainties. Household consumption, investment and government spending remained the key drivers, supported by stable macroeconomic fundamentals. Inflation eased to 1.57% by year-end, but rising costs continued to impact purchasing power, particularly for lower-income groups. The Rupiah averaged Rp15,900 against the US Dollar, a 4% depreciation from 2023. For IndoAgri, 2024 was a good year. With palm oil prices rebounding, we focused on cost optimisation and operational efficiencies, leveraging our vertically integrated business model to maximise value across the supply chain. I am pleased to report the company’s strong performance, with the year-on-year net profit after tax rising by 125% to Rp2,110 billion (approximately S$178 million) in 2024. Sustainability remains at the core of our strategy. We continued to advance our climate resilience efforts by further aligning with the Task Force for Climate-related Financial Disclosures (TCFD) framework, enhancing our ability to manage both physical and transitional risks. The continued redirection of Indonesia’s palm oil into domestic biodiesel production further reinforced the industry’s role in supporting national energy security. As environmental regulations evolve, IndoAgri remains committed to best practices in plantation management, supply chain traceability and community engagement. The incoming government’s renewed focus on education and nutrition, particularly through initiatives like the Free Lunch Programme for schoolchildren, resonates deeply with our values. We believe that empowering communities through education and improving access to nutritious food are essential to uplifting Indonesia’s socio-economic status. As a company, we are proud to play a role in supporting these efforts, whether through our contributions to food security or our community development programmes. Looking ahead, 2025 presents both opportunities and challenges. Domestically, Indonesia’s economy remains resilient, supported by strong fundamentals and government programmes. Nonetheless, geopolitical tensions, the tightening of monetary policy, trade protectionism and tariffs may impact market conditions. IndoAgri is well-positioned to navigate these dynamics. With a disciplined approach to growth, unwavering commitment to sustainability and continued focus on innovation and operational efficiency, we remain confident in our ability to deliver long-term value to all stakeholders. I would like to take this opportunity to thank all shareholders, my fellow Board members, our dedicated employees and valued partners for the continued trust and support. I look forward to working with all of you as we embark on the next phase of IndoAgri’s journey. Philip Yeo Liat Kok Chairman and Lead Independent Director Group Overview Financials Other information Sustainability and Governance Operation and Financial Review 07 Annual Report 2024
CEO’S MESSAGE DEAR SHAREHOLDERS, 2024 was a strong year for IndoAgri. Palm oil prices rebounded significantly after a stable 2023, trading at their largest premium over soybean oil in 40 years. Traditionally the most affordable vegetable oil due to high yields per hectare and low production costs, palm oil defied expectations by sustaining its price advantage over soybean oil throughout the year. This development reflects a structural change in the edible oils market, driven primarily by the progressive redirection of Indonesia’s palm oil exports into domestic biodiesel production. In 2024, approximately 11.7 million tonnes of palm oil were channelled into the country’s B35 biodiesel mandate, with plans to increase this to 13.6 million tonnes under B40 by 2025 and B50 by 2026. This shift, coupled with lower yields from adverse weather and tightened supply, pushed domestic CPO prices (KPB) upwards by 17% to an average of Rp13,190 per kg, with international CPO prices (CIF Rotterdam) increasing 15% to an average of USD1,113 per tonne in 2024. Meanwhile, global sugar prices fluctuated between 18 and 25 US cents per pound, influenced by Brazil’s unpredictable crop performance due to severe drought and fires in key sugarcane regions. Such weather extremes have become increasingly common, underscoring the importance of sustainable farming and climate-resilient strategies to safeguard global food supplies. As a vertically integrated agribusiness group, IndoAgri capitalised on its competitive strengths during the year. Full year net profit after tax came in significantly higher at Rp2,110 billion in 2024 compared to Rp936 billion in 2023. The improved profitability was mainly due to higher profit from the Plantation Division. The Plantation Division faced heavy rainfall in Indonesia, which impacted harvests and operations across estates, as well as challenges from aging trees. Our FFB nucleus production declined by 1% year-on-year, while CPO production remained flat. Despite these hurdles, the Division recorded higher profit mainly due to higher selling prices of palm products and lower nucleus palm production costs, tighter cost controls and higher net gains arising from changes in fair value of biological assets. This was partly offset by an increase in other operating expenses. Over in Brazil, CMAA crushed 9.3 million tonnes of sugar cane. Our share of the joint ventures’ profit was lower at Rp44 billion, mainly due to higher financial expenses and a one-off lease write-off. To ensure business continuity in our palm plantations during rainy seasons, we continue to invest in improved infrastructure. Critical areas have now been reinforced with concrete to prevent waterlogging and improve accessibility during adverse weather. In flood-prone areas, we have started testing innovative materials such as artificial rubber. These measures, along with improved drainage systems to manage water flow in floodplains, are crucial for long-term resilience. Downstream, the EOF Division also demonstrated resilience, maintaining profitability by increasing the sales volumes of cooking oils and margarines to meet domestic demand. To support future growth, we are expanding the Tanjung Priok Group Overview Financials Other information Sustainability and Governance Operation and Financial Review 08 Indofood Agri Resources Ltd.
refinery to accommodate a third production line, capable of processing up to 450,000 tonnes of CPO per year. Upon completion of the expansion, scheduled for the second half of 2025, our total CPO refining capacity will increase from 1.7 million tonnes to 2.2 million tonnes annually. EMBEDDING CLIMATE RESILIENCE Bolstered by our adoption of the TCFD framework, we have deepened our understanding of climate-related risks as part of ongoing enterprise risk management (ERM). While challenges such as shifting rainfall patterns, road deterioration and field access during floods are not new, continuously refining our ERM approaches remains essential in addressing escalating physical and transitional risks. Key initiatives have included enhancements to our risk assessment matrix and targeted investments in road infrastructure. In addition to mitigating climate risks, we have advanced our energy conservation efforts by installing more meters to track power utilisation in the factories. These enhancements provide actionable data to address energy inefficiencies at the machine level. For water management, milling operations rely on a mix of rivers, groundwater and rainharvesting systems, while our plantation offices and on-site accommodations draw from groundwater and rain-harvesting. These initiatives underscore our commitment to sustainable resource management. Our original target to achieve ISPO certification across our operations by 2024 was postponed due to new government regulations. We remain committed to maintaining and renewing our current ISPO certificates while ensuring alignment with the new government regulations. Our renewed goal is to achieve 100% ISPO certification across our operations by the end of 2026. Despite this setback, transparency and traceability remain priorities. Today, all FFB and palm kernels processed in our mills are traceable to their source estate, and all processed CPO can be traced to the respective mills. As of end 2024, the Group’s ISPO-certified production stood at 481,000 tonnes, representing 84% of our total nucleus CPO production. In Brazil, CMAA’s Bonsucro-certified production was 2.3 million tonnes of sugar cane, accounting for 46% of total cane production in 2024. Sungai Dua Estate, Riau Group Overview Financials Other information Sustainability and Governance Operation and Financial Review 09 Annual Report 2024
CEO’S MESSAGE Unloading CPO from a tugboat at Tanjung Perak Refinery, Surabaya Group Overview Financials Other information Sustainability and Governance Operation and Financial Review 10 Indofood Agri Resources Ltd.
FFB sorting process in Kencana Sari POM, Lahat, South Sumatra OUTLOOK 2025 Commodity prices are expected to remain highly volatile, driven by uncertainties surrounding weather conditions and geopolitical conflicts. Global demand growth is likely to remain subdued due to weaker economic performance and challenging macroeconomic factors. Despite the outlook, the Plantation Division will continue to focus on targeted action plans, including improving operational results, strengthening cost controls, driving innovations that elevate plantation productivity, and prioritising capital investments in critical areas. With higher refining capacity, the EOF Division will focus on expanding sales volumes through competitive pricing strategies and enhanced distribution, ensuring ample availability to meet Indonesia’s population and per capita income growth. We remain confident that Indonesia’s resilient economic prospects, slower palm production growth and higher biodiesel mandates may provide some support for palm prices. ACKNOWLEDGEMENTS 2024 also marked a period of transition for our Board, following the retirement of our Chairman, Mr Edward Lee Kwong Foo, and our Vice Chairman, Mr Lim Hock San, on 30 April 2024. On behalf of the Company, I would like to express our deepest gratitude for their valuable contributions to the Board and our management team. In addition, I am pleased to welcome the three distinguished individuals who have joined our Board on 1 May 2024: • Mr Philip Yeo Liat Kok, appointed as Lead Independent Director, Chairman of the Board, and Chairman of both the Nominating Committee (NC) and Remuneration Committee (RC); • Mr David Sungkoro, appointed as an Independent Director, Chairman of the Audit and Risk Management Committee (AC & RMC), and Member of the NC; and • Mr Andreas Tan, appointed as an Independent Director, and Member of the AC & RMC, NC and RC. Their extensive expertise and diverse perspectives will undoubtedly strengthen the Board, while ensuring that IndoAgri’s strategies remain aligned with our long-term goals. I also take this opportunity to thank my Board colleagues for their guidance; all management and staff members of IndoAgri for their unwavering dedication; as well as all smallholders and business partners for their vital contributions. To our valued customers and shareholders, I sincerely appreciate your continued trust and support. Mark Julian Wakeford Chief Executive Officer and Executive Director Group Overview Financials Other information Sustainability and Governance Operation and Financial Review 11 Annual Report 2024
GROUP PERFORMANCE REVIEW IndoAgri is a vertically integrated agribusiness group and a palm oil producer in Indonesia, with operations spanning from R&D, seed breeding, oil palm cultivation and milling, to the manufacturing and marketing of cooking oils, margarine and shortening. The Group also cultivates sugar cane, rubber and other crops as part of its diversified portfolio. The Plantation Division is IndoAgri’s principal business. In Indonesia, the Division owns 288,649 hectares of planted crops and operates 27 palm oil mills, three crumb rubber processing facilities, two sheet rubber processing facilities, two sugar mills and refineries, and one factory each for the production of tea and cocoa. It also has an investment in three sugar and ethanol mills in Brazil through CMAA. The Group’s EOF Division owns and operates five CPO refineries across Indonesia to produce a wide range of branded cooking oils, margarine, shortening and specialty fats. FINANCIAL HIGHLIGHTS Palm oil prices rebounded significantly after a stable 2023, trading at their largest premium over soybean oil in 40 years. Higher CPO consumption in the domestic biodiesel sector, coupled with lower yields from adverse weather and tightened supply, pushed domestic CPO prices (KPB) upwards by 17% to an average of Rp13,190 per kg, with international CPO prices (CIF Rotterdam) increasing 15% to an average of USD1,113 per tonne in 2024. In line with higher commodity prices, the Group reported a strong set of results in FY2024. Full year net profit after tax rose significantly to Rp2,110 billion, compared to Rp936 billion in 2023. The improved profitability was mainly due to significantly higher gross profit from the Plantation Division and higher gain arising from changes in fair value of biological assets. This was partly offset by an increase in other operating expenses arising from impairment loss and write-off of property, plant and equipment and higher income tax expenses. FINANCIAL POSITION As at 31 December 2024, the Group reported total noncurrent assets of Rp25.7 trillion, compared to Rp27.2 trillion as at 31 December 2023. The decrease was mainly due to depreciation, impairment loss and write-off of property, plant and equipment, lower plasma receivables, and a reduced carrying value of investments in joint ventures. This was partly offset by higher advances for fixed asset purchases. The Group’s total current assets stood at Rp13.4 trillion as at 31 December 2024, up from Rp9.9 trillion as at 31 December 2023. The increase was driven by higher CPO inventories in the Plantation and EOF Divisions, along with increases in trade and other receivables, advances for raw material purchases, prepaid taxes, biological assets and cash levels. Revenue (Rp trillion) Net Profit to Owners of the Company ((Rp trillion) Profit from Operations (Rp trillion) NAV per share (Rp) 16.0 16.0 17.8 2024 2023 2022 1.1 0.6 0.8 2024 2023 2022 3.2 1.9 2.7 2024 2023 2022 10,242 9,703 9,241 2024 2023 2022 Group Overview Financials Other information Sustainability and Governance Operation and Financial Review 12 Indofood Agri Resources Ltd.
FFB from the oil palm plantation As at 31 December 2024, the Group’s total liabilities remained similar to last year’s Rp13.3 trillion. During the year, certain interest-bearing loans and borrowings were reclassified from current liabilities to non-current liabilities following the rollover of these facilities from short-term to long-term borrowings. The Group recorded net current assets of Rp4.5 trillion as at 31 December 2024, compared to Rp0.4 trillion in the previous year-end. The improved financial position was due to higher cash levels and the rollover of certain matured bank facilities to long-term borrowings. Consequently, the Group’s net debt-to-equity ratio decreased from 0.11 times in the prior year to 0.07 times as at 31 December 2024. CASH FLOWS Despite improved operating results, the Group reported lower net operating cash flows of Rp2.2 trillion in 2024, compared to Rp3.8 trillion in 2023. This was because of higher working capital arising from increased inventories, trade and other receivables, and advances to suppliers. The Group recorded Rp1.4 trillion of investing activities in 2024, a 15% increase over the previous year, mainly due to higher advances for projects and fixed assets. This was partly offset by lower plasma receivables. In terms of financing activities, the Group recorded net cash usage of Rp0.1 trillion in 2024, compared to Rp1.7 trillion in 2023. This was mainly due to additional capital contributions from a non-controlling shareholder and lower net repayment of loans during the year. As of 31 December 2024, the Group’s cash levels increased to Rp5.9 trillion from Rp5.2 trillion a year ago, driven by positive operating free cash flows. Group Overview Financials Other information Sustainability and Governance Operation and Financial Review 13 Annual Report 2024
FINANCIAL HIGHLIGHTS In Rp billion In SGD million* 2022 Actual 2023 Actual 2024 Actual 2022 Actual 2023 Actual 2024 Actual Revenue 17,797 16,003 15,968 1,500 1,349 1,346 Gross profit 4,559 3,282 4,765 384 277 402 (Loss)/gain arising from changes in fair value of biological assets (136) 13 318 (11) 1 27 Profit from operations 2,702 1,948 3,239 228 164 273 Net profit after tax 1,318 936 2,110 111 79 178 Profit attributable to owners of the Company 770 614 1,119 65 52 94 EPS (in Rp)/(in SGD‘cents) 552 440 801 4.7 3.7 6.7 Current assets 10,552 9,944 13,410 888 837 1,129 Fixed assets 18,136 17,582 16,404 1,527 1,480 1,381 Other non-current assets 9,578 9,592 9,316 806 808 784 Total assets 38,266 37,118 39,130 3,222 3,125 3,294 Current liabilities 9,883 9,582 8,933 832 807 752 Non-current liabilities 5,231 3,620 4,334 440 305 365 Total liabilities 15,114 13,202 13,267 1,272 1,111 1,117 Shareholders' equity 12,900 13,545 14,298 1,086 1,140 1,204 Total equity 23,152 23,916 25,863 1,949 2,013 2,177 Total debt 9,144 7,796 7,771 770 656 654 Cash 4,422 5,226 5,946 372 440 501 2022 Actual 2023 Actual 2024 Actual Sales decline (9.5%) (10.1%) (0.2%) Gross profit margin 25.6% 20.5% 29.8% Profit from operations margin 15.2% 12.2% 20.3% Net profit after tax margin 7.4% 5.8% 13.2% Profit attributable to owners of the Company margin 4.3% 3.8% 7.0% Return on assets1 7.1% 5.2% 8.3% Return on equity2 6.0% 4.5% 7.8% Current ratio (times) 1.1 1.0 1.5 Net debt to equity ratio (times)3 0.20 0.11 0.07 Total debt to total assets ratio (times) 0.24 0.21 0.20 1 Profit from operations divided by total assets 2 Profit attributable to owners of the Company divided by shareholders’ equity 3 Net debt divided by total equity * For ease of reference, 2022 to 2024 Income Statement and Balance Sheet items are converted at exchange rates of Rp11,867/SGD1 and Rp11,878/SGD1, respectively. GROUP PERFORMANCE REVIEW Group Overview Financials Other information Sustainability and Governance Operation and Financial Review 14 Indofood Agri Resources Ltd.
OPERATIONAL HIGHLIGHTS The table below relates to business operations in Indonesia. For the operation in Brazil, please refer to page 18 of this annual report. In Hectares (unless otherwise stated) 2022 2023 2024 Planted Area – Nucleus Oil Palm 244,768 244,337 241,208 Mature 218,064 220,531 220,318 Immature 26,704 23,806 20,890 Rubber 16,074 16,238 16,231 Mature 14,033 14,195 14,544 Immature 2,041 2,043 1,687 Sugar Cane 14,056 13,384 13,583 Others 19,590 19,470 17,627 Mature 16,441 16,252 14,782 Immature 3,149 3,218 2,845 Total 294,488 293,429 288,649 Planted Area – Plasma Oil Palm and Rubber 90,551 90,867 91,523 Distribution of Planted Areas – Nucleus Riau 56,145 56,175 56,172 North Sumatra 36,473 36,903 37,228 South Sumatra 95,919 94,532 95,014 West Kalimantan 24,742 24,675 21,722 East Kalimantan 61,651 61,640 58,851 Central Kalimantan 10,842 10,841 10,965 Java 3,249 3,177 3,217 Sulawesi 5,467 5,486 5,480 Total 294,488 293,429 288,649 Production Volume (’000 tonnes) Total FFB 3,741 3,632 3,645 FFB – Nucleus 2,812 2,784 2,758 CPO 736 708 706 Palm Kernel (PK) 180 175 167 Rubber 5.2 4.7 4.8 Sugar1 57 58 54 Sales Volume (’000 tonnes) CPO2 701 743 690 PK and PK Related Products3 166 184 159 Rubber 5.8 5.1 4.6 Sugar 59 55 53 Oil Palm Seeds (million units) 9.3 9.7 10.4 1 Comprised of sugar production in South Sumatra, share of sugar produced in Central Java 2 Sales to external and internal parties 3 Comprised of PK, Palm Kernel Oil (PKO) and Palm Kernel Expeller (PKE) Group Overview Financials Other information Sustainability and Governance Operation and Financial Review 15 Annual Report 2024
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.
2025 OUTLOOK Commodity prices are expected to remain highly volatile, driven by uncertainties surrounding weather conditions and geopolitical conflicts. Global demand growth is likely to remain subdued due to weaker economic performance and challenging macroeconomic factors. Despite the outlook, the Plantation Division will continue to focus on targeted action plans, including improving operational results, strengthening cost controls, driving innovations that elevate plantation productivity, and prioritising capital investments in critical areas. Fire monitoring in Cipta Graha Estate, Kutai Timur, East Kalimantan Group Overview Financials Other information Sustainability and Governance Operation and Financial Review 17 Annual Report 2024
CMAA’s UVT sugar and ethanol mill in Brazil PLANTATION REVIEW Operation in Brazil The Plantation Division’s sugar and ethanol operations in Brazil are held and managed through IndoAgri’s 36.21% stake in CMAA and Bússola. CMAA operates three sugar and ethanol mills in Brazil with a combined annual sugar cane crushing capacity of 9.7 million tonnes, whereas Bússola owns agricultural land. 2024 REVIEW Global sugar prices fluctuated between 18 and 25 US cents per pound, influenced by Brazil’s unpredictable crop performance due to severe drought and fires in key sugar cane regions, along with typical variations in global crop forecasts. CMAA crushed 9.3 million tonnes of sugar cane, compared to 9.45 million tonnes in the previous season, producing 700,000 tonnes of raw sugar, 368,000 m3 of ethanol and 400,000 MWh of electricity. Our share of the joint ventures’ profit was lower at Rp44 billion despite higher gross profit from raw sugar sales. This was mainly due to higher financial expenses and a one-off lease write-off. CMAA’s Bonsucro-certified production was 2.3 million tonnes of sugar cane, accounting for 46% of total cane production in 2024. This was a reduction from 73% in 2023 due to changes in Bonsucro standards, as sugar cane planted on pasturelands prior to January 2008 is no longer eligible for inclusion. 2025 OUTLOOK Global sugar prices are expected to be influenced by 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 will also be impacted by developments in other key growing regions, in particular, India’s potential sugar subsidies, export volumes and biofuel policy. Amid a challenging economic landscape 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 expand its crushing capacity by one million tonnes to reach a total of 10.7 million tonnes in the 2025/26 crop year. This expanded capacity will allow us to optimise profitability at one of the mills and lower costs. Group Overview Financials Other information Sustainability and Governance Operation and Financial Review 18 Indofood Agri Resources Ltd.
PLANTATION REVIEW R&D in Indonesia The Plantation Division operates two oil palm R&D centres – SumBio in Bah Lias, North Sumatra, and PT SAIN in Pekanbaru, Riau. Both centres are certified palm seed producers, renowned for superior seeds, which are prized for their high-yielding qualities, drought tolerance and disease resistance. Staffed by experienced agronomists and researchers, the centres conduct extensive field work on crop yields, crop resilience, pest and disease control and estate management practices. Additionally, the Division operates a R&D facility for sugar cane in South Sumatra. Beyond these activities, the R&D centres are responsible for establishing guidelines and practices for the productive and sustainable use of limited land resources. These innovations contribute to sustainable oil palm farming in Indonesia, strengthening IndoAgri’s long-term competitiveness. The key practices include block-based farming, soil conservation using Vetiver systems, recycling by-products like EFB and POME into soil mulch and nutrient substitutes, and integrating natural pest management strategies. 2024 REVIEW In 2024, SumBio and PT SAIN’s crossbreeding programmes focused on developing new and high-yielding seed varieties with unique traits. Key achievements included identifying a potential Ganoderma marker and gene associated with Ganoderma resistance — a project conducted jointly with other companies. Additionally, the centres developed a molecular marker to differentiate virescens and nigrescens fruit types. They also continued to observe and introduce tenera clones of palm seeds, which combine virescens traits with long stalks to enable more efficient manual and mechanised harvesting. Aside from supplying seeds for internal planting and replanting programmes, the Division sold 10.4 million oil palm seeds to plantation companies and farmers in 2024. This represented an 7% increase in sales volume compared to the previous year. To maintain high seed quality and prevent dura contamination, Sumbio performed random seed checks using DNA analysis. To safeguard against counterfeits, we continued using UV markers for palm seed authentication. Other achievements included refining the fertiliser mix by incorporating compost to supplement organic fertilisers, and applying controlledrelease fertilisers on immature oil palms. To further enhance our cultivation methods, we introduced drone sprayers for controlling leaf-eating caterpillars, improving the efficiency and safety of our workers and environmental sustainability. We also continued to reduce chemical pesticide use across our plantations by establishing ecosystems of natural predators and parasitoids to combat pests such as bagworms, hairy worms and nettle caterpillars. Additionally, we intensified crop protection by using entomo-pathogenic agents (fungi, bacteria and viruses) as biopesticides, along with pest predators (e.g. Eocanthecona sp. and Sycanus sp.) and UV light traps, to manage leafeating caterpillars. Drone images, integrated with the GIS and ground GPS data, have enabled real-time monitoring of field conditions, providing precise assessments of the health of our oil palms. Additionally, regular spatiotemporal analyses have improved pest control and risk management outcomes. By correlating agronomic parameters with aerial data, we swiftly remedied field situations, achieving higher productivity and cost savings. For our Indonesian sugar operations, we continued to cultivate high-yield cane varieties, which have demonstrated commercial viability. The successful integration of drones for sugar cane ripening has also enhanced productivity and cost efficiency. 2025 OUTLOOK We will continue refining our seed-cultivation techniques and proven agronomic practices to enhance crop management and optimise planting densities. At the same time, we will develop in-house capabilities to analyse various markers associated with the Ganoderma project. To accelerate the key R&D programmes, we will actively pursue collaborations with universities and research institutions. Data from our soil hydrology studies, satellite sources and 3D topographic maps will be integrated with WebGIS to support remote decision-making. By computing precise fertiliser requirements and adjusting yield predictions on a block-by-block basis, WebGIS will significantly lower our ground-sampling costs. We will continue incorporating WebGIS into our SAP system to enhance oversight of our plantation operations and crop conditions. We will also leverage data analytics and machine learning to improve precision agriculture, optimise yields, reduce production costs and promote sustainable land use. High-yielding oil palm seeds produced by SumBio Group Overview Financials Other information Sustainability and Governance Operation and Financial Review 19 Annual Report 2024
EDIBLE OILS & FATS REVIEW Operation in Indonesia Cooking with Bimoli cooking oil Group Overview Financials Other information Sustainability and Governance Operation and Financial Review 20 Indofood Agri Resources Ltd.
Group Overview Financials Other information Sustainability and Governance Operation and Financial Review 21 Annual Report 2024
EDIBLE OILS & FATS REVIEW Operation in Indonesia The Edible Oils & Fats (EOF) Division produces palm oil products, margarine and palm-based derivatives (RBD palm stearin and palm fatty acid distillate) for consumer and industrial markets. The Division operates five refineries with a total annual processing capacity of 1.7 million tonnes of CPO. The consumer cooking oils are retailed under Bimoli, Bimoli Spesial and Happy, while the margarines are sold under Amanda, Palmia and Royal Palmia. The industrial cooking oils are supplied directly to Indofood and other food manufacturers, while the margarine and shortening products are marketed to confectioneries, bakeries and food manufacturers under Amanda, Delima, Malinda, Palmia and Simas. Sales and distribution of EOF products are supported by Indofood’s Distribution Group, which has an extensive network across Indonesia. More than 80% of EOF products are sold domestically, with the rest exported to countries across Asia, Africa, America and the Middle East. 2024 REVIEW The EOF Division remained resilient, maintaining profitability by boosting sales volumes of cooking oils and margarines to meet domestic demand. Furthermore, it implemented competitive pricing strategies that facilitated regular price adjustments, ensuring continued profitability while ramping up advertising and promotions. As a result, the Division saw a 9% increase in revenue to Rp12.3 trillion, driven mainly by higher sales volumes and selling prices. Operating profit rose to Rp817 billion from Rp647 billion in the previous year. IndoAgri’s vertically integrated business model, which ensured a stable supply of raw materials to the Division, was integral to the solid performance. In 2024, 78% of the CPO used in the production of cooking oils, margarine and shortening came from our own plantations. During the year, the market position of Bimoli cooking oils was successfully reinforced through competitive pricing. Digital marketing campaigns helped to enhance brand awareness and consumer engagement, keeping Bimoli top-of-mind. Additionally, the comprehensive trade campaign “Semua Jual Bimoli”, alongside consumer promotions, improved Bimoli’s visibility and availability across both general and modern trade channels. Likewise, Palmia consumer margarines saw significant sales growth, particularly in the modern trade wholesale segment. Brand-building efforts were bolstered by new TV commercials for Palmia Serbaguna and Royal Palmia, aired on major television stations. Consumer engagement was further strengthened through digital marketing and collaborations with key modern trade wholesalers. These efforts were complemented by retail promotions across the general and modern trades to drive market penetration and expand Palmia’s consumer base. The R&D team supported the EOF Division by enhancing the nutritional content of cooking oils and margarines to better meet the dietary needs of Indonesian consumers. Notable achievements included tailored cooking oil formulations for industrial users, multivitamin-enriched margarines for households, and the innovation of smarter packaging designs using more environmentally friendly materials. 2025 OUTLOOK Approaching 2025, we will continue to focus on driving the growth of EOF sales volumes by maintaining competitive pricing against key competitors and improving distribution to enhance product availability. We will also prioritise the refreshment of packaging designs and the promotion of flavoured consumer margarines, increase in-store visibility and strengthen brand leadership. To meet rising demands driven by Indonesia’s population and per capita income growth, we are expanding our Tanjung Priok refinery by adding a third production line, capable of processing up to 450,000 tonnes of CPO per year. Upon completion in the second half of 2025, the expansion will increase the total CPO refining capacity from 1.7 million tonnes to 2.2 million tonnes annually. Our certified refineries at Tanjung Priok Group Overview Financials Other information Sustainability and Governance Operation and Financial Review 22 Indofood Agri Resources Ltd.
MANUFACTURING OF EOF PRODUCTS Margarine Fresh Fruit Bunches Crude Palm Oil Refining Palm Kernel Crushing RBD Palm Oil Lauric Oil Margarine & Shortening Plant Blending Blending Mixing Tank Mixing Tank Chilling Chilling Packaging Packaging RBD Palm Olein Packaging Palm Kernel Expeller Milling Flavouring & Vitamins Water & Salt Shortening Cooking Oil Palm Kernel Oil Empty Fruit Bunches and Effluent Palm Fatty Acid Distillate Fractionating & Filtration RBD Palm Stearin Nitrogen Gas Group Overview Financials Other information Sustainability and Governance Operation and Financial Review 23 Annual Report 2024
SUSTAINABILITY AT INDOAGRI IndoAgri remains committed to enhancing the maturity of our sustainable business practices. As a plantation operator, we recognise the responsibility to actively address our ESG risk factors while meeting the global demand for sustainable palm oil production. Our focus on sustainable operations is driven by R&D, continuous innovation and productivity enhancements. We also prioritise employee safety and well-being, and provide meaningful livelihoods for local communities through employment, responsible land management and economic contributions. Guided by our Sustainable Agriculture Policy, we ensure responsible operations and traceable produce. The key Policy commitments are as follows: • No Deforestation; • No Planting on Peat, Regardless of Depth; • No Burning; • Preservation of High Conservation Value and High Carbon Stock Areas; • Respect for Labour and Human Rights, including Freedom of Association and Non-Discrimination; and • Free, Prior and Informed Consent (FPIC). Acknowledging the agribusiness sector’s vulnerability to climate change, we have steadily aligned our activities with the TCFD recommendations since 2022. Our enhanced enterprise risk management (ERM) framework now includes additional climate-related physical and transition risks. Through close collaboration between our ERM, research, sustainability and operational teams, we have developed a comprehensive risk assessment matrix covering both financial and operational impacts. This has improved our ability to effectively identify, assess, manage and monitor challenges, particularly physical risks like flooding, water shortages and fires. SUSTAINABILITY HIGHLIGHTS IN 2024 • Certified CPO in Indonesia – 481,000 tonnes of ISPO-certified CPO, representing 84% of total nucleus CPO production. • Certified Sugar Cane in Brazil – 2.3 million tonnes of Bonsucro-certified production, representing 46% of CMAA’s own sugarcane production. • Occupational Health and Safety – Zero paraquat use since 2018; – 100% of sites certified to SMK3 occupational health and safety (OHS) management system, with 60 sites achieving the SMK3 Gold award; – 11 sites with zero accident awards from the Ministry of Labour; – 17% decrease in rate of recordable work-related injuries; and – Two work-related fatalities (one at an oil palm estate and one at a palm oil mill). • Worker Welfare – Compliance with minimum wage and employment contract regulations for full-time and seasonal workers; and – No registered worker below 18 years of age. • Energy and Water Consumption (2020 baseline) – 4% reduction in energy intensity in mills; – 26% increase in energy intensity in refineries;* – 2% reduction in water intensity in mills; – 33% increase in water intensity in refineries;* – 99% of fuel used in mills from renewable sources; and – 100% of milling waste reused by estates and mills. • Smallholders – Four KUDs have obtained ISPO certification, with six currently undergoing the audit process. KEY SUSTAINABILITY TARGETS • Palm oil production (estates and mills): Achieve ISPO certification by end of 2026. • Palm oil refineries: Source all CPO supplies in accordance with our Sustainable Agriculture Policy and achieve ISPO-certification by end of 2026. • Zero fatality. SUSTAINABILITY MANAGEMENT The Sustainable Agriculture Policy applies to all operational units, including plasma smallholders and third-party CPO suppliers. It outlines the strategies for accountable and traceable supply chains, human rights, prevention of deforestation, ESG risk assessment and management, and stakeholder engagement. Our Labour Policy further protects the rights of those working in and living around our estates. This Policy is applicable to all employees, including plasma smallholders and third parties who supply to our factories and refineries. All suppliers are encouraged to make similar commitments in their own operations to align with our Policy. The Group’s commitments and procedures around deforestation, land rights, peatland, burning, smallholders and human rights are benchmarked against the ISPO certification standards and international best practices, and covered in our Sustainable Agriculture and Labour * 2024 energy and water intensity per tonne of material produced at our refineries increased against the 2020 baseline due to fluctuations in the quality of raw materials and additional processing performed at one refinery. Group Overview Financials Other information Sustainability and Governance Operation and Financial Review 24 Indofood Agri Resources Ltd.
SUSTAINABILITY MANAGEMENT ASSESSMENT • Indicators • Targets • Evaluation through audit • Materiality review COMMITMENT • Mission • Code of conduct • Policies • Values ACTION • R&D • Management systems • Certifications • Stakeholders engagement • Internal collaboration • Training Policies. The ISPO certification is a mandatory and legally binding certification system for all oil palm growers in Indonesia. A SYSTEMATIC APPROACH We manage our ESG risks and opportunities through staff training, robust business processes, a culture of accountability, and community partnerships. Commitment Our sustainability team comprises well-trained professionals who manage our material sustainability topics and impacts in accordance with the Group’s mission and values. Planning The Group’s ERM framework, rigorous approaches to corporate governance, and established internal controls provide additional lines of defence against broader risks and uncertainties. We apply R&D to innovate and achieve sustainable growth in our domestic and international markets. Action Our local teams implement and enforce the Group’s sustainability policies, commitments and programmes. We use management systems and standard operating procedures to maintain quality and drive improvements in areas such as R&D, workplace health and safety, food safety, environmental management and information control. Our six Sustainability Programmes direct the Group’s efforts across a range of material sustainability topics. In addition, the sustainability team coordinates the initiatives underlying the achievement of certifications such as ISPO and PROPER. Assessment and reporting Our SAP system and the sustainability information system are used to collate data and monitor progress against the Group’s key sustainability targets. Evaluation is carried out via regular audits, performance trend analysis and stakeholder feedback. SUSTAINABILITY GOVERNANCE IndoAgri’s Board of Directors actively reviews the Group’s sustainability risks and opportunities, material ESG topics, and management and reporting processes. The Board receives quarterly updates on relevant sustainability risks and concerns from the Audit & Risk Management Committee. The CEO steers the Group’s sustainability performance, and is personally involved in all discussions and correspondences relating to sustainability. The CEO is supported by the management team, ERM unit, R&D team, as well as sustainability representatives from all business units. PLANNING • Government policy • Corporate business system • Sustainability Programmes REPORTING • Annual Report • Sustainability Report • Website Group Overview Financials Other information Sustainability and Governance Operation and Financial Review 25 Annual Report 2024
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