Page 17 - sr_2013.PDF

Anticipating higher FFB production from developing estates,
we expanded our West Kalimantan mill in 2013, while another
expansion in South Sumatra is due for completion in 2014.
With the completion of the new 150MT/day Palm Kernel Oil plant
in Riau in Q1 2014, the Group is now working towards producing
sustainable Palm Kernel Oil as the palm kernels come from our
RSPO certified and audited estates.
Outside Indonesia, the Group acquired a 50% stake in CMAA, an
investment that offers insights on efficient cane harvesting methods
utilised in Brazil. Brazil supplies over 40% of world sugar exports
as the lowest cost sugar producer. We also acquired an effective
10.2% stake in RHI, the largest integrated sugar business in the
Philippines, and the third largest sugar market in Southeast Asia,
after Thailand and Indonesia.
Following these investments, CMAA will commence the process for
the Bonsucro certification of their operations in 2014. Bonsucro
is a globally recognised standard, and a multi-stakeholder
non-profit organisation, similar to RSPO. We are also reviewing the
certification targets for our Indonesian sugar operations.
VALUE CHAIN
The Group’s vertically integrated agribusiness model is driven by
value creation across the entire value chain – from the production
of planting material, to the development of plantations, harvesting,
milling, refining and processing of CPO into cooking oil, margarine
and shortening.
We are pursuing sustained growth from seed breeding to consumer
sales through the development of upstream and downstream
businesses in Indonesia. The basic structure of the value chain
in our business is illustrated below.
According to market research, our branded cooking oils and
margarine will continue to dominate Indonesia’s consumer market.
They are mostly sold via direct channels and through local and
national distributors serving approximately 370,000 retail outlets
across Indonesia. 10% of our branded cooking oils and margarine
are exported to 50 countries.
We work with different suppliers along the value chain. In 2013,
approximately 59% of the CPO used in the production of cooking
oil, margarine and shortening were produced by the Plantation
Division. The balance 41% of CPO requirements for our refineries
were purchased from external parties.
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R&D / Seed Breeding Plantations Mills Edible Oils and Fats Distribution
33m oil palm seeds p.a.
Diversified crops
Indonesia
Palm: 239,921Ha
Production FY13
CPO: 810,000MT
PK: 187,000MT
21 palm oil mills at
capacity 5.2m MT p.a.
Leading market share in Indonesia branded
cooking oil and margarine markets
Strong sales and marketing expertise and
extensive distribution network, serving ~370,000
retail outlets in Indonesia
Leverage on Indofood’s 1,100 stock points
5 refineries at capacity: 1.4m MT p.a.
Develops sugar varieties
Indonesia
Cane: 11,645Ha
Brazil
Sugar Cane: 42,517Ha
2 sugar mills/refineries
in Indonesia at capacity
2.2m MT p.a.;
1 sugar mill in Brazil at
capacity 3.0m MT p.a.
Rubber: 21,759Ha 4 crumb/ 3 sheet
rubber factories
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