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Various efforts were undertaken in 2013 to support micro-
entrepreneurship projects as a means to improve the livelihoods
of the local people. We have been supporting the Indonesian
government’s nucleus-plasma programme by assisting local
smallholders to develop their own sustainable oil palm plots
through provision of high yielding seeds, training, financing and
management of the plasma plots. We are stepping up efforts by
having our first batch of smallholders certified by RSPO in 2015.
In other areas, we helped housewives in local communities to
start food businesses by providing bakery training and donating
kitchen appliances to them. We sponsored fishermen in nearby
villages to build fish cages for sustainable fish farming. These
are all parts of our outreach programme to improve communities
near our estates.
In Indonesia, cataract affects more than 2 million people across all
age groups. To help reduce these numbers, we are working with
doctors from the Indonesian army to conduct medical operations
on cataract and other eye diseases in the field for patients living
on our estates. As of April 2014, we have performed cataract
operations on 263 people in Kalimantan and 201 in South Sumatra.
DIVERSIFICATION INTO OTHER CROPS
It has always been a strategic consideration for IndoAgri to diversify
its investments into other agriculture products in order to mitigate
the cyclical risk of any particular crop and to optimise the use of
our plantations and resources. The knowledge we have gained
growing different crops enables us to identify the best crops for
different types of terrain and location, and guide us in our strategy
to expand into other crops.
In 2013, we invested in sugar cane plantations and mills in Brazil
and the Philippines. These investments significantly expand our
sugar assets outside of Indonesia. Through Companhia Mineira
de Açúcar e Álcool Participações (CMAA), our first overseas
operation in Brazil, we acquired the latest GPS and mechanisation
technology in sugar cane cultivation.
In 2014, CMAA will start the process to apply for the Bonsucro
certification for its operations. Bonsucro is a globally recognised
standard, and a multi-stakeholder non-profit organisation, similar
to RSPO. It promotes measureable standards that balance the
environmental and social impacts of sugar cane production and
primary processing with the economic viability of business operation.
We are currently reviewing the techniques and technology used
in Brazil and the Philippines, before establishing a common
set of sustainability standards and guidelines that will allow us
to adopt the best practices in our sugar plantations and by our
supply chains.
JOURNEY AHEAD
The commodity markets are typically characterised by volatile
pricing and intense competition. The fluctuating energy market
and wavering demand for biofuels are also strongly influencing
the price and production of sugar and palm oil.
The global population crossed the seven-billion mark in 2014.
With more people migrating into cities, there will be increasing
demand for both staple and supplementary food. As the world
trudges surely towards a global population of nine billion people
by 2050, global food production has to increase by 70%, with
20% to be achieved before 2020.
This irreversible trend entails more farming for food crops, which
will compete with one another, as well as other natural reserve
priorities, for land space, water and other scarce resources. The
abrupt changes in global climatic patterns has already taken its
toll on crop production worldwide, with crop growth disrupted by
the intermittent spells of drought and flood. It will no doubt have
other indeterminable implications on the land and environment
that can only be revealed with time.
Sustainable agriculture and responsible business practices are
critical to ensure that the environment, land and indigenous
people can continue to support our operations to meet the growing
global demand for food and biofuel. It is with this mission that
we have set out our sustainability strategy with six supporting
programmes, which can be seen on page 23 of this report to
address the current and emerging challenges and to mitigate the
impact of our operations on the environment.
APPRECIATION
A momentous journey is never taken alone. The sustainability
programme is such an endeavour that requires the collaboration
of the best minds and the enterprise of the human spirits to seek
innovative and responsible ways to conduct our business and
operations with minimal impact to the environment and without
disadvantaging the local communities.
I am deeply appreciative of the Board of Directors for their
leadership and insights, and to my colleagues in the management
team, their faithfulness and support. I pay special tribute to our
41,405 employees and approximately 50,000 smallholders who
work relentlessly together to achieve our sustainability targets. It
is their drive and determination that provide the momentum and
motivation that turn an ideal into far-reaching programmes and
tangible results!
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CEO
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