Page 16 - sr_2012.pdf

products: from farm to fork

oil palm

Palm oil is IndoAgri’s key product. Our Edible Oils and Fats (EOF) Division

procured approximately 65% of the Crude Palm Oil (CPO) produced

by IndoAgri. Sales of CPO and Palm Kernel (PK) to external parties

accounted for 20% of 2012 revenue. The primary market for our palm

oil products is in Indonesia and less than 1% of our CPO is exported.

CPO prices (CIF Rotterdam) in 2012 averaged on a full year basis at

USD 1,006 per tonne, compared to USD 1,128 per tonne in 2011.

The lower CPO price reflected the slowdown of the global economy,

particularly in Europe and China, slow off-take of biodiesel in Europe

than forecast and increasing palm oil stocks.

The outlook of the palm oil industry remains positive as global demand

is well supported by consumption growth in emerging Asian economies.

Indonesia, with its large population of 240 million people, is one of the

largest palm oil consumers after China and India. Indonesia’s thriving

food and beverage industry is also expected to add to the domestic

demand for palm oil products.

oil palm seeds

IndoAgri operates two advanced R&D centres: Sumatra Bioscience (SumBio) in Bah Lias, North Sumatra, and PT

SAIN in Pekanbaru, Riau. They are also two of ten oil palm seed breeding centres in Indonesia. In 2012, IndoAgri

sold 24.7 million seeds compared with 23.5 million seeds in 2011.

SumBio is a premier producer of oil palm seeds in Indonesia, producing up to 25 million superior and high yielding

oil palm seeds annually. The seeds are sold in the market at a price of USD 1.50 per seed. A barcode system is

used to track each batch of germinated seeds, which eliminates missing records, increases accuracy, speeds up

administrative work and eases tracing, checking, reviewing and execution of data throughout the entire process.

Each germinated seed is further marked with “BLRS” (Bah Lias Research Station) to authenticate its source of origin.

PT SAIN obtained seed certification from the Indonesian Government in September 2011 for four premium DP

varieties: SAIN-1, SAIN-2, SAIN-3 and SAIN-4 and produces up to 8 million seeds per year, bringing IndoAgri’s

production to 33 million high quality seeds per annum. The seeds are sold domestically and also used in IndoAgri’s

own plantations. In addition to the sales to plantation companies, PT SAIN also sold seeds to smallholders in

small quantities, some as low as 500 seeds, at the same price, i.e. at Rp. 9,000. SumBio also sold three month

old seedlings at Rp. 15,000 and ready to plant oil palm seedlings to the farmers at Rp. 39,500 each. Since the

quality of the seedling can affect the yield of the oil palm over its lifespan, the farmers would be more assured of

building a successful agriculture business using good quality seedling that were carefully nurtured by IndoAgri’s

professional teams.

In our Vision 30:30:25, we strive for precision agronomy per 30 hectares, FFB yields of 30 tonnes per hectare

and 25% CPO extraction rates from the new plantings using our latest seed material. Both Sumbio and PT SAIN

seeds have proven in field trials to achieve these target results.

characteristics of our oil palm seeds

CHARACTERISTICS

PT SAIN

SUMBIO

Potential bunch production (FFB)

31–34 tonnes/ha/yr

30–35 tonnes/ha/yr

Potential palm oil production (CPO)

8.7–9.0 tonnes/ha/yr

8.1–9.3 tonnes/ha/yr

Potential kernel oil production (PKO)

0.4–0.9 tonnes/ha/yr

0.9–1.2 tonnes/ha/yr

Oil extraction rate (OER)

26.0–26.5%

27.2–29.6%

Height increment

63–67 cm/yr

69–80 cm/yr

Planting density

143 palms/ha

Note:

PT SAIN uses parent palm materials from ASD Costa Rica and OPRI from Ghana, derived from renowned breeding populations and breeding centres of Southeast Asia and

West Africa. Sumbio uses palm materials from elite Harrisons & Crosfield Del dura and AVROS populations from Dam, Papua New Guinea, and various African breeding

populations including Cameroon, Congo, Ivory Coast, Nigeria and Tanzania.

Indofood Agri Resources Ltd.