plantation review palm & rubber - listed...

The Plantation Division manages and cultivates IndoAgri's oil palm,

sugar cane, rubber and other estates, and derives its revenue

primarily from the sale of crude palm oil (CPO), palm kernel (PK)

and related by-products. As at 31 December 2013, the Group

has a total planted acreage of 276,709 hectares in Indonesia,

comprising 239,921 hectares of oil palm, which occupied 87%

of total planted area, followed by 21,759 hectares of rubber, and

11,645 hectares of sugar cane. We also manage approximately

86,215 hectares of oil palm estate and 3,999 hectares of rubber

estate under the government's plasma programme.

The Division’s 21 palm oil mills across Sumatra and Kalimantan

have a combined FFB processing capacity of 5.2 million tonnes

per annum. We also operate four crumb rubber processing

facilities, three sheet rubber processing facilities, two sugar mills

and refi neries, a cocoa factory and a tea factory.

Supporting efforts to enhance estate quality and output, the

Division operates two advanced research and development

centres, SumBio and PT SAIN, based in Bah Lias, North Sumatra

and Pekanbaru, Riau respectively. In 2013, these centres

produced a combined output of 26.5 million premium seeds,

aided by their sophisticated in-house seed breeding programmes

and cultivation techniques.

In achieving sustainable low-cost production, the Plantation

Division maximises yields and reduces operational costs through

the following agronomy and crop protection best practices:

• Performing block-by-block analyses to provide specifi c

recommendations on crop management and planting densities,

fertiliser and herbicide usage, as well as predictions on yields and

oil extraction rates.

• Optimising crop management and harvesting practices to

maximise production and collection of FFB.

• Leveraging biological methods to improve pest and palm tree

disease control.

• Improving mechanisation to increase effi ciency and reduce costs.

• Utilising organic fertilisers and all by-products while reducing

reliance on inorganic fertilisers.

2013 REVIEW

The global economic slowdown affecting major markets like China

and Europe, coupled with slower biodiesel demand in Europe

have put sustained pressure on commodity prices. CPO prices

(CIF Rotterdam) averaged US$857 per tonne in 2013, signifi cantly

lower than 2012’s US$1,006.

Plantation Division’s total revenue grew 1% to Rp8.5 trillion in

2013 over the previous year. Likewise, EBITDA margin came in

lower, in line with lower average selling prices of CPO and PK of

2% and 4% respectively, as well as higher production costs.

PLANTATION REVIEW

PALM & RUBBER

20 INDOFOOD AGRI RESOURCES LTD • ANNUAL REPORT 2013

Taking a step towards diversifi cation, the Group acquired a 79.7%

interest in MPM for Rp330 billion through its subsidiaries, PT

SIMP and Lonsum. MPM owns the SAL Group, which holds three

industrial forest plantation concessions totalling 73,330 hectares

in Berau and East Kutai, East Kalimantan.

Palm

As at 31 December 2013, the Division’s South Sumatra and

Kalimantan estates achieved 9,791 hectares of nucleus oil palm

new plantings, compared to 13,383 hectares in 2012. Mature

estates covered 177,099 hectares versus 176,105 hectares in

2012, while immature estates which will boost CPO production

and volume growth when they become productive in the next few

years, occupied 62,823 hectares or 26% of total planted palm

area. The average age of our oil palms is about 12 years.

With lower nucleus production and plasma purchases, FFB

production decreased by 8% from last year’s 4,107,000 tonnes

to 3,761,000 tonnes in 2013. Correspondingly, CPO production

declined by 8% from 880,000 tonnes in 2012 to 810,000 tonnes

in 2013. Oil extraction rates increased slightly to 22.1% versus

21.7% in 2012, while internal CPO sales to the Edible Oils & Fats

Division reduced by 7% to 510,000 tonnes from 548,000 tonnes

in 2012 as the purchase of external CPO from Kalimantan estates

lowered transportation costs.

In total, IndoAgri’s certifi ed CPO production of 248,000 tonnes

(roughly 31% of 2013’s total CPO output) is comparable to 2012

− a refl ection of the continued commitment towards sustainable

agriculture.

239,921 Ha 150,076 Ha 89,845 Ha

23%

42%

9%

26% 32%17%

9%

9%

28%64%

10%

31%

Group SIMP Lonsum

> 20 years> 7-20 years> 4-6 years> Immature

Oil Palm Plantation Age Profi le

Soy Oil Premium Over CPO

CPO (CIF Rotterdam)

Soy Oil (CIF Rotterdam)

CPO vs Soy Oil Price

US$ / tonne

1,800

1,600

1,400

1,200

1,000

800

600

400

200

0

Jan ’06

Jun ’06

Nov

’06

Apr

’07

Sep ’07

Feb ’08

Jul ’0

8

Dec ’08

May

’09

Oct ’0

9

Mar

’10

Aug ’10

Jan ’11

Jun ’11

Nov

’11

Apr

’12

Sep ’12

Feb ’13

Jul ’1

3

Dec ’13

21INDOFOOD AGRI RESOURCES LTD • ANNUAL REPORT 2013

PLANTATION REVIEW

PALM & RUBBER (Cont’d)

Rubber

The Division’s rubber estates are spread across North and South

Sumatra, East Kalimantan and Sulawesi. As at end 2013, nucleus

rubber estates occupied 21,759 hectares, of which 22% are

immature. The average age of our rubber trees is about 14 years.

With higher production in Thailand and Indonesia as well as weaker

demand from major rubber consuming countries particularly

China, US and Europe, rubber prices (RSS3 SICOM) fell by over

20% since beginning of last year and averaged US$2,795 per

tonne in 2013 compared to US$3,384 a year ago. The declining

prices have also affected rubber sales and earnings at Lonsum,

the subsidiary owning most of our rubber estates.

Sheet rubber, crumb rubber and cup lump remain the Division’s key

rubber products. Notwithstanding, growth in rubber production for

2013 was fl at at 18,500 tonnes due to holdbacks on land expansion

and some replanting activities.

During the year, the Group sold 84% of its rubber in export

markets including Singapore, the United Kingdom and the United

States. The rest were sold domestically.

FFB Production (Nuclues)

’000 mt

2,613 2,564

2,797

2,9732,8953,000

2,500

2,000

1,500

1,000

500

2009 2010 2011 2012 2013

CPO Production

’000 mt

763 740

838

880

810

1,000

800

600

400

200

0

2009 2010 2011 2012 2013

RSS3 (Sheet) TSR20 (Block Form)

Rubber Prices

US$ / tonne

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

Jan ’06

Jun ’06

Nov

’06

Apr

’07

Sep ’07

Feb ’08

Jul ’0

8

Dec ’08

May

’09

Oct ’0

9

Mar

’10

Aug ’10

Jan ’11

Jun ’11

Nov

’11

Apr

’12

Sep ’12

Feb ’13

Jul ’1

3

Dec ’13


Palm

Looking at consumption growth trends in emerging economies like

India and China, the outlook for the palm oil industry is expected

to remain positive. With its growing population base, Indonesia has

become one of the largest consumers of palm oil together with China

and India. We also expect the higher biodiesel blending mandate of

10%, announced by Indonesia's government in September 2013,

to sustain domestic demand growth for palm oil products.

In terms of CPO production growth, we are well supported by younger

estates that have not reached peak maturity, and this represents

nearly 35% of our total oil palm planted area. We will continue to

expand our oil palm acreage by achieving 10,000 to 15,000 hectares

of new plantings annually to sustain production outputs.

Anticipating higher FFB production from immature plantings, we

are progressively increasing capacities by constructing new palm

oil mills. These include an 80MT/hour facility in South Sumatra in

end December 2013 and a 45MT/hour facility in East Kalimantan

scheduled for Q1 2014, and two 45MT/hour mills in Kalimantan

scheduled for 2015.

In 2013, we expanded an existing mill in West Kalimantan from

40 MT/hour to 80 MT/hour, while another mill in South Sumatra

is being upgraded from 40 MT/hour to 60 MT/hour by Q3 2014.

We are also constructing a PKO plant in Riau with a capacity of

150 MT/day scheduled for Q1 2014. The additional capacities,

coupled with their logistically advantageous locations, are in line

with the growth strategy for our cooking oil and margarine business.

Looking ahead, the Plantation Division aims to improve yields per

hectare and optimise labour costs through innovative agronomy.

This will entail conscientious efforts, such as the introduction

of SAP platform to all plantations in 2013 that have allowed the

Division to tap into real-time operational and agronomy data for

better plantation management and results. We will also develop

comprehensive and robust management systems to realise the

genetic potential of our premium seed material for different

breeding environments.

The Group continues to be guided by the Principles and Criteria

of the Roundtable of Sustainable Palm Oil (RSPO) in furthering

sustainable agriculture, as demonstrated by its North Sumatra

and Riau estates that achieved RSPO certifi cation for sustainable

palm oil.

Rubber

The long-term outlook for rubber remains upbeat, supported by

healthy demand from tyre-makers, automotive industries and rubber

goods manufacturers in developing markets. China in particular, will

continue to contribute to this demand, given its large population

and status as the world's largest natural rubber consumer.

2014 OUTLOOK


OVERVIEW

In 2008, the Division diversifi ed into sugar cane cultivation and

production in Indonesia as a key strategy for business expansion.

In Indonesia, our sugar investments are strengthened by domestic

shortfalls, coupled with positive drivers such as population growth,

a fl ourishing food and beverage sector, and the expansion of

sugar-based industries such as ethanol processing which utilises

molasses as a basic raw material.

Indonesia remains a net importer of sugar. Sugar prices in Indonesia

are relatively shielded from global fl uctuations by policies aimed

at protecting the local industry, and particularly the smallholder

farmers. Currently, the domestic sugar price in Indonesia is above

the international market due to restrictions on import quotas

when domestic prices fall below Rp8,100 per kg, a government-

mandated fl oor price that was introduced in May 2013.

The Group's sugar operations in Brazil and the Philippines are

covered in the next section.

2013 REVIEW

For the year in review, revenue contributions from the sale of sugar

and molasses rose 13% to Rp706 billion compared to Rp625 billion

in 2012. We expect this to improve with estate expansions and new

plantings, and when both our sugar mills and refi neries in South

Sumatra and Central Java are operating at full capacities.

PLANTATION REVIEW

SUGAR: INDONESIA

In South Sumatra, our 8,000 TCD sugar mill and refi nery in

Komering has an annual processing capacity of 1.44 million

tonnes. We harvested 758,000 tonnes of sugar cane from our

own estates in 2013 compared to 588,000 tonnes in 2012,

producing 53,200 tonnes of sugar. The acreage for planted

sugar cane in South Sumatra was 11,645 hectares in 2013

compared to 12,333 hectares in 2012. In addition, this sugar

refi nery also produced 15,700 tonnes of sugar from imported raw

sugar. Our sugar are bagged into 50kg packs and sold mainly to

the domestic market.

In Central Java, our newly upgraded 4,000 TCD sugar mill and

refi nery has an annual processing capacity of 720,000 tonnes.

In 2013, we processed 438,000 tonnes of sugar cane (versus

420,000 tonnes in 2012). We harvested the sugar cane from

5,600 hectares belonging to over 700 local farmers and a small

area of our own estates. Total sugar production was 28,000 tonnes

in 2013, compared to 31,000 tonnes in 2012.

We have a win-win strategy with the local smallholders in Central

Java by way of supply contracts − an arrangement where we offer

agricultural advice and credit for seed cane, planting costs and

fertiliser purchases with repayment being deducted from their

sales proceeds. As such, the Group's share of the sugar produced

was 9,400 tonnes in 2013 compared to 11,500 tonnes in 2012.


2014 OUTLOOK

In Indonesia, the sugar industry continues to be relatively robust

due to strong domestic demand. While sugar imports continue to

be the mainstay, intervention efforts from the government, aimed at

increasing the production capacity of sugar factories, enhancing the

productivity and yield of sugar cane and encouraging the expansion

of sugar cane plantations, have been positive for industry players.

In the year ahead, we expect to step-up our sugar cane planting

programme and production at our 8,000 TCD sugar factory in

South Sumatra to optimise our facilities and achieve the vertical

integration required for full-scale operations and growth.

We are also researching into the breeding of new generation seed

cane varieties to improve yields. Complemented by our large-

scale plantation management experience, we will progressively

streamline operations for higher outputs and profi tability.

MANUFACTURING PROCESSFOR SUGAR

CANE HANDLING& MILLING

JUICE CLARIFICATION& EVAPORATION

FILTER CAKE

SUGAR BOILING & CURING

SUGAR DRYING& HANDLING

FINISHED SUGAR PRODUCT END CUSTOMERS

BAGASSE

BOILER

FINAL MOLASSES

FINISHED SUGAR PRODUCT

Sugar Prices

US$ / tonne

CSCE No.11 (Raw Sugar) LIFFE No.5 (White Sugar)

900

800

700

600

500

400

300

200

100

0

Jan ’06

Jun ’06

Nov

’06

Apr

’07

Sep ’07

Feb ’08

Jul ’0

8

Dec ’08

May

’09

Oct ’0

9

Mar

’10

Aug ’10

Jan ’11

Jun ’11

Nov

’11

Apr

’12

Sep ’12

Feb ’13

Jul ’1

3

Dec ’13


EXPANDING INTO BRAZIL

Brazil is a leader in the global sugar and ethanol industry due to

its unique advantages such as high productivity levels, favourable

climate and the abundance of suitable land for future expansion.

Over the last 10 to 15 years, Brazil’s global sugar production and

exports have been steadily increasing, making the country the

world’s largest sugar producer and exporter today with a 40% to

50% share of the global sugar export market, as well as the lowest

cost producer due to its ideal growing conditions. In the long run,

production growth in Brazil is likely to be key growth in the overall

world sugar supply.

PLANTATION REVIEW

SUGAR: OUTSIDE INDONESIA


However, recent declines in global sugar prices had been driven

by physical sugar surpluses around the world. While Brazilian

sugar production has increased strongly due to its advantages,

aggregate growth in production for the rest of the world was slow

especially amidst volatilities and cyclical factors such as weather,

pests and diseases.

Global consumption in the season October 2012 to September

2013 grew at 2.7% this year from increased demand due to lower

prices. This translates to a global growth of 4.4 million tonnes. Asia

has been the dominant region of sugar consumption growth since

1985, and is projected to maintain a dominant share of the global

sugar import market with its growing population, rising incomes

and greater urbanisation.

ACQUIRING A 50% STAKE IN CMAA

IndoAgri announced the decision to expand into Brazil’s sugar and

ethanol industry, and to acquire a 50% stake in CMAA for a cash

consideration of BRL143.4 million (approximately US$66.6 million),

on 28 January 2013.

By offering access to 42,517 hectares of planted sugar cane

in Brazil, the acquisition has enabled IndoAgri to extend its

geographical presence into the sugar and ethanol industry in Brazil,

while strengthening its diversifi ed plantation business model.

Established in 2006, CMAA is principally engaged in the cultivation

and processing of sugar cane for the production and marketing of

ethanol and sugar, as well as co-generation of electric power from

sugar cane bagasse. It operates one modern, state-of-the-art sugar

mill in Vale do Tijuco, Brazil, with a total crushing capacity of 3 million

tonnes per year, expanding to 3.8 million tonnes in early 2014.

To structure the acquisition, the Group incorporated a wholly

owned subsidiary in Singapore, IFAR Brazil, which has in turn

incorporated a wholly owned subsidiary in Brazil, known as

IndoAgri Brazil. The acquisition of CMAA was completed on

25 June 2013, following which it has become a 50%-owned joint

venture entity under the Group.

World Sugar Production 2012/13

23% Brazil

15% India

9% EU

8% China

6% Thailand

4% US

4% Mexico

3% Russia

3% Pakistan

2% Australia

23% Others

PLANTATION REVIEW

SUGAR: OUTSIDE INDONESIA (Cont’d)

TOTAL

182.7million

tonnes


2013 REVIEW

In 2013, international sugar prices sustained

pressure from a sizeable global sugar production

surplus in 2012/13 and the global economic

slowdown. Sugar prices on the London International

Financial Futures and Options Exchange (LIFFE)

averaged at US$385 per tonne in 2013, down from

US$588 per tonne in 2012.

As at 31 December 2013, CMAA has a cane

planted area of 42,517 hectares, of which 49% is

company-owned while 51% belong to third parties.

In 2013, CMAA processed 3 million tonnes of

harvested sugar cane, producing 187,000 tonnes

of sugar, 137,000 tonnes of ethanol and 196,000

M3 of electricity.

Our 50% share of profi ts from CMAA for the period

of July to December amounted to Rp64billion

(approximately US$5 million)

The Group’s share of the contributions from RHI

will be accounted for from January 2014.

2014 OUTLOOK

As a Group, IndoAgri intends to tap into the

technology, know-how and knowledge that it has

gained from its investment in CMAA, and to apply

the advanced methodologies and operational

improvements across its plantations in Indonesia.

The Group will also continue to evaluate potential

acquisitions or joint ventures in a bid to expand its

operations in the international market.

Moving forward, we expect that the direction for

global sugar prices will be strongly infl uenced by

production levels in Brazil and India, together with

the Brazilian government policies on ethanol.

EXPANDING INTO PHILIPPINES

With 24.0 million tonnes of sugar cane production in 2012, the

Philippines’ sugar industry is the third largest in Southeast Asia after

Thailand (96.5 million tonnes) and Indonesia (26.3 million tonnes).

Around 80-85% of this production is used domestically. The

remaining 15-20% is exported, primarily to the United States,

which allocates a sugar quota for the Philippines, and to Japan.

The Philippines exports about 500,000 MT of raw sugar per year.

The Philippines currently implements an 18% tariff on all sugar

imports. From 2015, this tariff will decline to 5%. The tariff has

allowed domestic producers to sell sugar at a price that is 30-40%

more competitive than the wholesale price of imported sugar from

Thailand. When the tariff drops to 5%, Filipino sugar producers

will no longer have this advantage.

ACQUIRING A STAKE IN RHI

In December 2013, we further expanded our international

footprint following the investment of a 30% interest in FPNRL for

a cash consideration of US$17.4 million. FPNRL in turn has a

34% interest in RHI, the largest integrated sugar business in the

Philippines.

As the biggest sugar miller in the Philippines, RHI has a processing

capacity of 38,500 TCD, and supplies nearly one-fi fth of the country’s

total sugar production. It is also the third biggest sugar refi ner in

the Philippines with a capacity of 18,000 Lkg/day at its Batangas

refi nery (one Lkg is a unit of measurement equivalent to one 50-kg

bag of sugar). The company has three sugar mills, one in Batangas

and two in Negros Occidental. It also has an ethanol plant in Negros

Occidental with a production capacity of 100,000 litres/day.

Unit 2011/

2012

2012/

2013

YTD

Dec13

12 Mths 12 Mths 9 Mths

Planted Area Ha 24,907 37,909 42,517

Harvested Area Ha 19,647 22,546 31,627

Crushing ’000 MT 1,662 2,218 3,026

Production Volume:

VHP ’000 MT 77 152 187

Ethanol ’000 M3 93 96 137

Energy ’000 Mwh 72 123 196

Sales Volume:

VHP ’000 MT 77 151 156

Ethanol ’000 M3 93 91 110

Energy ’000 Mwh 72 123 196

Operational Highlights


OVERVIEW

Research and development (R&D) is a critical aspect of our

plantation operations. Through innovative R&D, we aim to

reduce production constraints, increase yield potentials and crop

resilience, while improving management practices. In many ways,

our success and competitiveness as a low-cost producer have

been borne out of R&D. As a key enabler, R&D enhances our

goals for environmental sustainability and maximises our profi ts

in the long run.

The Group’s R&D Activities Are Centred On Five Key Areas:

• Plant breeding: The development of top quality seed and

planting materials through traditional and advanced breeding

methods, a diverse germ-plasm base and biotechnology,

supported by fi eld trials that test progenies across a range of

planting environments.

PLANTATION REVIEW

R&D


• Soils: The detailing of soil survey maps that support site-

specifi c, agronomic block management.

• Agronomy: The evolvement of site-specifi c soil management

and crop cultivation techniques that provide our estates with

optimal recommendations on crop management and planting

densities, and block-by-block fertiliser and herbicide usage.

• Crop protection: The implementation of integrated pest

management with strong emphasis on biological pest control

systems to monitor, prevent and eradicate pests and diseases

that lead to crop losses.

• Field data capture, management and analysis: The

deployment of GPS ground surveys and remote sensing

technologies that enable timely and detailed 2D and 3D

topographic maps; as well as Geographic Information System

(GIS) tools that provide analysis and support for management

decision making and optimum plantation management. An

integrated software system provides visibility of data across

subsidiaries, refi neries and plantations on a daily basis.

Modern laboratories, comprehensive facilities and a strong R&D

heritage have equipped IndoAgri to perform extensive research

in plant breeding, tissue culture, soil science, soil and water

conservation, plant nutrition and biological crop protection,

entomology, and pathology. The aim is to continuously improve the

productivity of seed breeding and cultivation using methodological

frameworks for farming operations, ensuring best practices in

plantation management.

The Group has two advanced agricultural R&D centres: Sumatra

Bioscience (SumBio) in Bah Lias, North Sumatra, and PT SAIN in

Pekanbaru, Riau. SumBio is an established name and a sought-

after producer of premier oil palm seeds in Indonesia. Annually,

SumBio has a production capacity of 25 million superior and

high-yielding oil palm seeds. PT SAIN became a certifi ed seed

producer in 2011, and currently produces up to 8 million seeds

per year.

In terms of product development, we have an extensive R&D facility

dedicated to improving our range of cooking oils, margarine and

shortening products. For example, we leverage R&D to develop

specifi c formulations of edible oils catered to the requirements of

our industrial customers and retail consumers.


Our R&D Activities For Sustainability Cover:

• Fertilisers recommendations: Site-specifi c formulations are

prepared annually for each block on the basis of yield targets

and yield statistics, annual foliar analysis, soil characteristics,

established yield response curves from relevant fertiliser

trials and predicted nutrients release from soils and plant

residues, to maintain optimum palm nutrition and plantation

sustainability.

• Organic fertilisers: We optimise the use of mill effl uent and

by-products as organic fertilisers. In Riau, empty fruit bunches

(EFB) are utilised as soil mulch, while palm oil mill effl uent

(POME) are used in land application. This has reduced our

need for inorganic fertilisers by 14% annually. We are also

PLANTATION REVIEW

R&D (Cont’d)

moving towards the co-composting of EFB and POME, which

has the potential to replace up to 30% of inorganic fertiliser

use per year.

• Integrated pest management: Biological control agents have

helped us achieve effective pest and disease control. Barn

owls have been an effective rat-control measure in our Riau

estates, which has had a zero-rodenticide practice since

2001. Around 10,000 new birds are bred annually at 2,500

nest boxes distributed throughout the Riau estates. We have

introduced the use of barn owls to our South Sumatra estates

where around 1,800 new birds were bred in 2013. This in

turn will reduce rodenticide use across all plantations.


2013 REVIEW

Increased high-yield seed sales: The Group produced 26.5

million high-yielding oil palm seeds in 2013, a decrease over the

28.6 million seeds produced in 2012. Part of the high-yielding

seed material were for the Group’s new planting of 9,791 hectare

and replanting of 365 hectares during the year, which required

approximately 200 oil palm seeds per hectare of land. Most of

our high-quality seeds are sold to external parties, generating

additional revenue and profi tability for the Group. In 2013, sales

of oil palm seeds fell by 27% from 24.7 million to 18.1 million

seeds, as a result of the slowdown in new plantings.

Pest and disease control: In 2013, efforts to promote the use of

natural predators and biological agents were intensifi ed so as to

reduce the use of pesticides and our chemical footprint. To control

major leaf-eating caterpillars, we cultivated entomopathogenic

agents of viral origin that were sprayed across all estates. In addition

we continue to rear natural predators, such as barn owls, which

are released to critical areas as proven measures against pest and

rodent attacks.

On-time responsiveness: With the aid of aerial photography,

satellite technology and Geographic Information System (GIS) tools,

we were able to monitor plantation blocks and harness timely and

accurate information on the health condition of our crops and land/

water drainage characteristics in the estates. This has improved

resource and manpower deployment, and allowed us to prevent

rather than react to potential agronomic issues.

Improved processing: We leveraged R&D to enhance and develop

new products catering to different customer needs. For example,

a speciality fats simulation laboratory has enabled the Edible

Oils & Fats Division to improve the quality and consistency of its

products, and to develop specialty fat products for use in cakes,

bread, confectioneries and other bakery products. We are also

investing in new technology to develop new packaging materials

and designs to reduce costs.

2014 OUTLOOK

With greater affl uence, higher populations and a growing

dependency on palm oil and palm oil products, the demand

for premium, high-yielding seeds is likely to remain robust

supported by new plantings in 2014. Our seed breeding team will

continuously conduct trials aimed at identifying next generation of

proven parental genotypes.

In the year ahead, we will further intensify the use of bio-

control methods against major pests, streamline existing work

processes and strive towards higher mechanisation in order to

drive productivity. Supported by 3D maps, GPS technology and

aerial photography, we expect to further delineate the topographic

landforms of our estates in South Sumatra in relation to productivity

and soil and water management.

As we reap the results of best practices in plantation management,

we expect to improve yields and yield forecasts using statistical

methods, and enhance the monitoring of leaf production rates.

At the same time, an integrated, software system will offer

greater visibility of the fi eld data across all subsidiaries, refi neries

and plantations on a daily basis; while an Enterprise Resource

Planning system equips us with professional tools for managing

our diverse operations.

We will be developing further the use of unmanned aerial vehicles

for acquiring topographical visuals, as well as near infrared

(NIR) and IR photography of crop biomass and conditions. The

objective is to monitor and improve plant health status, and to

make estimates of leaf area for forecasting yields.

Detailed soil fertility mapping will help characterise physicochemical

properties across different breeding environments, enabling site-

specifi c fertility management to produce the maximum economic

crop response.

Other R&D enhancements in 2014 will involve disease management

as well as precision agronomy through improved strategies for crop

management, planting densities, fertiliser and herbicide usage. We

are confi dent that these initiatives will underscore higher and more

profi table yields per hectare, reduce production costs and maintain

a balance nutrient programme for sustainable growth. For our Edible

Oils & Fats Division, continued investment in R&D will ensure that our

products meet evolving customer requirements.


plantation review palm & rubber - listed...

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