The objective of IndoAgri is to continue expanding its business by building on its position as one of Indonesia's major vertically-integrated agribusiness groups. IndoAgri aims to achieve this objective by focusing on the following key strategies:-
We plan to increase our planted oil palm area by approximately 10,000 to 15,000 hectares per year for the foreseeable future. In general, developing oil palm plantations from raw land to a mature plantation requires approximately four years. We expect that demand for palm oil will be driven by, among other things, rising consumption in India and China. We have also diversified into sugar cultivation, plantation and production, capitalizing on the shortfall in domestic production of sugar, increasing population growth and continued development of processed food and beverages industries and expansion of sugar based industries in Indonesia. We intend to continue to expand our sugar planting to achieve an aggregate targeted planted area of 18,000 hectares in order to fully utilise our 8,000 TCD ("tonnes cane per day") sugar mill and refinery in South Sumatra with an annual capacity of 1.44 million tonnes.
We are expanding our CPO production capacity by constructing four oil palm mills, of which two mills will be completed in 2013, one in South Sumatra and one in Kalimantan. In addition, we intend to expand two existing mills in 2013. We plan for these mill expansions to serve our estates in the areas, thus allowing our FFB to preserve its freshness and reducing our transportation costs by eliminating the need to use third party mills. The Group also intends to build a 200 tonnes per day palm kernel plant in Riau in 2013.
We intend to further enhance our supply chain through the construction of a new bulking station in East Kalimantan with a storage capacity of 5,000 tonne.
Our expansion plans will be supported by ongoing efforts in best agronomy and crop protection practices. These initiatives will ensure that we continually focus on yield maximization of all our crops on a block-by-block basis. These efforts involve:
- Conducting detailed block-by-block analyses to provide our estates with the best recommendations on crop management and planting densities, fertilizer and herbicide usage, as well as predictions on yields and oil extraction rates.
- Creating optimal crop management and harvesting practices to maximize collection of FFB;
- Optimizing biological methods to improve pest and palm tree disease control.
- Pursuing mechanization at our plantations to increase efficiency and reduce costs.
- Fully exploiting the use of organic fertilizers and all by-products while reducing reliance on inorganic fertilizers.
With innovative agronomy and cultivation methods, we aim to continuously improve yields per hectare while reducing labor costs. In 2012, the Division produced approximately 248,000 tonnes of sustainable palm oil conforming to RSPO principles and criteria, underscore our continued commitment to sustainable agriculture.
We will continue to strengthen the brand identity of our products and promote customer loyalty through improved quality and better product packaging. For example, we are currently in the process of re-launching our core brands, "Bimoli" and "Bimoli Spesial", by introducing new bottle and pouch-packaging designs. We rely on focused advertising and promotional activities to raise awareness and brand image. We intend to increase our product visibility by deeper penetration of distribution of our products as well as improved after-sales services. In addition, we strategically focus our branded products to both modern trade and traditional market with new packaging and brand positioning.
Over the years, we have been increasing the volume of internal CPO supplies for the production of cooking oil, margarine and shortening. In line with our cost objective, this is to minimize reliance on third-party purchases and suppliers by ensuring that we can meet the CPO requirements of our own refinery facilities.