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:-

(a) Expanding its planted area of oil palm

IndoAgri plans to continue expanding its planted oil palm area through the acquisition and development of additional plantation land. IndoAgri is optimistic that demand for palm oil will continue to rise in coming years driven by, inter alia, rising consumption in emerging economies like China and India as well as the use of palm oil in new applications like biofuels.

In general, developing oil palm plantations from raw land to a mature plantation requires approximately four years and to develop oil palm plantations (including the related palm oil mills) is estimated to require funding of about US$4,500 to US$5,500 per hectare.

(b) Expansion of production capacity

IndoAgri plans to expand its production capacity to cater for future increases in IndoAgri’s sales volume, to be funded through a combination of internal resources and bank borrowings. IndoAgri intends to construct a new refinery in the vicinity of the Jakarta port at a cost of approximately US$50 million, which is targeted to commence operations in Q4 2010. The new refinery is expected to have an annual refining capacity of approximately 420,000 MT. The new refinery is closer to Jakarta port. Hence, it is expected to lower IndoAgri's inland transportation costs.

(c) Maintaining its market position in Indonesia and growing its export sales

IndoAgri intends to maintain its leading position in the cooking oil, margarine and shortening segments in Indonesia through, inter alia, the following:-

1. continue to undertake various innovative marketing and promotion activities to maintain consumer loyalty for its leading brands such as "Bimoli";
   
   
2. development of new brands, new products and product extensions to meet changing consumer preferences and to create new market segments in which IndoAgri can have an advantage;
   
   
3. increase its technical expertise to improve the quality, consistency, shelf life and overall content of its products; and
   
   
4. expand its distribution network and logistical processes to achieve deeper market penetration and coverage.

Besides Indonesia, IndoAgri intends to increase its sales volumes in its existing overseas markets and develop new emerging markets such as Africa and the Middle East.To raise its competitiveness in this respect, IndoAgri intends to increase its market knowledge of the export countries by strengthening the export sales and marketing team, sourcing for credible distribution channels and promoting IndoAgri’s own brands in selected markets.

(d) Expansion into higher value added products

IndoAgri intends to broaden its product range to include more higher value-added products, catering in particular to the high-end market which generally carry higher profit margins, such as those which emphasise attributes like health benefits and modern lifestyle. Such products are complementary to IndoAgri’s product range as IndoAgri’s processing facilities are capable of producing them.

(e) Optimise operating efficiency and productivity

IndoAgri intends to continue enhancing the level of integration in its operations and improving on its cultivation, production, marketing and logistical processes so as to achieve greater cost efficiencies, productivity, economies of scale and effective service delivery. These include investment in information technology to enhance the pace and accuracy of information gathering, processing and dissemination throughout the organisation. IndoAgri also intends to raise the standard of managerial and technical skills as well as staff productivity throughout the organisation by focusing on leadership and staff training. IndoAgri intends to decrease its energy costs by replacing its diesel boilers at its Surabaya and Bitung refineries with coal boilers.