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) Expand the planted area of oil palm and sugar through new plantings

We plan to increase our planted oil palm area by approximately 15,000 to 20,000 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 by the end of 2012.

(b) Expand our production capacity

We increased our CPO production capacity by commencing operations at two palm oil processing mills in Kalimantan each with a capacity of 45 tonnes per hour in 2009. In December 2010, we completed the construction of our new refinery in Jakarta, which has boosted our annual refining capacity by 420,000 tonnes and further enhanced our specialty fats capability and output levels while reducing operating costs. We intend to further expand our production capacity by constructing two palm oil processing mills each with a capacity of 40 tonnes of FFB per hour in West Kalimantan and South Sumatra, which are expected to be completed by 2012. We plan for these new mills to serve our estates in the area, thus allowing our FFB to preserve its freshness and reducing our transportation costs by eliminating the need to use third party mills. We completed the expansion of our fractionation capacity at our Surabaya refinery by 90,000 tonnes per year in February 2011 and we are planning to construct margarine, bottling, warehousing as well as research and development facilities at our new refinery in Jakarta, which we expect to be completed by the end of 2011. The completion of our 8,000 TCD sugar refinery in South Sumatra in 2011 is also expected to increase our sugar cane production capacity and enable us to achieve the vertical integration beneficial for full scale operations and growth.

(c) Continue to enhance our agronomy practices

We intend to continue to further our efforts in agronomy and crop protection in order to develop comprehensive and robust management systems that can realize the genetic potential of our seeds in different breeding environments. These efforts involve:

1. detailed analyses that provide our estates with optimal recommendations on crop management and planting densities, fertilizer and herbicide usage, as well as predictions on yields and oil extraction rates;
   
   
2. creating optimal crop management and harvesting practices to maximize collection of FFB;
   
   
3. optimizing biological methods of pest and palm tree disease control;
   
   
4. pursuing mechanization at our plantations; and
   
   
5. the usage of organic fertilizers.

With innovative agronomy, we aim to improve yields per hectare while reducing labor costs. Our commitment to sustainable agriculture has further enhanced our North Sumatra estates which achieved RSPO certifications for sustainable palm oil.

(d) Implement comprehensive marketing strategy to strengthen brand recognition and loyalty for our edible oils and fats products

We are focused on strengthening brand identity of our products and brand loyalty among our customers through enhanced product packaging and quality. We are currently in the process of rebranding and relaunching our core brands, “Bimoli”and “Bimoli Spesial”. We also introduced a new bottle design and re-designed the pouch packaging for our “Bimoli Spesial” brand. 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 on high-end outlets to take advantage of their rapid growth in Indonesia.

(e) Achieve self sufficiency in CPO to ensure consistent supply to production facilities

In recent years we have sourced an increasing proportion of our CPO requirements in our production of cooking oil, margarine and shortening internally. We seek to couple our expansion plans for planted area with implementation of agronomic practices to ensure that we are able to meet the total requirement of CPO for our production facilities from our own plantations, which we believe will decrease our production costs for cooking oil, margarine and shortening as we will be less reliant on third party purchases.