PLANTATION REVIEW PALM & RUBBER

Transcription

1 PLANTATION REVIEW PALM & RUBBER 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 specific 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 efficiency and reduce costs. Utilising organic fertilisers and all by-products while reducing reliance on inorganic fertilisers 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. 20 INDOFOOD AGRI RESOURCES LTD ANNUAL REPORT 2013

2 CPO vs Soy Oil Price US$ / tonne 1,800 1,600 1,400 1,200 1, Jan 06 Jun 06 Nov 06 Apr 07 Sep 07 Feb 08 Jul 08 Dec 08 May 09 Oct 09 Mar 10 Aug 10 Jan 11 Jun 11 Nov 11 Apr 12 Sep 12 Feb 13 Jul 13 Dec ,921 Ha 150,076 Ha 89,845 Ha 10% 23% 31% 42% Soy Oil Premium Over CPO CPO (CIF Rotterdam) Oil Palm Plantation Age Profile 28% Soy Oil (CIF Rotterdam) 64% 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 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 Correspondingly, CPO production declined by 8% from 880,000 tonnes in 2012 to 810,000 tonnes in 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. 9% 26% 9% 32% 9% 17% 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. Group SIMP Lonsum > Immature > 4-6 years > 7-20 years > 20 years INDOFOOD AGRI RESOURCES LTD ANNUAL REPORT

3 PLANTATION REVIEW PALM & RUBBER (Cont d) FFB Production (Nuclues) 000 mt CPO Production 000 mt 3,000 2,500 2,613 2,564 2,797 2,973 2,895 1, , , , 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$3,384 a year ago. The declining prices have also affected rubber sales and earnings at Lonsum, the subsidiary owning most of our rubber estates. Sheet rubber, crumb rubber and cup lump remain the Division s key rubber products. Notwithstanding, growth in rubber production for 2013 was flat at 18,500 tonnes due to holdbacks on land expansion and some replanting activities. Rubber Prices US$ / 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 08 Dec 08 May 09 Oct 09 Mar 10 Aug 10 Jan 11 Jun 11 Nov 11 Apr 12 Sep 12 Feb 13 Jul 13 Dec 13 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. RSS3 (Sheet) TSR20 (Block Form) 22 INDOFOOD AGRI RESOURCES LTD ANNUAL REPORT 2013

4 2014 OUTLOOK 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 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 Q We are also constructing a PKO plant in Riau with a capacity of 150 MT/day scheduled for Q 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. INDOFOOD AGRI RESOURCES LTD ANNUAL REPORT

5 PLANTATION REVIEW SUGAR: INDONESIA 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 fluctuations 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 governmentmandated floor price that was introduced in May The Group's sugar operations in Brazil and the Philippines are covered in the next section 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 We expect this to improve with estate expansions and new plantings, and when both our sugar mills and refineries in South Sumatra and Central Java are operating at full capacities. 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 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 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 INDOFOOD AGRI RESOURCES LTD ANNUAL REPORT 2013

6 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 largescale plantation management experience, we will progressively streamline operations for higher outputs and profi tability. Sugar Prices US$ / tonne Jan 06 Jun 06 Nov 06 Apr 07 Sep 07 Feb 08 Jul 08 Dec 08 May 09 Oct 09 Mar 10 Aug 10 Jan 11 Jun 11 Nov 11 Apr 12 Sep 12 Feb 13 Jul 13 Dec 13 CSCE No.11 (Raw Sugar) LIFFE No.5 (White Sugar) MANUFACTURING PROCESS FOR SUGAR CANE HANDLING & MILLING BAGASSE BOILER FILTER CAKE JUICE CLARIFICATION & EVAPORATION SUGAR BOILING & CURING FINAL MOLASSES SUGAR DRYING & HANDLING FINISHED SUGAR PRODUCT END CUSTOMERS INDOFOOD AGRI RESOURCES LTD ANNUAL REPORT

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8 PLANTATION REVIEW SUGAR: OUTSIDE INDONESIA 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. INDOFOOD AGRI RESOURCES LTD ANNUAL REPORT

9 PLANTATION REVIEW SUGAR: OUTSIDE INDONESIA (Cont d) World Sugar Production 2012/13 TOTAL million tonnes 23% Brazil 15% India 9% EU 8% China 6% Thailand 4% US 4% Mexico 3% Russia 3% Pakistan 2% Australia 23% Others 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 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 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. 28 INDOFOOD AGRI RESOURCES LTD ANNUAL REPORT 2013

10 Operational Highlights Unit 2011/ 2012/ 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 Ethanol 000 M Energy 000 Mwh Sales Volume: VHP 000 MT Ethanol 000 M Energy 000 Mwh 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-fifth of the country s total sugar production. It is also the third biggest sugar refiner in the Philippines with a capacity of 18,000 Lkg/day at its Batangas refinery (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 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 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 M 3 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 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 influenced by production levels in Brazil and India, together with the Brazilian government policies on ethanol. INDOFOOD AGRI RESOURCES LTD ANNUAL REPORT

11 PLANTATION REVIEW R&D 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. 30 INDOFOOD AGRI RESOURCES LTD ANNUAL REPORT 2013

12 Soils: The detailing of soil survey maps that support sitespecifi 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 soughtafter 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. INDOFOOD AGRI RESOURCES LTD ANNUAL REPORT

13 PLANTATION REVIEW R&D (Cont d) 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 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 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 This in turn will reduce rodenticide use across all plantations. 32 INDOFOOD AGRI RESOURCES LTD ANNUAL REPORT 2013

14 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 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 intensified 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 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 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 biocontrol 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 sitespecific 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 confident that these initiatives will underscore higher and more profitable 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. INDOFOOD AGRI RESOURCES LTD ANNUAL REPORT