Oil Palm Plantations
The oil palm plantation managed by the Company until the end of December 2015, covered an area of 297,862 hectares consisting of 235,432 of nucleus plantation and 62,430 hectares or 21.0% of plasma plantation (KKPA). Along with other enterprises in the Indonesian palm oil industry, the Company is also facing the same constraints of limited availability of space for expansion.
Our plantations are spread over three islands in which 46.7% in Kalimantan, 35.8% in Sumatra and 17.5% in Sulawesi. Currently 86.8% of the total 297,862 hectares are mature plantations.
In a situation with limited expansion possibilities, our only alternative is to improve productivity in order to keep the business growing. In this respect, the Company is implementing an end-to-end mechanization program, starting from fertilizing, in-field activities, up to the transportation of the fruit. Mechanization in fertilizing has effectively improved the use of fertilizers and in-field mechanization combined with transportation ensures the effectiveness in harvesting and shipping the FFB to the palm oil mill.
On the matter of sustainability, the Company management has met all aspects of sustainability and complies with all laws and regulations applicable in Indonesia. To ensure that all our palm oil products meet the sustainability aspects, by the end of 2015 the Company has obtained 16 ISPO (Indonesian Sustainable Palm Oil) certificates, while the others are currently having their ISPO certification processed.
The prolonged dry season of 2015 has inevitably affected production at a number of our plantations. Fortunately, however, the intensification program introduced several years ago was able to improve the production of FFB in 2015, which showed an improvement compared to the year before. The year 2015 showed an FFB production of 5.60 million tons, equivalent to an increase of 0.7% compared to 5.56 million tons in 2014. The Company’s FFB is processed into crude palm oil and palm kernel oil and their derivative products such as RBDPO, Olein, Stearin and PFAD. Our CPO production reached 1.74 million tons in 2015. While production of derivative products reached 24.93 thousand tons of RBDPO, 428.72 thousand tons of Olein, 114.17 thousand tons of Stearin and 27.64 thousand tons of PFAD.