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INDOFOOD AGRI RESOURCES LTD
ANNUAL REPORT 2014
The Plantation Division’s
domestic sugar operations
are located in South Sumatra
and Central Java. Our sugar
investments are strengthened
by domestic shortfalls,
coupled with positive drivers
such as population growth
and an expanding food and
beverage sector.
To protect the local sugar
producers, especially the
smallholders, the Indonesian
government has put in
place policies to shield
sugar prices from global
fluctuations. Currently, the
domestic sugar price in
Indonesia lies above the
international market, as there
are restrictions on import
quotas when domestic prices
fall below Rp8,500 per
kilogramme – a government-
mandated floor price
introduced in August 2014.
PLANTATION REVIEW
SUGAR: INDONESIA
2014 REVIEW
In South Sumatra, the Division has an
8,000 TCD sugar mill and refinery with
an annual processing capacity of 1.44
million tonnes. In 2014, we harvested
701,000 tonnes of sugar cane from our
own estates and produced 53,500 tonnes
of sugar, compared to 758,000 tonnes
and 53,200 tonnes in 2013 respectively.
In July 2014, the Division acquired
a 100% stake in PT MLI, a company
principally engaged in the cultivation of
sugar cane in South Sumatra. Including
the additional 3,800 hectares of land
from this acquisition. The Group’s total
planted sugar cane area in South Sumatra
expanded to 13,062 hectares in 2014,
compared to 11,645 hectares in 2013.
In Central Java, the Division has a 4,000
TCD sugar mill and refinery with an annual
processing capacity of 720,000 tonnes.
There is also an existing arrangement
with local smallholders who supply to
the mill to provide them with agricultural
advice and credit for seed cane, planting
costs and fertiliser purchase, with
repayment being deducted from their
sales proceeds.
In 2014, we processed 452,000 tonnes
of sugar cane, versus 438,000 tonnes in
2013. The sugar cane came from 7,260
hectares of sugar estates belonging
to 700
-
over local farmers and a small
area owned by the Division. Total sugar
production was 34,000 tonnes in 2014,
compared to 28,000 tonnes in 2013.
The Group’s share of this production was
13,000 tonnes in 2014, compared to
9,400 tonnes in 2013.
For the year in review, revenue
contributions from the sale of sugar
and molasses declined 14% to Rp604
billion, contributing to 6% of the
Plantation Division’s revenue.
