The Jakarta Post
Palm oil heavyweight Asian Agri (AAG), through its flagship company PT Inti Indosawit Subur, expects crude palm oil (CPO) production to remain at around 1 million tons next year as the company focuses on increasing productivity in existing plantations rather than expanding plantation areas.
AAG general manager Freddy Widjaja said recently that the firm would spend up to Rp 200 billion (US$ 17.08 million) next year to revitalize around 7,000 hectares (ha) of its total 104,716 ha of plantations.
'We won't be expanding; we're focused on improving our productivity through intensification. In 2015, we plan to revitalize 5,000 ha from our nucleus [main] plantation and around 1,000 to 1,200 ha of concessions managed in partnership with our smallholders, all for optimum results,' Freddy told reporters during a dinner meeting in Jakarta late on Wednesday.
Freddy said he was not expecting to increase productivity beyond 1 million tons per year, barring further regulations on revitalization.
He said that the replanting process was underway, with around 30 percent of the company's concessions having already undergone revitalization. 'In 2014 we've managed to replant in 4,000 ha,'
AAG currently oversees operations in Riau, Jambi and North Sumatra, running 28 oil palm plantations, 19 palm oil mills and one sustainably certified palm kernel mill. Production is shared among the firm's nucleus facilities with a 50 percent stake and plasma shareholders with 41 percent, while the remainder is held by independent farmers.
Freddy said that by the end of this year, Asian Agri would have added 10,000 ha managed by smallholders, with 5,000 ha more planned over the next two years.
In addition to the replanting efforts, Freddy said the company was looking to have most of AAG's concessions certified under the Indonesian sustainable palm oil (ISPO) and the roundtable for sustainable palm oil (RSPO) standards by next year.
'We're aiming to get all our plasma concessions RSPO-certified by next year, and have 60,000 ha independently managed land certified and brought under a partnership scheme by 2020,' said Freddy, adding that AAG's nucleus concessions would be RSPO- and ISPO-certified by the end of this year.
He revealed that around 75 percent of his firm's smallholder concessions, approximately 42,000 ha, were already RSPO-certified, and that the rest would follow suit next year.
AAG has already certified 100 percent of its landbank according to the International Sustainability and Carbon Certification (ISCC) standard.
In total, Freddy said he expected AAG to produce 700,000 tons of certified sustainable palm oil from both main and smallholder concessions by 2015. Sustainable certification ensured that the company would always have a market, he said.
Freddy concluded by saying that the firm would seek further entry into the South Asian market. 'We're going to enter Pakistan,' he said, without going into detail.