Our plantations are strategically located in the Riau, East and West Kalimantan provinces of Indonesia. With more than 200,000 hectares of oil palm plantations, we occupy a leading position in the Indonesian oil palm industry.


We adopt industry best-practices when developing new oil palm plantations. Our palm oil seeds are produced in our dedicated seed garden. These seedlings are first cultivated in pre-nurseries and subsequently transferred to main nurseries after three months. Delicate care and utmost attention is given to our palm seedlings in the nurseries because we are acutely aware of their significance in determining our plantation yields for the next 25 years of commercial production. Only seedlings with excellent conditions are transferred to the field for planting. As a result of the stringent culling process, out of approximately 200 seeds purchased for each hectare at the nursery stage, only around 150 are eventually utilised in plantings.


Once planted in the fields, the palms undergo an intensive upkeep programme for the first three years when they are still classified as immature palms. We treat our work done in these first three years as the most critical as we believe it sets the basis for healthy and productive palms. Weeding and fertilisation cycles are more frequent than for mature palms. Collection roads, harvesters' path, box culverts and other infrastructure are also programmed in anticipation of the start of harvesting. By the 20th month, the palms will begin to flower. At this point, we undertake a castration exercise to remove the flower and to prevent fruiting. This is because the first round of fruiting will produce very small fruit bunches that not commercially acceptable, and in doing so it also has the effect of increasing the subsequent average fruit bunch weight by preserving nutrient utilisation. As early as the 30th month, we start to harvest the young palms even though they are technically still 'immature'.


When oil palms are mature, the upkeep programme undertaken is largely similar. However, the frequencies for some upkeep work tend to be reduced as the palms age. Our group research station provides us with agronomy recommendations based on trials and tests done. For example, rather than relying on a 'one-size-fits-all' fertiliser recommendation, each 25-30 hectare block of oil palm trees is tested for the nutrient content in their leaves every year in order to come up with the most optimal and cost efficient fertiliser mix. We efficiently utilise our labour in the plantations by shifting harvesters to upkeep work during low-crop season and vice versa.


The ripeness of fresh fruit bunches (FFB) harvested is critical in maximising the quality and quantity of palm oil extraction. We harvest the FFB of the oil palm trees only when an appropriate quantity of fruitlets become detached from the FFB, indicating peak ripeness. The Group's FFB blended yield per mature hectare for FY2016 came in at 16.8 tonnes.


All our mills are strategically located within close proximity of our plantations to ensure that our FFBs arrive at our mills within 24 hours after harvesting for milling. This also helps to reduce transportation costs from plantation to mill, and to ensure that our FFB arrive in time at our mills with minimal spoilage and maximum quality standards.


FFBs are sterilised by applying high-pressure steam, to deactivate the enzymes in the palm fruits and to separate the fruitlets from the palm bunches. After the steaming process, the palm fruitlets are crushed in a pressing machine to obtain crude palm oil and palm kernel. Waste and water are then cleared and separated from the CPO by means of a centrifuge. The empty fruit bunches and waste effluent arising from the process are used as fertilisers in the plantations.


In FY2016, our mills produced 634,941 tonnes of CPO with an average CPO extraction rate of 22.5% and average PK extraction rate of 5.3%. We will continue to monitor our milling capacity to ensure that we can accommodate expected increases in FFB production from our plantations.

 
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