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Progress Report on Yield Improvement Policy Implementation

Posted: Jul 23, 2014 2 minute read GAR 0 Likes

Progress Report on Yield Improvement Policy Implementation

1. Introduction

Golden Agri-Resources Ltd (“GAR”) launched a Yield Improvement Policy (“YIP”) on 15 February 2012.The YIP is jointly developed with The Forest Trust (“TFT”) with inputs from stakeholders like Greenpeace, and applies to GAR’s total cultivated area including smallholdings.

The YIP is part of GAR’s holistic approach to sustainability, which includes the Forest Conservation Policy (“FCP”) and a Social and Community Engagement Policy (“SCEP”) launched in February and November 2011 respectively.

The policy leverages technology and innovation to improve crude palm oil (“CPO”) yield. Increasing productivity enables GAR to produce more palm oil from less land, hence reducing the impact of the palm oil industry on the environment. Higher yields also help improve the livelihoods of smallholders and at the same time alleviate the pressure to open new land.

Under the policy, the Company aims to achieve by 2015 an average CPO yield of 5.8 tonnes per hectare from oil palm trees in the prime age of 7-18 years. This is a 12% increase from the 2010 level.

Chart 1: GAR CPO yield target for oil palm trees in prime age stage

2010 (Actual) 2015 (Target)
Nucleus 5.2 5.8
Plasma 5.0 5.6
Average 5.2 5.8

GAR is committed to taking a multi-stakeholder approach toward developing and implementing the YIP.This will include ongoing consultations with the Government of Indonesia, palm oil associations, academics, research institutions, civil society organisations, key players in the Indonesian palm oil industry and local stakeholders. The consultations are aimed at providing a platform for all stakeholders to share experiences and challenges with regards to increasing productivity in the palm oil industry in order to move the industry forward in sustainable palm oil production.

2. Key performance areas

For our first progress report on the YIP, we are evaluating and reporting our performance against the policy in the following areas:

2.1 CPO yield

  1. Average CPO yield for GAR
  2. Average CPO yield for smallholders
  3. Average CPO yield for oil palm trees in prime age stage

2.2 Planting material

  1. Conventional breeding
  2. Tissue cultureBiotechnolog
  3. Biotechnology

2.3 Soil fertility and mineral nutrition management

  1. Organic fertilisers
  2. Chemical fertiliser

2.4 Pesticide use and natural pest control

  1. Biopesticides
  2. Chemical pesticide

3. CPO Yield

The policy builds on our early success of improving yield, which has been consistently above the Indonesian industry average for many years.

3.1 Average CPO yield for GAR
GAR has been leading the industry in palm oil productivity.
In 2012, GAR achieved record production of fresh fruit bunches (“FFB”), with an average CPO yield of
5.26 tonnes per hectare. This strong performance was supported by favourable weather conditions and
expansion of mature areas. Production in 2013 was impacted by the palm tree’s biological cycle
following the bumper crop in 2012 and dry weather in certain areas of our plantations.

Chart 2: GAR CPO yield compared to the Indonesian industry (tonnes/ha)

Year 2010 2011 2012 2013
GAR 4.70 5.02 5.26 4.76
Indonesian Industry1 3.88 3.94 4.05 4.01

1Source: Oil World Annual 2014. ISTA Mielke GmbH, Germany

3.2 Average CPO yield for smallholders
Our ongoing collaboration with smallholders has been successful.
In 2012, the CPO yield of our smallholders reached a record 5.51 tonnes per hectare.
Chart 3: GAR smallholder CPO yield compared to the Indonesian smallholder average (tonnes/ha)

Year 2010 2011 2012 2013
GAR smallholders 4.92 5.42 5.51 4.65
Indonesian smallholders1 3.33 3.29 3.24 3.292

1Source: Indonesian Palm Oil in Numbers 2013, Indonesian Palm Oil Commission
2Preliminary figure

3.3 Average CPO yield for oil palm trees in prime age stage
In 2012, the yield of oil palm trees in prime age reached an average of 6.06 tonnes per hectare,
exceeding our 2015 target of 5.80 tonnes per hectare by 4%. The yield decreased to 5.58 tonnes per
hectare in line with the lower FFB production in 2013 as mentioned in section 3.1.

Chart 4: GAR CPO yield for oil palm trees in prime age (tonnes/ha)

Year 2010 2011 2012 2013 2015 (Target)
Nucleus 5.23 5.62 6.21 5.58 5.80
Plasma 5.02 5.54 5.71 4.78 5.60
Average 5.16 5.60 6.06 5.36 5.80

Download the full report

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