The Group’s strategy is to maintain steady expansion of its majority-owned Indonesian palm-oil areas in a sustainable and cost-effective manner.
During 2022, the Group continued to execute its principal activity, being the responsible ownership, management and development of sustainable oil-palm estates in Indonesia.
Alongside its own projects, the Group also manages and develops scheme-smallholder areas attached to those estates. The Group’s objective is to continue increasing both its own crop and that from its scheme smallholders, whilst also increasing its own milling capacity, thereby increasing its output of certified sustainable palm oil. As Group areas mature, its strategy is to increase the planted hectarage controlled by it. Milling its own crop and that of its scheme smallholders in its own mills enables the Group to deploy its operational expertise to greatest effect with the aim of generating stronger returns, allowing shareholders to receive sustained increases in dividends.
majority-held hectares during 2022.
The planted area of the Group’s majority-held Indonesian estates increased during 2022 to 40,200 hectares, as planting continued at Musi Rawas in South Sumatra.
All planting is supervised by the Group’s sustainability team, and takes place in full compliance with RSPO standards, ensuring no deforestation and that only land suitable for cultivation is developed.
The total planted area at Musi Rawas, including that planted on behalf of the Group’s associated scheme smallholders, was 9,600 hectares.
Management are confident that the initial target of a total of 10,000 planted hectares will be exceeded during the course of 2023.
Scheme-smallholder areas associated with Group estates expanded in the year to 13,900 hectares. This followed a significant project promoted by the Group in northern Sumatra to attract independent smallholders to join new co-operative schemes. Under these schemes, the Group is providing initial funding for replanting, and crop from the newly planted areas close to Pangkatan will become a valuable new source of input to the Group’s mill there. By the end of 2022, 1,100 planted hectares had been added as part of the new co-operative arrangements.
Following the year end, the Group has been successful in acquiring an additional 2,100 planted hectares close to its estate at Simpang Kiri in Aceh Province in northern Sumatra. This is in line with the Group’s stated strategy of continuing to increase its planted area through the acquisition of further hectarage, initially within the vicinity of its existing projects. After taking these additional hectares into consideration, the Group now has, in conjunction with its associated scheme smallholders, a total planted hectarage of 56,200 hectares.
After the acquisition at Simpang Kiri, the Group remains committed to its growth strategy, and a number of further projects remain under review.
The Group had five palm-oil mills operating throughout the year and was able to raise the proportion of crop processed in its own efficiently and sustainably run facilities. This will increase further in 2023 as the Group’s sixth mill opened just after the year end at Musi Rawas. In addition, following the acquisition of further hectarage close to Simpang Kiri referred to above, the Group will review plans to build a mill there. If constructed, the Group would then achieve 100% ‘in-house’ processing of its own crop, and the output from that crop would all qualify as certified sustainable CPO.
As part of its commitment to responsible operation and development, the Group has continued to support the well-being of its workforce across Indonesia.
Further investment has been made during the year in estate development including new and upgraded housing, more school places and more teachers, and additional recreational and community facilities on site. The Group is also seeking to increase the hectarage within its estates that is specifically designated for conservation, and is expanding its sustainability team to support this effort.
Maps and locations
See where our plantations are located in Indonesia.
The Group demonstrates its commitment to sustainability through its membership of the Roundtable on Sustainable Palm Oil (“RSPO”).
Why invest in M.P. Evans?
A gathering acceleration in crop growth underpins our commitment to pay attractive returns to investors through increasing dividends.