Our principal activity is the production of crude palm oil through the ownership, management and development of sustainable oil-palm estates in Indonesia. Our strategy is to maintain steady expansion of palm-oil production and hectarage in a sustainable and cost-effective manner.
The Group’s strategy is to expand its production and maintain a steady rate of growth in planted hectarage controlled by it. The Group deploys its operational expertise with the aim of generating substantial returns to shareholders through a sustained increase in dividends as a result of anticipated significant crops and production.
In accordance with the Group's strategy, the Group has changed the nature of its palm-oil holdings. During 2016, the Group reached agreement to sell its share of the three-way Agro Muko joint venture, a mature 19,100 hectare Indonesian plantation project. In December 2017, the Group completed the purchase of PT Bumi Mas Agro ("BMA"). BMA is on the east coast of Kalimantan and comprises almost 9,000 planted hectares, including smallholders. The young age profile of BMA's existing planting underpins the Group's intention to produce increasing volumes of crude palm oil and palm kernels.
In 2019, the Group acquired additional shares in its Indonesian operating subsidiaries from a minority partner, increasing ownership of its oil-palm estates at an attractive price. In September 2020, the Group commissioned its fourth oil-palm mill, in line with its strategy of expanding productive capacity to enable it to process its growing crop.
We are constantly evaluating opportunities to acquire pieces of land suitable for sustainable oil-palm development located near our existing estates. The Group seeks to bring its operating units to what the board considers an optimal size of 10,000 hectares with a palm‐oil mill. The Group seeks continually to maintain and, where possible, improve agronomic standards and productivity on its estates with a view to increasing crops of fresh fruit bunches and production of crude palm oil.
The Group has confidence in both the palm-oil sector and Indonesia as an area of operation to provide a basis for successfully delivering its strategy.