april 2016 - listed companyindofoodagri.listedcompany.com/misc/sr15presentation.pdf · end 2016 73%...

2016 Sustainability ReportApril 2016

Integrated Agribusiness with Leading Brands

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Presentation Outline

Business OverviewBusiness Overview

Sustainability Statement & Approach Sustainability Statement & Approach

Sustainability Commitment & PerformanceSustainability Commitment & Performance

Appendix: Managing Our Material Issues Appendix: Managing Our Material Issues


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Business Overview


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Capturing Value Across The Entire Supply Chain

Integrated and Diversified Agribusiness

Diversified cropsIndonesia: Oil Palm: 246,359 hectares.

Indonesia: Sugar Cane: 13,358 hectaresBrazil: Sugar Cane: 52,843 hectares

Indonesia: Rubber: 21,338 hectares

Indonesia: Other crops: 19,578 hectares

Leading market share in branded cooking oil and margarine markets in Indonesia

Strong sales and marketing expertise and extensive distribution network, serving ~370,000

retail outlets in Indonesia

Leverage on PT Indofood Sukses Makmur Tbk’s(PT ISM) 1,100 stock points

5 refineries with annual capacity of 1.4 million tonnes

Annual Production CapacityIndonesia: 24 palm oil mills

FFB: 6.4 million tonnes

Indonesia: 2 sugar mills/refineriesCane crushing: 2.2 million tonnes

Brazil: 1 sugar mill/refineryCane crushing: 3.8 million tonnes

Indonesia: 4 crumb/3 sheetrubber factories

Indonesia: 1 cocoa/1 tea mill

33 million oil palm seeds p.a.

Develops sugar varieties


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Geographical Presence

Unit FFB Unit Dry Rubber Unit Unit Sugar Cane Unit CPOSIMP 13 4,023,000 - - - - 2 2,160,000 5 1,425,000Lonsum 11 2,403,000 4 42,720 3 11,100 - - - -CMAA - Brazil - - - - - - 1 3,800,000 - -Group 24 6,426,000 4 42,720 3 11,100 3 5,960,000 5 1,425,000

RefineryProcessing

Capacity p.a. in MT

Palm Oil MillCrumb Rubber

FacilitySheet Rubber

FacilitySugar Mill &

Refinery


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Key Sustainability Milestones


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Sustainability Statement & Approach


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Our strategic approach to sustainability and responsible agribusiness is to establish the material issues, set effective targets and manage the operations according to recognised sustainability standards.

We identify and manage our material sustainability issues through these key areas:- Governance and integrity Environmental performance Sustainable palm oil sourcing Sustanable products People and communities

We aim to manage all our crops according to their respective industry sustainability standards. members of RSPO, ISPO and the Partnership for Indonesia Sustainable

Agriculture (PISAGRO) for palm oil Member of Cocoa Sustainability Partnership for cocoa Bonsucro certification for sustainable sugar cane for Brazil sugar operation

Introduction


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Our Sustainability Approach

Establish sustainability strategy and principles based

on key material issues

Manage material issues via setting of baselines and targets, guided by

our sustainability policies, principles and

commitment

MATERIAL ISSUES PRINCIPLES

A. Carbon Management B. Environmental footprint C. Governance and transparanecy D. Land rightsE. Occupational health and safety F. Smallholders

G. Product traceability /sustainable sourcingH. Product quality and safety I. Yield maximisation and innovation J. Human rights

• Compliance • Healthy Living • Smallholders • Environmental Responsibility • Respect Human Rights • Innovation and Continous Improvement

Meeting the world’s food needs sustainably through innovation and management of excellence

D r i v e r s


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• Target to achieve 100% sustainable CPO supply, requiring all our mills and plantations, including smallholders, to be RSPO-certified by 2019

• Zero burning policy for land clearing• Demarcation of, and maintaining biodiversity of

High Conservation Value (HCV) areas inaccordance with RSPO guidelines since 2008

• No deforestation or new planting on HCV areas• No planting on peatland regardless of depth

since 2013• Free, Prior and Informed Consent when

engaging with local communities and stakeholders

• Protection of human rights and anti-sexualharassment policy to protect women andchildren’s rights

• Prohibits child labour and forced labour

• 100% sustainable and traceable palm oil sourcing by 2020

• Purchasing third party palm oil that is- not originating from areas cleared by primary forest since 2011,

- not from HCV areas,- not from peat soil deeper than 3 metresplanted after February 2009 in line withIndonesian Government regulations

• Respect the Sustainable Palm Oil Policy• Encourages stakeholder engagement and best

agronomic practices• Sets the commitment to audit suppliers, using

the Supplier Guidelines. Audits started in 2015.

Our Sustainability PoliciesWe use RSPO and Indonesia Sustainable Palm Oil (ISPO) certification as part of how we deliver our Sustainable Palm Oil Policy, Palm Oil Sourcing Policy and Responsible Supplier Guidelines. Selected commitments under these polices are as follows

Sustainable Palm Oil Policy 2013(covering our own estates)

Palm Oil Sourcing Policy and Responsible Supplier Guidelines 2014(covering our own estates)


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5. Work and Estate Living Improve the safety, hygiene, and living conditions for our employees, workers and their families living on the estates

6. SolidaritySupport the development of local communities in and around our estates and factories by improving their existing conditions and quality of life

4. SmallholdersSupport the nucleus – plasma scheme by developing and inclusive supply chain

3. Safe and Traceable ProductsEnsure all products ffrom refineries and mills are traceable, safe and beneficial for human consumption

Key Programmes

1. Growing ResponsiblyEncourage and promote sustainability as core to our operations

2. Sustainable Agriculture and ProductsAchieve sustainable agriculture practices in our crop cultivation

Embed sustainability within our internal operational processesand across our supply chains through 6 core programmes


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Sustainability Commitment & Performance


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Our Sustainability Commitment and Targets

Meeting the world’s food needs sustainably through innovation and management of excellence

Sustainability targets1. Achieve ISPO certification for all oil palm estates and mills managed by the Group

by end of 20162. Achieve RSPO certification for all oil palm estates and mills managed by the

Group and its plasma smallholders by end of 20193. 100% sustainable palm oil sourcing by end of 20204. Achieve internationally recognised standards for sustainable agriculture, where

available, for all our other crops, including rubber, sugar, cocoa and tea5. Set a baseline for environmental footprint by 2014 for all factories and develop

environmental reduction targets by 2015 for carbon emissions, energy and water6. Set a baseline and develop community development plans for welfare

improvement for each site by 20157. Implement the Occupational Health and Safety programme and complete the

baseline assessment for all sites in 2015 to reduce work related accidents8. HCV assessment study for all sites completed in 20149. Develop and implement HCV rehabilitation plan for each site by 201510.Phase out the use of paraquat by 2018


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Our Sustainability Performance

Commitments Target Date Status RSPO certification for all estates, and

those of plasma smallholdersEnd 2019 On track

ISPO certification for all estates, and those of plasma smallholders

End 2016 73% completed. Extended to 2017

100% sustainable palm oil sourcing End 2020 On track Develop environmental reduction targets

for carbon emissions, energy and water2015 All data collected. Targets

will be set in 2016 Set baseline and develop community

Development plan for welfare improvement for each site

2015 Achieved

Implement the Occupational Health and Safety programme and complete the baseline assessment for all sites to reduce work related accidents

2015 76% completed. Extended to 2016

Zero fatalities On going Not achieved Develop and implement HCV Rehabilitation plan for each site

2015 HVC rehabilitation plan developed. 20% implemented

Phase out the use of paraquat 2018 On track


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AppendixManaging Our Material Issues


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Material Issues

Key Material Issue Interest GroupA.Carbon management including

deforestationGlobal community including international NGOs and governments

B.Environmental footprint including PROPER, ISO 14001

Community living around estates, local government and NGOs

C.Governance including transparency, business integrity & anti-corruption, risk management

Investors and NGOs

D.Land rights including scarce land resources

Local community; government and NGOs

E.Occupational health & safety Local labour organisations and governmentF. Smallholders including plasma, social

conflict resolution Smallholders, NGOs and local government

G.Product traceability / Sustainable sourcing including RSPO/ISPO

Suppliers and consumers

H.Product quality and safety Suppliers and consumersI. Yield maximisation including innovation Investors, NGOs and governmentJ. Human rights NGOs and government

Key material issues that affect both of our internal and external stakeholders:


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Governance and Integrity

Key Initiatives• Sets the policy framework for high standards of corporate governance and

professional integrity • Sustainability Management Information System (SMIS) to monitor and

ensure the consistent implementation of sustainability efforts across the Group.

• Annual Sustainability Report based on GRI guidelines

Material Issue• Governance including transparency, business integrity and anti-corruption,

risk management

Programme• Growing Responsibly


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Environmental Performance

Key Initiatives• ISPO certification for all oil palm estates and mills by 2017 • RSPO certification for all oil palm estates (nucleus and plasma) by 2019• PROPER (minimum blue) certification of all mills and refineries• HCV management, including no new planting on peatland and HCV area• Monitoring of GHG emissions• Integrated pest management: replace pesticide usage with biological control,

phasing out paraquat• Precision agronomy, including innovation in seed breeding • Fire and haze prevention measures• nurturing the capacity and competencies of our employees and plasma

smallholders via training programmes

Material Issues • Carbon management including deforestation• Environmental footrprint including PROPER, ISO 14001• Yield maximisation including innovation

Programmes• Sustainable Agriculture and Products• Smallholders• Growing Responsibly


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Sustainable Palm Oil Sourcing

Key Initiatives• Palm Oil Sourcing policy and Responsible Supplier Guidelines• Barcode system for BLRS oil palm seeds • Supply chain tracking system for FFB supply• RSPO supply chain certification for refineries• Started implementation of RSPO smallholder certification programme• Strategic partnership with Sustainable Trade Initiative (IDH) for

smallholder certification

Material Issues • Product traceability/ sustainable sourcing including RSPO/ISPO• Smallholders including plasma, social conflict resolution

Programmes• Safe and Traceable Products • Smallholders


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Sustainable Products

Key Initiatives• Product fortification with vitamins and minerals• Recyclable packaging for cooking oil bottles • Implementation of Food Safety Management System through auditing

against Food Safety System Certification (FSSC) 22000• ISO 9001 and Halal certification• Food safety audit for supplier by Quality Assurance team.

Material Issue• Product quality and safety

Programme• Safe and Traceable Products


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People and Communities

Key Initiatives• OHS management system• Provide essential services and basic amenities (health care, housing,

education) to all estates residents• Implementation of local community development programs such as:

o Lip cleft operationso Cataract operationso IndoAgri Sehati: promote maternal and infant healtho Infrastructure development o Donations and sponsorship

Material Issues • Occupational health and safety (OHS)• Human rights• Land rights including scarce land resources

Programmes• Work and estate living • Sollidarity • Smallholders


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This presentation was prepared solely and exclusively for the parties presently being invited for the purpose ofdiscussion. Neither this presentation nor any of its content may be reproduced, disclosed or used without the priorwritten consent of Indofood Agri Resources Ltd.

This presentation may contain statements that convey future oriented expectations which represent the Company’spresent views on the probable future events and financial plans. Such views are presented on the basis of currentassumptions, are exposed to various risks, and are subject to considerable changes at any time. Presentedassumptions are presumed correct at the, and based on the data available on the, date at which this presentation isassembled. The Company warrants no assurance that such outlook will, in part or as a whole, eventually bematerialized. Actual results may diverge significantly from those projected.© Indofood Agri Resources Ltd. All rights reserved.

Indofood Agri Resources Ltd.8 Eu Tong Sen Street#16-96/97 The Central

Singapore 059818Tel: +65 6557 2389

Fax: +65 6557 2387

www.indofoodagri.com

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