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Asian Agri's Traceability System – One to One Partnership Commitment

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Asian Agri's Traceability System – One to One Partnership Commitment ASIAN AGRI’S TRACEBILITY SYSTEM: ONE TO ONE PARTNERSHIP COMMITMENT By: Bernard Alexander Riedo Director of Sustainability and Stakeholder Relations ABOUT ASIAN AGRI NORTH SUMATRA RIAU ESTABLISHED IN 1979 JAMBI Asian Agri is a leading national palm oil company that put partnership with smallholders as its Owned Estates 100,000 ha main business model Plasma 60,000 ha Smallholders’ estates Independent 36,000 ha Smallholders’ estates ABOUT ASIAN AGRI RIAU N. SUMATRA 39k Ha (Owned) 35k Ha (Plasma) 43k Ha (Owned) 9 CPO Mills 8 CPO Mills 4 KCPs 2 KCPs 3 Biogas Plants 2 Biogas Plants R&D Center R&D Center Training Center JAMBI 18k Ha (Owned) 23k Ha (Plasma) 4 CPO Mills 3 KCPs One of the largest RSPO, ISPO & ISCC certified oil producers in the world. 2 Biogas Plants The 1st company with RSPO & ISPO certified independent smallholders MILESTONE 1979 1983 1987 1989 1991 Acquired 8,000 1st Palm Oil Mill Pioneered Plasma Established Successfully Ha land bank in in Gunung Melayu schemes in Riau state of the art developed and north Sumatra st & Jambi R&D centre hand over 1 Plasma estate 2006 2005 2002 1996 Implement ZERO BURN Set up seed DxP Progeny during land Asian Agri became Established producing testing to produce member of RSPO Planters School preparation facilities - OPRS of Excellence high yielding seeds 1994 2012 2013 2014 2015 – 2017 7 units of Biogas Set up Tissue & 13 planned Achieve beyond Biggest ISCC & Achieve 50% yield Culture lab to RSPO certified 1 Mn MT CPO Vol improvement in Kick Start Plasma clone oil palms smallholders in replanting areas Replanting Indonesia 2007 SUSTAINABILITY POLICY BEST MANAGEMENT PRACTICES CERTIFICATIONS: INTEGRATED PEST SOIL & MOISTURE CONSERVATION & MANAGEMENT CONSERVATION BIODIVERSITY ENERGY SUSTAINABLE WATER ZERO BURNING MANAGEMENT MANAGEMENT POLICY SMALLHOLDERS CONTRIBUTION IN ASIAN AGRI PLASMA 3rd PARTY SUPPLIERS SMALLHOLDERS (including ISH) 250,000 MT 250,000 MT Total area of 3rd Party suppliers: * Per year 243,000 Ha NUCLEUS * Data per October 2018 500,000 MT TRACEABILITY JOURNEY 2012 2015 2016 2017 2018 Started ISH Established traceability Collaboration with Achieved Collaboration with partnership department for IDH & Yayasan Setara 100 % FFB traceability Meo Carbon & SNV identification & Jambi for ISH to plantations for 3rd party traceability verification traceability in Jambi in North Sumatra & Riau Achievement History Plantations are considered to be traceable if the following data is complete: - Plantation’s GPS coordinate - Name & address of the plantation - Plantation area in hectare - Process to overlay with the provincial spatial plan (RTRWP) map - Yield data for quota lock mechanism TRACEABILITY PARTNERS N. Sumatra * Will start at the end of 2018 Riau * Landscape analysis using GRAS tool * Traceability system verification Jambi * Started in 2016 * Smallholder verification, polygon mapping, and training * Certification preparation for independent smallholders ONE TO ONE PARTNERSHIP COMMITMENT = TRACEABILITY WHO BENEFITS? 100,000 Ha : 100,000 Ha Environment Economy The One to One Commitment will see 1. Increased sustainability 1. Higher production us match each hectare of our own 2. No new land clearance 2. Increased welfare plantations with land owned by 3. Help smallholders earn 3. Development of local smallholders by the end of 2018. sustainability certification economy potential We provide smallholders with training, Smallholders Asian Agri assistance and modern equipment to 1. Increased yield Traceability of supply chain help increase yields and earn 2. Higher income sustainability certification. CHALLENGES & KEY SUCCESS FACTORS WHERE WE ARE HEADING 120,000 100,000 40,000 31,000 100,000 Ha 24,500 18,600 11,242 6,045 2,791 60,000 Plasma Smallholders Independent Smallholders Owned by Asian Agri 20,000 0 INDEPENDENT SMALLHOLDERS PARTNERSHIP Total : 36,000 Ha N. Sumatra 14,000 Ha Riau 9,000 Ha Jambi 13,000 Ha INCREASE YIELD The One to One commitment not only protects the traceability of palm oil, but also increases the capability of the smallholders to achieve optimum results. Negeri Lama Amanah • The First Independent smallholder • The First Independent smallholder • empowerment project in 2012 • association that received RSPO certificate • Growing from 1,169 ha to 5,097 ha • & ISPO Certificate in Indonesia • Involving 1,209 families • Growing from 763 ha to 1,048 ha; • Involving 501 families 9 12 Yield (Ha/Year) 18 21 1100 1310 Price (Rp/Kg) 1060 1378 325 30 Logistic (Rp/Kg) 92 48 0.4 1.0 Income (Mio/Mo/Ha) 1.2 1.9 AMANAH ASSOCIATION Increased FFB buying price July 29th, 2013 to IDR 0.3 Mio / MT First independent smallholder association in Indonesia certified by RSPO Increased income from IDR 1.2 Mio to IDR 2.2 Mio / Month / Ha AMANAH April 11th, 2017 First independent Increased production smallholder association from 18 MT to 21 MT certified by ISPO SMALLHOLDER JOURNEY TOWARDS SUSTAINABILITY Thank You .
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