http://www.reuters.com/article/latestCrisis/idUSJAK429905
Fri Mar 20, 2009 6:31am EDT
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By Aloysius Bhui
JAKARTA, March 20 (Reuters) - Sinar Mas Group, one of Indonesia's top palm oil growers, denied on Friday accusations that its activities were damaging the environment and said it would stick to plans to expand its plantations.
Greenpeace activists have targeted Sinar Mas in a recent campaign for contributing to deforestation in Indonesia, which is blamed as a key source greenhouse gas emissions in the Southeast Asian country.
"We should have been arrested if we had ever been involved in deforestation," Gandi Sulistiyanto, a managing director of Sinar Mas Group, told Reuters.
He said the company only opened up new plantations in degraded land that had been farmed on or previously logged and not rainforest.
Sinar Mas Group owns publicly-listed PT Sinar Mas Agro Resources Tbk (SMART) (SMAR.JK), which runs its palm oil business, and Asia Pulp & Paper (APP), which operates the pulp and paper business.
Bustar Maitar, Greenpeace Southeast Asia forest campaigner, accused Sinar Mas of destroying forest areas.
"We are facing the greatest threat to humanity -- climate chaos, yet still companies like Sinar Mas can continue to destroy forests and peatlands, rather than protecting them for future generations," Maitar said in a statement.
As of the end of September, SMART managed 127,124 hectares (314,100 acres) of planted oil palm, according to the company.
It produced 410,314 tonnes of crude palm oil in January-September last year, against 509,095 tonnes in all of 2007. [ID:nJAK279457]
The group has earmarked a $100 million palm expansion this year and is not planning to pull back the plan.
"We are still a growing company. We (Indonesia) are still competing with Malaysia to become the world's top producer of palm oil. So we must keep planting," Sulistiyanto said.
He said the current financial crisis may slow down the expansion but would not stop the firm from planting in new areas.
According to Greenpeace, Sinar Mas has 200,000 hectares of unplanted concessions in rainforest in Indonesia and plans to acquire an additional 1.1 million hectares, mainly in Papua.
Sulistiyanto said the firm was currently focused on managing the 11,000 hectares that it has planted with oil palm in the past 14 years in Papua.
"Everybody is eyeing Papua because of its huge land but we haven't got any more concessions there," he said.
Indonesia, the world's top producer of palm oil -- used in a wide range of products, from soap to biodiesel -- is expected to produce 20.25 million tonnes of palm oil in 2009, up from 18.8 million in 2008, the industry association has estimated.
Annette Cotter, campaign manager for the forests campaign in Greenpeace Southeast Asia, has urged Indonesia palm growers to squeeze far higher yields from existing plantations rather than open up more land. [ID:nJAK381772]
Indonesia yields only about 2 tonnes per hectare from its plantations, or just a third of the 6 to 7 tonnes in countries such as Malaysia with better estate management practices. (Editing by Ed Davies and Valerie Lee)
Showing posts with label Golden Agri. Show all posts
Showing posts with label Golden Agri. Show all posts
25 March 2009
22 March 2009
Oil Palm Plantations threat Indonesia’s forests and peatlands
blogger remark:
widjaja family is one of the world biggest pulp （paper）producer, this family can trace its history to the smoke havoc from Riau province,indonesia.
博主注明：
widjaja家族是全球主要纸业生产者，是印尼廖内省烟雾问题制造者。
source
source
One of the most menaces to Indonesia’s forests is the ‘gold rush’ for new oil palm plantations, caused by the increasing global demand for palm oil for food, soaps, cosmetics and bio fuels. Indonesia, the world’s largest palm oil producer has the fastest deforestation rate of any major forested country.
Forest destruction is responsible for about one fifth of global greenhouse gas emissions. Indonesia is widely seen as the world’s third –largest emitter of greenhouse gases after China and United States, a major contributor to climate change, by virtue of the pace of its deforestation.
One of the big companies that has been blaming for destruction of the country’s forest is Sinar Mas Group. Greenpeace’s investigation proves Sinar Mas had cleared carbon-rich peatland, a key source of greenhouse gases when burnt to a depth greater than three metres which is illegal according Indonesian law.
Sinar Mas Group is Indonesia’s largest palm oil company which has about 125,000 hectares of palm oil plantations, and boasts of ‘aggressive plantation expansion’. It has grown its palm oil plantation area by over a third in the last two years and has further expansion plans in Kalimantan (in Lake Sentarum National Park in Borneo’s West Kalimantan) and the largely untouched provinces of Papua (near Papuan Town of Lereh), where it plans to develop a rainforest area of up to 2.8 million hectares. Judging by past operations and known concessions that Sinar Mas holds, the vast majority of future expansion is likely to involve deforestation, some on peatlands and in the habitats of the critically endangered orang-utans.
Sinar Mas is also heavily involved in the pulp and paper industry through its holding company, Asia Pulp & Paper (APP). APP has extensive plantation areas on peatlands and in 2007 was found to be buying illegal timber originating from a peatland area in Riau Province, Sumatra. The peat in this area was more than 4 metres deep, which is illegal to develop, clear or drain under Indonesian law. It is also illegal to buy timber from such areas. Investigations by WWF in 2007 revealed illegal logging by APP in Jambi Province, Sumatra.
Sinar Mas exported over 1 million tonnes of palm oil products in 2007. India and China accounted for nearly half of all exports, while 200,000 tonnes were shipped to Italy, the Netherlands, Germany, Spain and the UK. Sinar Mas supplies Nestlé and Wilmar, and according to data published in November 2007, its customers include Unilever, Proctor &
Gamble, Henkel, Pizza Hut, McDonalds, Burger King, Danone, AAK and Cargill.
On the island of Sumatra, millions of hectares of peatland forests have already been cleared, or are earmarked to be converted into oil palm and pulp and paper plantations by that company. APP is the largest holder of concessions in Riau Province, with over 800,000 hectares. Riau’s Kampar Peninsular contains some of the largest remaining intact peatland forests in Sumatra, which are currently being drained and cleared for industrial expansion by companies including APP. Kampar consists entirely of a single peat dome, with peat depths mostly over 10 metres — extremely deep, forming an enormous store of carbon. As the peat is thoroughly waterlogged, with water content up to 90% or more, drainage and plantation development in one area of the landscape will have widespread detrimental impacts on the remaining natural forest.
The development of APP’s concessions will lead to huge greenhouse gas emissions through the degradation of the carbon-rich peat, and also to massive biodiversity losses. The Kampar peninsular is home to a rich biodiversity, including the Sumatran elephant, and is a last stronghold of the Sumatran tiger.
Greenpeace has been lobbying the Indonesia’s main logging companies and government for immediate halt on the expansion of oil palm plantations which are blamed for the loss of huge areas of what is left of Indonesia’s unspoiled forest.
widjaja family is one of the world biggest pulp （paper）producer, this family can trace its history to the smoke havoc from Riau province,indonesia.
博主注明：
widjaja家族是全球主要纸业生产者，是印尼廖内省烟雾问题制造者。
source
source
One of the most menaces to Indonesia’s forests is the ‘gold rush’ for new oil palm plantations, caused by the increasing global demand for palm oil for food, soaps, cosmetics and bio fuels. Indonesia, the world’s largest palm oil producer has the fastest deforestation rate of any major forested country.
Forest destruction is responsible for about one fifth of global greenhouse gas emissions. Indonesia is widely seen as the world’s third –largest emitter of greenhouse gases after China and United States, a major contributor to climate change, by virtue of the pace of its deforestation.
One of the big companies that has been blaming for destruction of the country’s forest is Sinar Mas Group. Greenpeace’s investigation proves Sinar Mas had cleared carbon-rich peatland, a key source of greenhouse gases when burnt to a depth greater than three metres which is illegal according Indonesian law.
Sinar Mas Group is Indonesia’s largest palm oil company which has about 125,000 hectares of palm oil plantations, and boasts of ‘aggressive plantation expansion’. It has grown its palm oil plantation area by over a third in the last two years and has further expansion plans in Kalimantan (in Lake Sentarum National Park in Borneo’s West Kalimantan) and the largely untouched provinces of Papua (near Papuan Town of Lereh), where it plans to develop a rainforest area of up to 2.8 million hectares. Judging by past operations and known concessions that Sinar Mas holds, the vast majority of future expansion is likely to involve deforestation, some on peatlands and in the habitats of the critically endangered orang-utans.
Sinar Mas is also heavily involved in the pulp and paper industry through its holding company, Asia Pulp & Paper (APP). APP has extensive plantation areas on peatlands and in 2007 was found to be buying illegal timber originating from a peatland area in Riau Province, Sumatra. The peat in this area was more than 4 metres deep, which is illegal to develop, clear or drain under Indonesian law. It is also illegal to buy timber from such areas. Investigations by WWF in 2007 revealed illegal logging by APP in Jambi Province, Sumatra.
Sinar Mas exported over 1 million tonnes of palm oil products in 2007. India and China accounted for nearly half of all exports, while 200,000 tonnes were shipped to Italy, the Netherlands, Germany, Spain and the UK. Sinar Mas supplies Nestlé and Wilmar, and according to data published in November 2007, its customers include Unilever, Proctor &
Gamble, Henkel, Pizza Hut, McDonalds, Burger King, Danone, AAK and Cargill.
On the island of Sumatra, millions of hectares of peatland forests have already been cleared, or are earmarked to be converted into oil palm and pulp and paper plantations by that company. APP is the largest holder of concessions in Riau Province, with over 800,000 hectares. Riau’s Kampar Peninsular contains some of the largest remaining intact peatland forests in Sumatra, which are currently being drained and cleared for industrial expansion by companies including APP. Kampar consists entirely of a single peat dome, with peat depths mostly over 10 metres — extremely deep, forming an enormous store of carbon. As the peat is thoroughly waterlogged, with water content up to 90% or more, drainage and plantation development in one area of the landscape will have widespread detrimental impacts on the remaining natural forest.
The development of APP’s concessions will lead to huge greenhouse gas emissions through the degradation of the carbon-rich peat, and also to massive biodiversity losses. The Kampar peninsular is home to a rich biodiversity, including the Sumatran elephant, and is a last stronghold of the Sumatran tiger.
Greenpeace has been lobbying the Indonesia’s main logging companies and government for immediate halt on the expansion of oil palm plantations which are blamed for the loss of huge areas of what is left of Indonesia’s unspoiled forest.
13 August 2008
Golden Agri Resources 2QFY08 Results
ASIA PACIFIC EQUITY Investment Research
August 13, 2008
BUY Maintain
Price SG$0.565
Target SG$0.890
Stellar Showing
Golden Agri Resources (GAR) posted a stellar set of 2Q results, with earnings showing sequential growth despite cost pressures. As our forecast had been a bit conservative, we now have the luxury of raising its earnings forecast slightly. The stock price has taken a beating in line with the broad sell-off in oil palm plantation stocks and is now trading at single-digit PE. We have toned down our target price to reflect a tougher outlook on a 12-month basis. Given its strong focus on efficiency, GAR is well positioned to weather any industry slowdown.
Beating expectations. GAR’s annualised 1HFY08 core net profits beat our ultraconservative forecast of US$500.2m by 6.5% on better-than-expected FFB production. Against consensus expectation of US$594.8m however, GAR’s annualised net profit fell short by 10.5%. Although we expect 2H to be seasonally stronger, the weaker CPO price would mean 2H profits are likely to be weaker than in 1H. As such, we expect consensus estimates to be downgraded to a more realistic level.
Raising production forecast. With the stronger-than-expected FFB production of 3.467m tonnes (nucleus plus plasma), we are raising our ’08 production forecast from 6.341m tonnes to 6.726m, which is still conservative given GAR’s production to date. We had previously shaved our production forecast based on tree age profile by 5% on fears that the impact of the drought in 2HCY06 could spill over into this year and next, concerns which now appear misplaced. We have also removed the 5% discount on ’09 production, resulting in a bump up from 6.476m tonnes to 6.847m tonnes.
Adjustment in effective CPO price. We have toned down effective ’08 CPO price from US$840 to US$824/tonne. Our ’09 effective CPO price remains at US$740/tonne.
Profit forecast up but target lower.. As a result of changes in FFB production forecast and effective CPO price assumption, we are raising our earnings forecast for ’08 by 2.2% to US$513.3m and revising upwards our ’09 forecast by US$1.0m to US$419.5m.
With another 4.5 months before FY08 ends, we are rolling over our valuation to FY09. We are now pegging GAR at just 15x earnings bringing its target price to a more realisable SG$0.89. GAR is now trading at single-digit PE. Maintain Buy.
KEY HIGHLIGHTS
Salient points from analyst briefing:
Dividend up. GAR has declared an interim dividend of 0.8 cents (SG$), up from 0.5 cents last year, bringing its interim dividend payout to SG$79.8m compared to SG$49.9m last year.
Hectarage expansion. GAR’s planted hectarage now stands at 368k hectares. The company is guiding for a 40K to 60k ha expansion compared to 60k ha before. We believe a 60k increase solely from own planting is somewhat aggressive. However, the company is also looking at some small scale acquisitions to help reach that target.
Mandatory biodiesel blend. GAR’s management is optimistic that the mandatory biodiesel blend being jointly worked out by Malaysian and Indonesian governments will come to fruition. The company has land ready for the construction of a biodiesel plant if the mandatory blend materialises. Based on 20m kilolitres of unsubsidised fuel consumed by Indonesia, a 5% mandatory blend will draw down about 0.9m tonnes of palm oil, or about 5% of Indonesia’s production. Combined with Malaysia’s 0.5m-tonne palm oil required for mandatory biodiesel usage, the amount of palm oil to be converted for energy use will be substantial.
China’s edible oil market. In the past few months, the Chinese government has been artificially suppressing its edible oil imports by using oil from its reserves as well as “borrowing” from the market. To our question of how long China’s edible oil reserves can last, management indicated that without any imports China’s reserves are only sufficient for 1 month.
Production cost. Cost of production per tonne of CPO has increased from US$200/tonne to US$220, mainly due to higher fertiliiser cost. However, based on its fertiliser profitability programme, the company believes there is no need at this point to reduce fertiliser application to maintain profitability.
August 13, 2008
BUY Maintain
Price SG$0.565
Target SG$0.890
Stellar Showing
Golden Agri Resources (GAR) posted a stellar set of 2Q results, with earnings showing sequential growth despite cost pressures. As our forecast had been a bit conservative, we now have the luxury of raising its earnings forecast slightly. The stock price has taken a beating in line with the broad sell-off in oil palm plantation stocks and is now trading at single-digit PE. We have toned down our target price to reflect a tougher outlook on a 12-month basis. Given its strong focus on efficiency, GAR is well positioned to weather any industry slowdown.
Beating expectations. GAR’s annualised 1HFY08 core net profits beat our ultraconservative forecast of US$500.2m by 6.5% on better-than-expected FFB production. Against consensus expectation of US$594.8m however, GAR’s annualised net profit fell short by 10.5%. Although we expect 2H to be seasonally stronger, the weaker CPO price would mean 2H profits are likely to be weaker than in 1H. As such, we expect consensus estimates to be downgraded to a more realistic level.
Raising production forecast. With the stronger-than-expected FFB production of 3.467m tonnes (nucleus plus plasma), we are raising our ’08 production forecast from 6.341m tonnes to 6.726m, which is still conservative given GAR’s production to date. We had previously shaved our production forecast based on tree age profile by 5% on fears that the impact of the drought in 2HCY06 could spill over into this year and next, concerns which now appear misplaced. We have also removed the 5% discount on ’09 production, resulting in a bump up from 6.476m tonnes to 6.847m tonnes.
Adjustment in effective CPO price. We have toned down effective ’08 CPO price from US$840 to US$824/tonne. Our ’09 effective CPO price remains at US$740/tonne.
Profit forecast up but target lower.. As a result of changes in FFB production forecast and effective CPO price assumption, we are raising our earnings forecast for ’08 by 2.2% to US$513.3m and revising upwards our ’09 forecast by US$1.0m to US$419.5m.
With another 4.5 months before FY08 ends, we are rolling over our valuation to FY09. We are now pegging GAR at just 15x earnings bringing its target price to a more realisable SG$0.89. GAR is now trading at single-digit PE. Maintain Buy.
KEY HIGHLIGHTS
Salient points from analyst briefing:
Dividend up. GAR has declared an interim dividend of 0.8 cents (SG$), up from 0.5 cents last year, bringing its interim dividend payout to SG$79.8m compared to SG$49.9m last year.
Hectarage expansion. GAR’s planted hectarage now stands at 368k hectares. The company is guiding for a 40K to 60k ha expansion compared to 60k ha before. We believe a 60k increase solely from own planting is somewhat aggressive. However, the company is also looking at some small scale acquisitions to help reach that target.
Mandatory biodiesel blend. GAR’s management is optimistic that the mandatory biodiesel blend being jointly worked out by Malaysian and Indonesian governments will come to fruition. The company has land ready for the construction of a biodiesel plant if the mandatory blend materialises. Based on 20m kilolitres of unsubsidised fuel consumed by Indonesia, a 5% mandatory blend will draw down about 0.9m tonnes of palm oil, or about 5% of Indonesia’s production. Combined with Malaysia’s 0.5m-tonne palm oil required for mandatory biodiesel usage, the amount of palm oil to be converted for energy use will be substantial.
China’s edible oil market. In the past few months, the Chinese government has been artificially suppressing its edible oil imports by using oil from its reserves as well as “borrowing” from the market. To our question of how long China’s edible oil reserves can last, management indicated that without any imports China’s reserves are only sufficient for 1 month.
Production cost. Cost of production per tonne of CPO has increased from US$200/tonne to US$220, mainly due to higher fertiliiser cost. However, based on its fertiliser profitability programme, the company believes there is no need at this point to reduce fertiliser application to maintain profitability.
12 August 2008
Golden Agri-Resources Ltd
Rising downside risk for CPO prices
8 August 2008
NEUTRAL Maintained
S$0.58 Target: S$0.65
Mkt.Cap: S$5,587m/US$4,040m
Dry spell..........................oil price of US$120 per barrel.
foreword(序言) is repeated please click here if you want to read
Valuation and recommendation
Maintain Neutral but downgraded target price to S$0.65 from S$0.94. There are no changes to our FY08-10 net profit forecasts as our CPO price forecasts are intact. However, we have cut our P/E rating for Golden Agri to 9.5x from 14x to factor in our perceived downside risks for CPO prices. Our new P/E target is aligned with its historical 3-year average 12-month forward P/E. Accordingly, our target price drops from S$0.94 to S$0.65. Our Neutral rating has been maintained as the stock’s potential return continues to be in line with the market’s.
8 August 2008
NEUTRAL Maintained
S$0.58 Target: S$0.65
Mkt.Cap: S$5,587m/US$4,040m
Dry spell..........................oil price of US$120 per barrel.
foreword(序言) is repeated please click here if you want to read
Valuation and recommendation
Maintain Neutral but downgraded target price to S$0.65 from S$0.94. There are no changes to our FY08-10 net profit forecasts as our CPO price forecasts are intact. However, we have cut our P/E rating for Golden Agri to 9.5x from 14x to factor in our perceived downside risks for CPO prices. Our new P/E target is aligned with its historical 3-year average 12-month forward P/E. Accordingly, our target price drops from S$0.94 to S$0.65. Our Neutral rating has been maintained as the stock’s potential return continues to be in line with the market’s.
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