Listed on the Singapore Exchange on 25 July 2008, Kencana Agri Limited ("Kencana" or the "Group") is a plantation company engaged mainly in the cultivation of oil palms; processing of Fresh Fruit Bunches ("FFB") into Crude Palm Oil (CPO), Crude Palm Kernel Oil ("CPKO") and Palm Kernel Cake ("PKC"); and operation of bulking terminals, port and logistics services.
Kencana's oil palm plantations are strategically located in Sumatra, Kalimantan and Sulawesi regions in Indonesia. Since its inception in 1996, the Group's planted area has grown rapidly from 1,215 hectares to 61,119 hectares in 2012. The Group currently has 4 palm oil mills with a total processing capacity of 210 tonnes/hour and 2 kernel crushing plants with capacity of 435 tonnes/day.
Currently, with its profile of relatively young oil palms (75%), the Group is in a good position to deliver strong double-digit production growth over the next few years, as its oil palms continue to mature and reach peak production stage.
Moving ahead, the Group will remain focused in growing its plantation business. The Group has 198,935 hectares of land bank (Nucleus and Plasma) in which only 31% is planted. Supported by 69% or 137,816 hectares of unplanted area, the Group aims to increase its planted area by 5,000 to 8,000 hectares annually so as to achieve a better mix of palms of various ages and ensure sustainable FFB production.
In order to fully leverage and maximise the value chain of its plantation assets and logistics services, the Group, together with Louis Dreyfus Commodities, has built an integrated palm oil complex in Balikpapan comprising a deep water port, and a bulking terminal with storage capacity of up to 50,000 tonnes. The Group will continue to expand this complex in the years ahead.
A strong supporter of sustainable palm oil, Kencana strives to pursue long-term and sustainable palm oil production for the benefit of all stakeholders. It adopts environmentally friendly practices such as zero burning and zero waste management policies. Apart from this, Kencana's subsidiary PT Sawindo Kencana has been a member of the Roundtable on Sustainable Palm Oil (RSPO) since 2008.
Additionally, the Group sells "green" electricity to the State Owned Electricity company ("PLN") and has signed an Emission Reductions Purchase Agreement ("ERPA") with the Danish Ministry of Climate and Energy to sell Certified Emission Reduction ("CER") credits from its renewable biomass power plant at Bangka Island.
As part of its commitment to improve the social and economic welfare of the local communities in which it operates, Kencana takes its corporate social responsibility seriously through its (a) plasma programme, (b) education initiatives which will benefit children in the villages, (c) collaboration with local hospitals and clinics to provide free basic medical services and check-ups for staff, villagers and their families, (d) sponsorship of social and cultural events, as well as (e) provision of relief programmes during natural calamities such as earthquakes and floods.