Asian Agri

Business

Founded in 1979, Asian Agri manages 27 palm oil plantations and 20 mills in Sumatra, Indonesia. It has a total palm oil plantation area of 160,000 hectares, of which 60,000 are owned and run by smallholders under the Plasma and KKPA partnership schemes. It has more than 25,000 employees.

Asian Agri is managed by RGE.

PIR-Trans and Plasma Programs

Asian Agri was one of the first companies involved in Indonesia's PIR-Trans (Perkebunan Inti Rakyat-Transmigrasi) program in 1987. The program brought together established and well-equipped plantation owners with transmigrated smallholders. Despite being allotted 2 hectares of land for palm oil cultivation, most of these smallholders were under-skilled, ill-equipped, unfamiliar with palm oil plantation management and living in poverty. Asian Agri developed and implemented the program in Riau and Jambi, Sumatra, facilitating plantation development, developing infrastructure and providing training in best agronomic practices. The company also assisted smallholders in securing bank loans. Smallholders now contribute to half of Asian Agri's total palm oil production.

With better agronomic practices, pest management, high-yield seedlings, fertilizing and plantation management, most of these smallholders have seen improved yields and incomes.

The company has also assisted its partnered smallholders in receiving certification, such as RSPO.

Independent Smallholders

Asian Agri's partnership with smallholders extended to select independent smallholders. Along with WWF Indonesia, RSPO and the government, the company helped established the Amanah Palm Oil Independent Smallholders Association in 2012. As of 2015, the Amanah Association comprises 349 smallholders managing 763 hectares of land. It has the distinction of being the first independent smallholders cooperative in the country to receive RSPO certification. Initially greeted with skepticism, the program later improved independent smallholder cultivation techniques and boosted productivity. Partners have seen increase in fresh fruit bunch yield per hectare from 1.4 to 2.0 tonnes.

In March 2016, the Indonesia Agriculture Ministry, the United Nations Development Programme and Asian Agri piloted a 3-month training program for 500 members of the Amanah Association in effective plantation management. SNV Netherlands Development Organisation facilitated the training and technical support. Participants were later independently assessed based on the Indonesian Sustaintable Palm Oil (ISPO) standards, before being the pioneer batch of independent smallholders to receive ISPO certification.

Asian Agri also announced a collaboration with Initiatief Duurzame Handel (IDH) and local NGO Setara in a three-phase program to engage and collate data on 10,000 independent palm oil smallholders; conduct training and facilitate the formation of a 4,000-member independent smallholder cooperative; and assist 1,000 independent smallholders to receive certification.

Fire Prevention

Asian Agri became a founding member of the Fire-Free Alliance in early 2016. The Alliance implements the Fire-Free Village Programme, which was pioneered by Asia Pacific Resources International Holdings. Implemented in collaboration with NGOs, government agencies and the police, the programme involves education, training, capacity-building, infrastructure development and incentivization for villages to adopt no-burn practices to land clearing.

In parallel with its implementation of the Fire-Free Village Programme, Asian Agri also engages communities through the Masyarakat Peduli Asap program, which similarly promotes fire prevention and best practices in fire management.

Palm Oil-Related Pledges and Commitments

At the 2014 United Nations Climate Summit, Asian Agri was a signatory of the New York Declaration on Forests, which commits to halving the rate of deforestation by 2020, and end it by 2030. In parallel, the company also became a signatory of the Indonesian Palm Oil Pledge (IPOP) along with Golden Agri Resources (GAR), Wilmar and Cargill, committing to deforestation-free palm oil cultivation practices in their supply chains. IPOP disbanded in July 1, 2016.

In 2015, Asian Agri, along with Apical, partnered The Forest Trust to develop and improve its supply chain traceability.

Biogas Power Plants

In 2015, Asian Agri announced plans to build 20 biogas power plants by 2020. The power plants will be powered by biogas produced from the palm oil mill effluent. The company has 5 biogas power plants as of Dec 2015.

Premium Sharing

Since 2011, Asian Agri assisting their smallholders obtained international certificates both RSPO and ISCC to enter international markets, especially European countries which is a potential market for certified palm oil exports. The Premium Sharing is an additional incentive for smallholders. Asian Agri handed the Sustainable Palm Oil Premium since 2014. Premium sharing will be fully utilized for the benefit of smallholders collectively, such as improving rural infrastructure, training of environmentally friendly practices, capacity building of smallholders and other things for their welfare. In December 2016, Asian Agri distributed IDR 2.6 Billion to 29,000 Smallholders at a premium sharing ceremony.

Awards & Recognition

In December 2016, Asian Agri was recognized with the "Company Performance Improvement Award (Green Category)" or the Penilaian Programme Peningkatan Kinerja Perusahaan, by Indonesia’s Minister of Environment and Forestry, Dr. Ir. Siti Nurbaya Bakar, M.Sc.