Bumitama Agri

Last updated
Bumitama Agri Ltd
Public (SGX: P8Z)
Industry Food processing
Founded1996
Key people
ProductsCrude palm oil, palm kernel
RevenueIncrease2.svg USD 544 million (2019)
Increase2.svg USD 59 million (2019)
Total assets Increase2.svg USD 1.2 billion (2019)
Total equity Increase2.svg USD 678 million (2019)
Number of employees
32,000
Subsidiaries Bumitama Gunajaya Agro
Website http://www.bumitama-agri.com/

Bumitama Agri Ltd is the Singapore holding company of subsidiary Bumitama Gunajaya Agro. Bumitama is an Indonesian oil palm plantation company which cultivates oil palm trees and produces crude palm oil (CPO). It was established in 1996 by the Harita Group with its first acquisition of land in Central Kalimantan. Bumitama owns over 230,000 hectares and has planted 187,000 hectares of oil palm trees, primarily in Central and West Kalimantan. Bumitama owns 14 CPO mills (13 in Kalimantan and 1 in Riau), which produce more than 1,000,000 tons of CPO a year. Primary purchasers of their CPO include Wilmar International, the Sinar Mas Group and Musim Mas. [1] In April 2012, Bumitama Agri presented an IPO on the Singapore Stock Exchange at a price of $0.745 per share.  [2]

Contents

History

Bumitama is part of the Harita Group, which was founded in 1915 by Lim Tju King (an immigrant from the Fujian province of China). His son, Lim Hariyanto Wijaya Sarwono (president and chair of Harita Group), [3] took over and moved into the timber business as a log dealer. He built a small factory and began manufacturing plywood in 1983.

With the help of his two sons, Lim Gunawan Hariyanto (CEO of Harita Group) and Gunardi Hariyanto Lim (Deputy CEO of Harita Group), the group entered the coal mining industry with the 1985 Kelian Equatorial Mining gold project (a joint venture, with Rio Tinto owning 90 percent and the Harita Group owning 10 percent) and the 1988 Lanna Harita coal project. [4] [5]

In 1996, Bumitama was established by the Harita Group with its acquisition of 17,500 hectares in Central Kalimantan and the company began its plantation business two years later. In 2002, the group increased its plantation size by buying out smaller planters. By 2007 Bumitama had 50,000 hectares in cultivation, and by 2010 another 50,000 hectares had been planted. As of March 2012, Bumitama had 118,000 hectares in cultivation; for comparison, Singapore (where Bumitama is publicly traded) covers about 69,300 hectares (693 km2). [6]

In 2007, IOI Corporation bought 33 percent of PT Bumitama Gunajaya Agro [7] as part of its plan for strategic investment in Indonesia. Bumitama would benefit from IOI's technical expertise and management support, since IOI has operations throughout the palm-oil supply chain and markets in more than 65 countries. [8]

Business

Land bank and plantations

Bumitama's primary business is cultivating oil palm trees, harvesting FFB and processing it into crude palm oil, and the company owns 230,000 hectares in Central and West Kalimantan. Of this, 187,000 hectares have been planted. The planted land consists of 130,000 hectares of nucleus plantations and 170,000 hectares of mature plantations. In 2019 Bumitama's plantations produced 3,266,483 metric tons of FFB, and a FFB yield of 19.1 metric tons per hectare. [9] The company generally transports its harvested FFB to the CPO mills within 24 hours to ensure maximum freshness and yield.

As of 2014, 41% of Bumitama's land bank was partially or fully contested, meaning it faces limits to plantation development imposed by law, the Roundtable on Sustainable Palm Oil (RSPO), buyer and investor policies, or land disputes with communities and other companies. [10]

CPO mills

Bumitama owns 14 CPO mills in Kalimantan and Riau, with a combined FFB processing capacity of 5,850,000 tons per year. In 2019 the company's CPO mills had an average oil-extraction rate (extracted CPO per unit of FFB) of 23 percent, [11] one of the highest in the industry. Bumitama sells its CPO to international companies Wilmar, Sinar Mas and Musim Mas. [12]

Future plans

About 20 percent of the company's land is unplanted, and Bumitama will be able to increase their cultivated plantation land. Most of its palm trees are immature or young, with a weighted average age of 10 years. Since only 70 percent of the trees have reached peak production age, Bumitama expects FFB yield and CPO production to increase as more of the oil palm trees reach peak-production age. [9]

Corporate social responsibility

Education

As of March 2012 the group has built 23 schools in Central Kalimantan, West Kalimantan and Riau, provides scholarships for elementary- to tertiary-level students and sponsors training for teachers and principals. Bumitama provides free tuition, books, and school-bus transportation to all students at these schools. [13]

Medical care

Since 2004, Bumitama has provided free medical services to employees and community residents by building medical centers and supplying drugs and doctors. The company sponsors periodic basic medical check-ups and medication from local doctors. [14]

Houses of worship

The company has built houses of worship (primarily churches and mosques) for community residents. [15]

Environmental concerns

In 2013, a subsidiary cleared an orangutan area illegally. [16] In the same year, it also cleared on peat soil, [16] which can release a large amount of carbon dioxide.

Roundtable on Sustainable Palm Oil

Bumitama has been a member of the Roundtable on Sustainable Palm Oil (RSPO) since October 2007. The RSPO is a non-profit organization formed in 2004 to promote the growth and use of sustainable oil-palm products with credible global standards and shareholder engagement. According to critics, however, the RSPO greenwashes palm oil companies' destructive practices. [17] [18] At least three complaints have been filed against Bumitama Agri for violating RSPO principles, criteria and new-planting procedures. [19] [20] [21]

Awards

Record

Planting program

The planting program since 2004: [23]

FFB production

Bumitama FFB production has increased at a compounded annual rate of 88.3 percent, from 3,582 tons in 2002 to 1,065,644 tons in 2011. Bumitama's fresh fruit bunch production since 2002: [24]

FFB yield

FFB yield is the industry measurement for fresh fruit bunch per hectare, measured in metric tons and usually a function of tree maturity in that area:

Oil extraction rate

Oil extraction rate (OER) is the amount of CPO extracted per unit of FFB, measured as a percentage:

CPO production

The company's CPO production: [27]

Financial performance

Bumitama's revenue: [27]

Net profits: [28]

Initial public offering

On 12 April 2012, Bumitama launched its initial public offering on the Singapore Stock Exchange. HSBC and DBS Bank were bookrunners for the IPO. [29]

A total of 327,324,000 shares (297,570,000 shares and an additional 29,754,000 in greenshoe) were issued during the listing. [30] During the book building phase the IPO was reportedly 31 times oversubscribed, the highest by any IPO in Singapore since 2007. [31] [32]

Bumitama's shares were priced at $0.745 for the IPO. On its first day of trading the stock closed at $0.98, 32 percent above its IPO price, valuing Bumitama's market capitalization at 1.7 billion Singapore dollars. [33] Cornerstone investors for the IPO were Wilmar International, UOB Asset Management, Value Partners Hong Kong, [34] Hwang Investment Management [35] and Target Asset Management. [36]

Management

  1. Lim Gunawan Hariyanto - Executive chairman and chief executive officer
  2. Lim Christina Hariyanto - Executive director
  3. Johannes Tanuwijaya - Chief strategy officer
  4. Sie Eddy Kurniawan - Chief financial officer
  5. Roebbianto - Chief operating officer [37]

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References

  1. ↑ "Bumitama Main Info". Archived from the original on 2012-04-19. Retrieved 2012-03-20.
  2. ↑ "Bloomberg - Bumitama Agri Ltd".
  3. ↑ "Reuters - Tirta Mahakam Resources Tbk".
  4. ↑ Nyompe, Pius Erick. "The Closure of the Kelian Gold Mine and the Role of the Business Partnership for Development/World Bank" (PDF).
  5. ↑ "Lanna Coal Business".
  6. ↑ "Encyclopedia of Nations - Singapore".
  7. ↑ Castle, James (2010). Indonesian Business: The Year in Review 2007. CastleAsia. p. 82. ISBN   978-9793780795.
  8. ↑ "IOI - about us".
  9. 1 2 "ANNUAL REPORT 2012" (pdf). Retrieved 15 September 2020.
  10. ↑ Chain Reaction Research, "Bumitama Agri Ltd." (15 October 2014). Available here
  11. ↑ "Bumitama Agri Ltd - Quarterly Announcement". February 2020: 8.Cite journal requires |journal= (help)
  12. ↑ "BGA - Operations". Archived from the original on 2012-04-19. Retrieved 2012-03-23.
  13. ↑ "BGA - Education". Archived from the original on 2011-12-29. Retrieved 2012-03-21.
  14. ↑ "Bumitama Ltd - Prospectus". April 2012: 143.Cite journal requires |journal= (help)
  15. ↑ "BGA - Religion". Archived from the original on 2011-12-29. Retrieved 2012-03-21.
  16. 1 2 Hartmann, K. (2015). Aus kontrolliertem Raubbau: Wie Politik und Wirtschaft das Klima anheizen, Natur vernichten und Armut produzieren. Karl Blessing Verlag. ISBN   9783641156114 . Retrieved 2016-05-30.
  17. ↑ "'Certified' Palm Oil Not A Solution — English". Foei.org. Archived from the original on 2013-10-05. Retrieved 2013-10-07.
  18. ↑ "RSPO Dispatch: Oil palm is not development » Rainforest Action Network Blog". Understory.ran.org. Archived from the original on 2013-10-04. Retrieved 2013-10-07.
  19. ↑ "Complaint on: PT. Hati Prima Agro (Bumitama Gunajaya Agro) filed on 02/07/2012". Archived from the original on 2013-03-23.
  20. ↑ "Complaint on: PT. Nabatindo Karya Utama, a subsidiary of RSPO member Bumitama Gunajaya Agro, filed on 11/03/2013". Archived from the original on 2013-08-28.
  21. ↑ "Complaint on: PT. Ladang Sawit Mas, a subsidiary of RSPO member Bumitama Gunajaya Agro, filed on 08/04/2013". Archived from the original on 2013-08-28.
  22. ↑ "Bumitama Agri Ltd - Prospectus". April 2012: 145.Cite journal requires |journal= (help)
  23. ↑ "Bumitama Agri Ltd - Prospectus". April 2012: 136.Cite journal requires |journal= (help)
  24. ↑ "Bumitama Agri Ltd - Prospectus". April 2012: 126.Cite journal requires |journal= (help)
  25. ↑ "Bumitama Agri Ltd - Prospectus". April 2012: 94.Cite journal requires |journal= (help)
  26. ↑ "Bumitama Agri Ltd - Prospectus". April 2012: 95.Cite journal requires |journal= (help)
  27. 1 2 "Bumitama Agri Ltd - Prospectus". April 2012: 101.Cite journal requires |journal= (help)
  28. ↑ "Bumitama Agri Ltd - Prospectus". April 2012: 103.Cite journal requires |journal= (help)
  29. ↑ "Indonesia's Bumitama to Revive US$160-million Singapore IPO". Biz Daily. Archived from the original on 2014-02-21. Retrieved 2012-03-21.
  30. ↑ "Bumitama Agri Ltd - Prospectus". April 2012: 35, 36.Cite journal requires |journal= (help)
  31. ↑ "Bumitama Agri IPO Over Subscribed 31 Times". Live Trading News. Archived from the original on 2012-10-06. Retrieved 2012-04-08.
  32. ↑ "UPDATE 1-Bumitama Agri to raise up to $194 mln in Singapore IPO". Reuters. 2012-04-03.
  33. ↑ Gabriel, Anita (13 April 2012). "Bumitama soars in IPO debut". The Straits Times.
  34. ↑ "Indonesia's Bumitama Agri seen raising $176 mln in Singapore IPO". Reuters. 2012-03-26. Retrieved 2012-03-26.
  35. ↑ "Hwang Investment Management". Archived from the original on 2012-03-01.
  36. ↑ "Indonesia's BGA Said to Seek Up to $176 Million in Singapore IPO" . Retrieved 2012-03-26.
  37. ↑ "Bumitama Agri Ltd - Prospectus". April 2012: 178–182.Cite journal requires |journal= (help)
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