Bumitama Agri delivers attractive ROE, aims for steady growth with young trees

SINGAPORE (Sept 24): In 2012, a billboard advertisement in Raffles Place for Bumitama Agri carried an eye-catching slogan: “Mum was wrong. Slow and steady doesn’t win the race.” The oil palm grower was listed on the Singapore Exchange that year, propelling the controlling Lim family of Indonesia and their family-owned conglomerate, Harita Group, into the international arena.

True to the billboard, Bumitama’s early years were marked by rapid expansion of its landbank. Bumitama started in 1996 with a 17,500ha landbank in Central Kalimantan and planting began two years later. By 2016, its total planted area had grown more than 10 times to 175,243ha. This figure stood at more than 183,000ha as at end-June, with about 2,000ha in Riau and the rest in Central and West Kalimantan. Importantly, the bulk of its trees are young or in their prime. In FY2017 ended December, Bumitama’s crude palm oil (CPO) production volume rose 16.8% y-o-y to 818,835 tonnes.

“We were latecomers in the business; our history is short. But we started planting quite aggressively in 2003. We also planted on [new] acreage in later years, so the average age of our trees is low,” explains Bumitama CEO and executive chairman Lim Gunawan Hariyanto.

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