SIPEF Consumer Goods Seminar Degroof Petercam - Brussels June 20, - PowerPoint PPT Presentation

SIPEF Consumer Goods Seminar Degroof Petercam - Brussels June 20, 2019 The Connection to the world of Sustainable Tropical Agriculture 1

Summary 1. SIPEF Group Company profile 2. SIPEF Group Palm oil in the world 3. SIPEF Group - Expansion 4. SIPEF Group – Productions & prices 5. SIPEF Group – Financial performance 6. Peer review 2 The Connection to the world of Sustainable Tropical Agriculture

SIPEF group - Company profile Agriculture • 1st segment of the supply chain - commodities Tropical • Recent industrialised countries Sustainable • Audited certifications Connection • Publicly quoted 3 The Connection to the world of Sustainable Tropical Agriculture

SIPEF group - Company profile Continuous • Continuous crops production • Palm oil : basic commodity for food (and recently Diversified in energy) product • Rubber : cyclic business - tire industry • Indonesia : leading producing country within Asian Diversified in market origin • PNG : export oriented with strong agronomical basics 4 The Connection to the world of Sustainable Tropical Agriculture

SIPEF group - Company profile Worldwide 5 The Connection to the world of Sustainable Tropical Agriculture

SIPEF group - Company profile Indonesia 6

SIPEF group - Company profile Papua New Guinea 7 The Connection to the world of Sustainable Tropical Agriculture

SIPEF group - Company profile Planted hectares summary 100% – 31 December 2018 Palm Rubber Tea Bananas Other Total % Group share Indonesia 58 035 6 275 1 763 66 073 82% 59 572 PNG 13 687 13 687 17% 13 687 Ivory coast 749 31 780 1% 780 Total 71 722 6 275 1 763 749 31 80 540 100% 74 039 % 89% 8% 2% 1% 0% 100% Group share 66 291 5 376 1 591 749 31 74 039 8 The Connection to the world of Sustainable Tropical Agriculture

Summary 1. SIPEF Group Company profile 2. SIPEF Group Palm oil in the world 3. SIPEF Group - Expansion 4. SIPEF Group – Productions & prices 5. SIPEF Group – Financial performance 6. Peer review 9 The Connection to the world of Sustainable Tropical Agriculture

SIPEF group – Palm oil in the world Palm oil in the world - Population growth • In the coming 40 years, mankind will have to produce more food than in the previous 10 000 years put together • Population growth will have a huge impact on future food demands • Rising middle class is causing diet changes in developing countries • Agricultural land is increasingly becoming scarcer 10 The Connection to the world of Sustainable Tropical Agriculture

SIPEF group - Palm oil in the world Oil and fat consumption Oil and fat consumption per capita (in Kg) Source: Oilworld 80 72,58 70 67,32 59,43 60 55,77 54,95 49,47 +55% 50 39,05 40 35,54 29,93 30 27,55 26,07 25,86 25,52 21,46 18,29 20 15,57 15,15 14,04 10 0 EU-28 USA China India Indonesia Pakistan Nigeria Brazil World 2018 2012 11

SIPEF group - Palm oil in the world Palm oil in the world - Land input • Increased demand for meat/fat/processed foods • Increased demand for biofuel • Decreasing Agricultural land per capita • Disposable income growth in developing countries 12 The Connection to the world of Sustainable Tropical Agriculture

SIPEF group - Palm oil in the world Palm oil in the world - Comparison to other oils Resources used per vegetable oil: 13 The Connection to the world of Sustainable Tropical Agriculture

SIPEF group - Palm oil in the world Palm oil in the world - Vegetable oils Source: Oilworld 2018: 231 million tonnes 1994/95: 93,1 million tonnes Other oils/animal fats 20% Palm oil 16% Palm oil 32% Other oils/animal Palmkernel oil + fats coconut oil 37% 5% Soya oil 21% Sunflower oil 8% Palm kernel and Rapeseed oil Rape oil coconut oil Sunflower oil 11% 11% Soya oil 6% 9% 24% Palm oil Soya oil Rape oil Palm oil Soya oil Rapeseed oil Sunflower oil Palmkernel oil + coconut oil Other oils/animal fats Sunflower oil Palm kernel and coconut oil Other oils/animal fats 14

SIPEF group - Palm oil in the world Palm oil in the world - Palm oil production Source: Oilworld 2018 Palm oil production Total of 72,61 Mn tonnes Other countries Africa 3% 2% Middle & South America 6% Thailand 4% Indonesia Malaysia 57% 27% Indonesia Malaysia Thailand Middle & south america Africa Oceania Other countries 15

SIPEF group - Palm oil in the world Palm oil in the world - Palm oil consumption 2014/15 World palm oil consumption per region 14% 0% 11% 2% 2% 6% 65% Europe Russia North America South America Asia and the middle east Africa Oceania 16 The Connection to the world of Sustainable Tropical Agriculture

SIPEF group - Palm oil in the world Palm oil in the world - Sustainability • Palm oil remains confronted with a European perception problem based on • Health issues • No fat <-> moderate use of saturated fat • Saturated fats – only 50% saturated and no transfats • Environmental issues • Deforestation – most efficient vegetable oil/hectare of land • Sustainable Development Goals – Palm Oil covers the majority of it! 17 The Connection to the world of Sustainable Tropical Agriculture

SIPEF group - Palm oil in the world Palm oil in the world - Sources for deforestation 18 The Connection to the world of Sustainable Tropical Agriculture

SIPEF group - Palm oil in the world Palm oil in the world – Commodity commitment 19 The Connection to the world of Sustainable Tropical Agriculture

SIPEF group - Palm oil in the world Palm oil in the world - Sustainable palm oil 2,81 Million Ha RSPO certified production area 20 The Connection to the world of Sustainable Tropical Agriculture

SIPEF group - Palm oil in the world Number of certified production and/or operational units 21 The Connection to the world of Sustainable Tropical Agriculture

SIPEF group - Palm oil in the world Palm oil in the world - Biodiesel in Europe • Approval of the Delegated Act by the EU-commission • Renewable energy from 20% in 2020 to 32% by 2030 • Renewable energy in transport from 10% in 2020 to 14% in 2030 • Conventional biofuels will be optional and limited to 7% maximum • Palm Oil is a defined to have high ILUC-risk (in high-carbon stock land) • 2019 consumption level capped till 2023, gradual reduction by 2030 22 The Connection to the world of Sustainable Tropical Agriculture

SIPEF group - Palm oil in the world Biodiesel worldwide Source: Oilworld Biodiesel worldwide 2017 Biodiesel worldwide 2018 Total of 35,8 Mn tonnes Total of 40,7 Mn tonnes 10% 10% 4% 4% 31% 35% 7% 7% 1% 1% 17% 19% 27% 26% Palm oil Soya Rapeseed oil Sunflower oil Palm oil Soya Rapeseed oil Sunflower oil Tallow Coconut oil Other oils and fats Used cooking oil Tallow Coconut oil Other oils and fats Used cooking oil 23

SIPEF group - Palm oil in the world Palm oil use for biodiesel EU Source: Oilworld 2018 Palm oil use for Biodiesel 2017 Palm oil use for Biodiesel Total of 14,2 Mn tonnes Total of 11,0 Mn tonnes EU 27% EU 35% 3,8 Mn tonnes 3,8 Mn tonnes 7,2 Mn tonnes 10,4 Mn tonnes Non EU 65% NON EU 73% EU NON EU EU Non EU 24

Summary 1. SIPEF Group Company profile 2. SIPEF Group Palm oil in the world 3. SIPEF Group - Expansion 4. SIPEF Group – Productions & prices 5. SIPEF Group – Financial performance 6. Peer review 25 The Connection to the world of Sustainable Tropical Agriculture

SIPEF group - Expansion Strategy & expansion SIPEF group= 100.000 Ha planted (group’ share) Focus on core-business • Palmoil – Rubber – Bananas – Tea • Indonesia – Papua New Guinea Focus on ‘Sustainable Agriculture’ (RSPO) Expansion of existing activities Acquisition of new investments Balanced leverage 26 The Connection to the world of Sustainable Tropical Agriculture

SIPEF group - Expansion Planted area (in hectares) – 100% 100.000 94 265 Ha 94 470 Ha 90.000 80 540 Ha 78 213 Ha 80.000 69 439 Ha 70.000 56 811 Ha 60.000 48 093 Ha 50.000 40.000 30.000 20.000 10.000 0 2005 2008 2016 2017 2018 2023 2028 North Sum North Sum expansion Bengkulu Bengkulu expansion PNG PNG expansion Musi Rawas Dendy Marker Ivory Coast Ivory Coast expansion 27

SIPEF group - Expansion Supply base (in hectares): own ha and outgrowers ha – 100% 140 000 120 000 21 786 21 786 21 786 21 786 21 786 21 786 21 786 21 652 21 286 20 538 100 000 19 656 80 000 60 000 94 099 94 265 94 331 94 329 94 441 94 462 94 470 93 296 91 203 87 408 80 540 40 000 20 000 0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Own ha Outside ha 28 The Connection to the world of Sustainable Tropical Agriculture

SIPEF group - Expansion Planted hectares and production of CPO (sale of FFB not included) (BI) 180% + 74% 170% 160% 150% 140% BI hectares BI production 130% + 23% 120% 110% 100% 29 The Connection to the world of Sustainable Tropical Agriculture

SIPEF group - Expansion 100% CPO production (including plasma and outgrowers – NO FFB) 700.000 2028 600.000 Own: 480 Kton Outg: 119 Kton Total: 599 Kton 500.000 400.000 Outgrowers Own 300.000 200.000 100.000 0 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 30 The Connection to the world of Sustainable Tropical Agriculture