Slide 1: Shareholder's plantation visit
Shareholder’s plantation visit April 2016 The Connection to the world of Sustainable Tropical Agriculture
Slide 2: Summary
Summary Sipef group – Company profile The world of natural rubber World agriculture The world of palm oil The world of tea
Slide 3: SIPEF group Company profile
SIPEF group Company profile The Connection to the world of Sustainable Tropical Agriculture Agriculture • 1st segment of the supply chain ‐ commodities Tropical • Recent industrialised countries Sustainable • Audited certifications Connection • Publicly quoted
Slide 4: SIPEF group Company profile: continuous production, diversification
SIPEF group Company profile The Connection to the world of Sustainable Tropical Agriculture 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 w
Slide 5: SIPEF group Company profile
SIPEF group \Zz Luxembourg #f ~ Ivory Coast #f—& a gf Indonesia sf ‘ ! *%
Slide 6: Company profile - Indonesia
SIPEF group Company profile ‐ Indonesia
Slide 7: Company profile - Papua New Guinea
SIPEF group Company profile – Papua New Guinea
Slide 8: Planted hectares summary - December 2015
SIPEF group Planted hectares summary – 31 december 2015 Palm Rubber Tea Bananas Other Total % Group share Indonesia 44 762 6 250 1 777 52 789 75% 38 364 PNG 13 558 3 283 58 16 899 24% 16 899 Ivory coast 630 42 672 1% 672 58 320 9 533 1 777 630 100 70 346 100% 55 935 % 82% 14% 3% 1% 0% 100,0% Group s
Slide 9: Hectare comparison
SIPEF group Hectare comparison 2013 2014 Var % Total 3.249 3.345 3,0% Sipef 54,54 55,69 2,1%
Slide 10: Current production
SIPEF group Current production In Tonnes: Total 2015 Total 2014 YoY% Palm oil own ‐ Tolan Tiga Group 69 297 65 895 +5,2% ‐ UMW/TUM Group* 27 789 19 530 +42,3% ‐ PT Agro Muko 77 640 77 704 ‐0,1% ‐ Hargy Oil Palms 63 822 56 494 +12,3% Total palm oil own 238 548 219 623 +8,6% Total palm oil outgrowers
Slide 11: Sales - Gross margin
SIPEF group Sales – Gross margin Total consolidated turnover (including corporate) – 2015: 225 935 KUSD – 2014: 285 899 KUSD 300 000 250 000 239 100 200 000 186 001 150 000 100 000 30% 20% 50 000 21 141 16 712 15 758 22% 15 062 28% 5% ‐9% 6 502 1% 7 345 23% 0 Palm Rubber Tea Bananas ‐50 000 2014 Sal
Slide 12: Gross margin per product
SIPEF group Gross margin – per product (based on internal management reporting) Total gross margin 2015: KUSD 53 075 Total gross margin 2014: KUSD 92 841 2015 Gross margin 3,7% 2014 Gross Margin 6,5% 0,1% 10,5% 7,6% 1,5% 3,0% ‐2,2% 81,1% 88,2% Palm Rubber Tea Bananas Corporate Palm Rubber Tea Banana
Slide 13: Profit and loss statement
SIPEF group Profit and loss statement (based on internal management reporting) Profit and loss In KUSD 2015 2014 Gross Margin 53 075 92 841 Services and administration ‐ 26 520 ‐ 29 191 Other operating income/(charges) 888 7 995 Financial income/charges ‐ 709 ‐ 619 Exchange result 102 57 Result befo
Slide 14: Cash flow - Key figures
SIPEF group Cash flow ‐ Key figures Cash flow – Key figures 120.000.000 100.000.000 80.000.000 60.000.000 40.000.000 20.000.000 0 ‐20.000.000 ‐40.000.000 ‐60.000.000 2010 2011 2012 2013 2014 2015 Net financial position Net result (share of the group) Cash from operations Cash used for investments Di
Slide 15: Strategy and expansion
SIPEF group Strategy and 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
Slide 16: Expansion
SIPEF group Expansion • Beneficial interest from 38 365 Ha to 66 793 Ha • Future expansion of 18 475 Ha Musi Rawas and South Sumatra expansion • Further increase participation interests in existing subsidiaries Indonesia • Both in oil palm and rubber • Beneficial interest from 16 899 Ha to 15 102 Ha
Slide 17: Future expansion
SIPEF group Future expansion 80.000 70.000 60.000 50.000 40.000 30.000 20.000 10.000 0 2005 2008 2015 2020 2025 North Sum North Sum expansion Bengkulu Bengkulu expansion PNG PNG expansion Musi Rawas Ivory Coast Ivory Coast expansion
Slide 18: Summary
Summary Sipef group – Company profile The world of natural rubber World agriculture The world of palm oil The world of tea
Slide 19: Synthetic vs natural rubber
The world of natural rubber Synthetic vs natural rubber Synthetic vs natural rubber (in KTON) 18 000 16 660 16 150 16 000 15 470 15 104 15 114 14 124 14 000 12 409 12 327 12 542 12 169 12 000 11 633 11 179 10 336 9 728 10 000 8 000 6 000 4 000 2 000 0 2009 2010 2011 2012 2013 2014 2015 Natural rubbe
Slide 20: World production
The world of natural rubber World production Production 2015: 12 542 KTON Natural rubber production is 3% 5% primarily done in Asia: 25% • Indonesia and Thailand 18% represent 60% of the world’s rubber production • Other Asian countries mainly include India and 9% China. 5% • The Sipef – group produ
Slide 21: World production
The world of natural rubber World production World rubber production (in KTON) 5 000 4 500 4 357 4 000 3 500 3 167 3 165 3 000 2 440 2 500 2 292 2 000 1 864 1 500 1 115 1 000 856 659 724 606 430 500 346 251 0 Indonesia Thailand Malaysia Vietnam Other Asia Africa South America 2009 2015
Slide 22: World consumption
The world of natural rubber World consumption 2015 Rubber consumption is 6% 1% 0% primarily done in Asia 9% 38% • China is still the principal 11% consumer of natural rubber • Other Asia mainly includes Japan, Thailand, Indonesia 27% 8% and Korea China India Other Asia Europe USA & Canada South Amer
Slide 23: World consumption
The world of natural rubber World consumption World rubber consumption (in KTON) 5000 4 711 4500 4000 3500 3 371 3 344 3000 2 673 2500 2000 1500 1 331 1 129 1 032 1 004 1000 905 790 691 483 500 92 133 16 17 0 China India Other Asia Europe USA & Canada South America Africa Australia 2009 2015
Slide 24: Rubber industries
The world of natural rubber Rubber industries Rubber industries • Natural rubber is still 2% 5% primarily used in tyre 3% products, along with 4% synthetic rubber 4% 6% • Natural rubber offers good elasticity, whilst synthetic 7% rubber materials offer better resistance to 69% temperature, oil, … TY
Slide 25: Global supply and demand
The world of natural rubber Global supply and demand Global supply, demand and stocks (in KTON) 13 000 3 500 3 000 12 000 2 500 11 000 2 000 1 500 10 000 1 000 9 000 500 0 8 000 ‐ 500 7 000 ‐1 000 2009 2010 2011 2012 2013 2014 2015 Supply Demand Deficit Total Rubber stocks
Slide 26: Rubber prices
The world of natural rubber Rubber prices Historical rubber price (USD/ton) 7 000 6 000 5 000 4 000 3 000 2 000 1 000 0 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Slide 27: Q&A
Q&A
Slide 28: Summary
Summary Sipef group – Company profile The world of natural rubber World agriculture The world of palm oil The world of tea
Slide 29: Drivers behind agriculture: Population growth
Drivers behind agriculture 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 • Agri
Slide 30: Drivers behind agriculture: Meat consumption
Drivers behind agriculture Meat consumption Meat consumption per capita is increasing worldwide due to the disposable income growth in developing countries. Kg of grains used to produce 1kg of: Beef 7kg Pork 4kg Poultry 2kg Any change in meat consumption patterns will have a major effect on the dema
Slide 31: Drivers behind agriculture: Oil and fat consumption
Drivers behind agriculture Oil and fat consumption Oil and fat per capita consumption (in Kg) 70,0 59,7 World average = 25,7kg 60,0 54,7 50,0 45,0 40,0 35,4 30,0 27,4 25,0 21,3 20,0 15,1 14,6 10,0 0,0 EU‐27 USA Hong Kong Taiwan China India Indonesia Pakistan Nigeria Source: Oil World 2012; Foreign a
Slide 32: Drivers behind agriculture: Land input
Drivers behind agriculture Land input Available land 1,42 1,4 1,38 1,36 Bn Hectares 1,34 1,32 Decline: land desertification, salinization, erosion, road and 1,3 urban expansion 1,28 1,26 1,24 1,22 1,2 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999
Slide 33: Drivers behind agriculture: Land input
Drivers behind agriculture Land input Green = decrease in arable land (-0.5% to -20%) Red = increase in arable land (+0.5% to +13,4%)
Slide 34: Drivers behind agriculture: Land input
Drivers behind agriculture Land input • Increased demand for meat/fat/processed foods • Increased demand for biofuel • Decreasing Agricultural land per capita • Disposable income growth in developing countries
Slide 35: Drivers behind agriculture: Fertilizer input
Drivers behind agriculture Fertilizer input • Fertilization is necessary • All nutrients that are taken out of the soil as food/harvest, has to be resupplied as fertilizer • Fertilizer is also in limited reserves: o Nitrogen can be made but has very high production costs o Phosphates has very limite
Slide 36: Drivers behind agriculture: Water input
Drivers behind agriculture Water input • Global fresh water supplies are under stress • Roughly 70% of global water consumption is for agricultural usage Liters of water used to produce 1kg of: Chocolate 17 000 L Beef 15 500 L Cotton 10 000 L Butter 5 500 L Cheese 3 200 L Bread 1 608 L
Slide 37: Drivers behind agriculture: Global shift
Drivers behind agriculture Global shift • Historically, agriculture was a family business – Still approximately 9/10 farms are family owned – Agriculture is relatively closed from capital markets – Heavy governmental support and regulations • Demographic and economic shift – Increasingly hard to fin
Slide 38: Drivers behind agriculture: Investments in innovation
Drivers behind agriculture Investments in innovation More efficient input allocation and management practices are needed Drones Breeding Remote sensing Drop irrigation
Slide 39: Drivers behind agriculture: Observations
Drivers behind agriculture Observations • Agriculture is increasingly becoming a new and alternative investment • Additional capital is needed to tackle the sectorial challenges of feeding (and fueling) the world in an efficient and sustainable manner • Agriculture is highly diverse and is fairly re
Slide 40: Summary
Summary Sipef group – Company profile The world of natural rubber World agriculture The world of palm oil The world of tea
Slide 41: Vegetable oils
The world of palm oil Vegetable oils • Vegetable oils are oils or fats extracted from a plant. Their texture can be described as liquid, oily and fatty • Most vegetable oils can either be used as cooking oil, be used for food and cosmetics or for fuel and diesel production • The most common oil type
Slide 42: Vegetable oils
The world of palm oil Vegetable oils 2014/15: 201,7 million tonnes 1994/95: 93,1 million tonnes 21% 30% 16% 5% 37% 8% 21% 13% 6% 23% 11% 9% Palm oil Soya oil Palm oil Soya oil Rape oil Sunflower oil Rape oil Sunflower oil Palm kernel and coconut oil Other oils/animal fats Palm kernel and coconut oil
Slide 43: Palm oil production
The world of palm oil Palm oil production 2014/15 ‐ Palm oil world production Palm oil production is primarily 1% 6% 1% done in Asia: 4% 3% • Indonesia and Malaysia represent 85% of the world’s palm oil production 53% • Oceania includes our 32% subsidiary Hargy Palm Oils Ltd • Total Sipef production
Slide 44: Palm oil consumption
The world of palm oil Palm oil consumption 2014/15 World consumption • Asia and the Middle‐east consists mainly of China, India, Indonesia, 0% 14% 11% 2% Malaysia and Pakistan 2% 6% • Africa consists mainly of Nigeria, Egypt, Ghana and Kenya • Very limited CPO consumption in North and South America
Slide 45: Palm oil prices
The world of palm oil Palm oil prices Historical palm oil price (CIF Rotterdam) 1400 1200 1000 800 600 400 200 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Slide 46: Palm oil fruit
The world of palm oil Palm oil fruit Palm oil is extracted from the flesh of the palm fruit: 84 % of palm oil production is used in food and cosmetics, 16 % is used in biofuels and energy
Slide 47: Advantages of Palm oil
The world of palm oil Advantages of Palm oil Palm oil has many advantages: • Highest‐yielding vegetable oil crop: less than a third of the land required compared to other crops • Usable in a wide range of products, from margarine and chocolate to ice cream, soaps, cosmetics and fuel • India, China,
Slide 48: Comparison to other oils
The world of palm oil Comparison to other oils Palm oil yields per Ha are much higher than other vegetable oils Tonnes per hectare 4,5 4,5 3,9 4 3,5 1,6 1,3 3 2,5 2 0,53 0,51 1,5 Rapeseed oil 1 Soybean oil 0,5 Palm oil 0 Indonesia Malaysia U.S.A. Brazil EU Germany Palm oil Soybean oil Rapeseed oil S
Slide 49: Comparison to other oils: resources used
The world of palm oil Comparison to other oils Resources used per vegetable oil
Slide 50: Sustainability - Health
The world of palm oil Sustainability ‐ Health • Most vegetable oils (such as canola oil and Soy oil) need to be hydrogenated to produce a solid fat; • During this hydrogenation process, trans fats are created as well; • In humans, consumption of trans fats increases the risk of coronary heart diseas
Slide 51: CO2 sequestration
The world of palm oil CO2 sequestration 50
Slide 52: Sustainability issues
The world of palm oil Sustainability issues • RSPO = Roundtable on • Social : Sustainable Palm Oil – Housing – Education – Medical care – Remuneration – Child labour • Expansion : – Gender practices - No fragile soils - No deforestation - Free Prior and Informed Consent • Environmental : ‐ Fertilise
Slide 53: Sustainable palm oil
The world of palm oil Sustainable palm oil
Slide 54: Continuing process
The world of palm oil Continuing process To accompany and support its growth, SIPEF continues to fulfil its sustainable development obligations: – ISO 9001 and ISO 14001 certified – RSPO certified – ISCC certified – ISPO certified – EurepGAP/GlobalGAP – United Nations clean Development Mechanism – R
Slide 55: Q&A
Q&A Source : http://www.rspo.org/ and Sipef NV
Slide 56: Summary
Summary Sipef group – Company profile The world of natural rubber World agriculture The world of palm oil The world of tea
Slide 57: Global tea production
The world of tea Global tea production World production of tea Tea production has known an 5.500.000 annual average growth rate of 5.000.000 4,3% per year. 4.500.000 Average increase per country is: ‐ China +9,6% 4.000.000 ‐ Vietnam +5,5% 3.500.000 ‐ Kenya +4,6% ‐ India +3,3% 3.000.000 ‐ Sri Lanka +
Slide 58: Global tea production
The world of tea Global tea production Global production 2013 Tea production is primarily 11% done in Asia: 3% 4% • China and India combined 3% 39% produce 63% of the world’s tea 7% • Indonesian tea represents 9% 3% of the global production is primarily produced on the island of 24% Java CHINA INDIA
Slide 59: Global tea consumption
The world of tea Global tea consumption Tea consumption 2013: 4 636 KTON Tea consumption 2003: 3 024 KTON 28% 17% 33% 32% 3% 24% 3% 5% 2% 4% 3% 2% 4% 5% 3% 4% 20% 3% 2% 3% China India Russia UK US China India Russia UK US Pakistan Egypt Japan Turkey Other Pakistan Egypt Japan Turkey Other
Slide 60: Types of tea
The world of tea Types of tea 2013 tea types 2003 tea types 6% 9% 28% 41% 37% 32% 22% 25% CTC ORTHODOX GREEN OTHERS CTC ORTHODOX GREEN OTHERS ‐ Black tea is fermented tea and has two production methods: ‐ CTC (“Cut‐tear‐curl”) manufacturing: used in tea bags ‐ Orthodox manufacturing: results in big
Slide 61: Tea prices
The world of tea Tea prices Historical tea price (Mombasa market) 3 500 3 000 2 500 2 000 1 500 1 000 500 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Slide 62: Q&A
Q&A