Asian Agri is one of Asia's largest

palm oil Palm oil is an edible vegetable oil derived from the mesocarp (reddish pulp) of the fruit of the oil palms. The oil is used in food manufacturing, in beauty products, and as biofuel. Palm oil accounted for about 33% of global oils produced from ...

producers, with an annual production of 1 million tons of palm oil.

Business

Founded in 1979, Asian Agri manages 28 palm oil plantations and 20 mills in

Sumatra Sumatra is one of the Sunda Islands of western Indonesia. It is the largest island that is fully within Indonesian territory, as well as the sixth-largest island in the world at 473,481 km2 (182,812 mi.2), not including adjacent i ...

, Indonesia. It has a total oil palm plantation area of 100,000 hectares, and partners with Plasma smallholders responsible for an additional 60,000 and independent smallholders responsible for 41,000 hectares. It employs more than 25,000 employees.

Partnerships

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 plantation owners with transmigrated smallholders. Asian Agri developed and implemented the program in

Riau Riau is a province of Indonesia. It is located on the central eastern coast of Sumatra along the Strait of Malacca. The province shares land borders with North Sumatra to the northwest, West Sumatra to the west, and Jambi to the south. Accord ...

and

Jambi Jambi is a province of Indonesia. It is located on the east coast of central Sumatra and spans to the Barisan Mountains in the west. Its capital and largest city is Jambi. The province has a land area of 50,160.05 km2, and a sea area of 3, ...

, 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. The company has also assisted its partnered smallholders in receiving certification, such as RSPO, International Sustainability and Carbon Certification (ISCC), and Indonesian Sustainable Palm Oil (ISPO).

Independent smallholders

Asian Agri's partnership with smallholders extended to selected 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 comprised 349 smallholders managing 763 hectares of land. It is the first independent smallholders cooperative in the country to be RSPO-certified. 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 Sustainable Palm Oil (ISPO) standards, before being the pioneer batch of independent smallholders to receive ISPO certification.

Sustainability

Fire prevention

Asian Agri implemented a zero burning policy across its operations in 1994 to prevent land by cleared by fire. It 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 The New York Declaration on Forests is a voluntary and non-legally binding political declaration which grew out of dialogue among governments, companies and civil society, spurred by the United Nations Secretary-General of the United Nations, Secret ...

, 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 on July 1, 2016. In 2015, Asian Agri, along with Apical, partnered The Forest Trust to develop and improve its supply chain traceability. In 2017 Asian Agri achieved 100% traceability of fresh fruit bunches reaching its mills In 2018 Asian Agri became a founding member of The Sustainability Assurance and Innovation Alliance (SUSTAIN), a group of oil palm growers, palm oil processors, consumer goods manufacturers, not-for-profit organizations and technology companies who are using

blockchain A blockchain is a type of distributed ledger technology (DLT) that consists of growing lists of records, called ''blocks'', that are securely linked together using cryptography. Each block contains a cryptographic hash of the previous block, a ...

to improve palm oil 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 had 5 biogas power plants as of Dec 2015 and increased to 10 as of Dec 2018.

References

{{Reflist, 30em Palm oil companies of Indonesia Companies based in Medan Agriculture companies established in 1979