SGX-listed Bumitama Agri Ltd is one of the leading Fresh Fruit Bunches (FFB) growers and producers of Crude Palm Oil (CPO) and Palm Kernel (PK) in Indonesia.
With 17 mills across Central and West Kalimantan as well as Riau, The Group manages close to 187,000 hectares across 17 mills, processing over 5 million MT of FFB, and a CPO yield of 4.1 metric tonnes per hectare.
In 2024, Bumitama recorded its highest-ever revenue of IDR 16.73 trillion, supported by market price rallies. At the same time, it kept costs in check through centralised procurement, extensive mechanisation, and enhanced supply chain efficiency – delivering steady dividends for shareholders.
Looking ahead, Bumitama continues to focus on raising productivity through agronomy, research, and mechanisation, while maintaining a strong commitment to environmental stewardship and community development. Here are 5 things investors need to know about Bumitama.
#1 Bumitama’s operational performance is highly dependent on weather conditions. What are some strategies to mitigate against these risks?
Palm oil price is expected to remain elevated in 2025 due to lingering supply-related constraint from unfavourable weather. This represents upside opportunity for Bumitama Agri in particular, due to its industry leading productivity performance.
Our focus towards achieving greater productivity includes resilience amid unfavourable weather conditions, which have increased in frequency. Ongoing initiatives to optimise productivity such as our water management system have helped retain water during extreme drought and drain excess water during high rainfall periods.
Other productivity-related initiatives such as using more organic fertilisers and leguminous cover crops are also beneficial in extreme weather conditions. The main purpose is to improve soil condition by maintaining a relatively stable moisture level.
Additionally, continued efforts to take in more external FFB from independent smallholders to sustain high utilisation of mills have helped to mitigate falling output and maintain higher economies of scale. External FFB contribution has risen from 27% of total FFB processed in 2020, to 35% in 9M24.
#2 Given the recent extreme weather conditions, how will this affect the Crude Palm Oil (CPO) and Palm Kernel (PK) output for 2025 and beyond?
Apart from extreme weather conditions in recent years, the slowdown of output growth in the palm oil industry since 2019 is due to a combined effect of absence of significant expansions in the past decade and declining industry yield figures from the peak between 2008 and 2011. As a result, the rate of growth in global palm oil output between 2019 to 2024 has slowed down to a CAGR of 1%.
Today, industry experts expect some output growth for 2025 over last year’s decline. The same goes for Bumitama, we believe both production and productivity will improve this year. We typically release the official guidance between February and May.
Contrary to the industry’s declining palm oil yield, Bumitama Agri has consistently stayed on the path towards achieving higher yields and extraction rates by investing in research and development, technology, and best practices in cultivation of oil palm. These efforts have made us one of the most efficient producers in the industry, boasting a CPO yield of 4.7 ton per ha in 2023.
#3 How does Bumitama remain competitive against other players in the industry?
Being in the commodity business, Bumitama is mindful to be ready to tackle any economic and environmental challenges that come our way. Hence, we aim to be the most efficient producer in the industry by achieving optimal levels of operational productivity in addition to keeping tight control on costs and prudent capital management, while ensuring sustainability initiatives are updated with the changing dynamics of our business. To get there, we are mindful of balancing the needs of all stakeholders.
The Group has also invested in research and development, technology, and best practices in cultivation of oil palm, which have made the Group one of the most efficient producers in the industry.
#4 Given the focus on sustainable agriculture, how has Bumitama committed to its sustainability goals.
The Group’s commitment towards sustainability dates back a decade ago when we took a major stride forward by implementing an NDPE-based sustainability policy (No Deforestation, No Peat, No Exploitation), being one of the first palm oil growers to do so.
Today, we are managing some 40,000 hectares of conservation areas under our operational permits, in collaboration with local communities and biodiversity experts on ecosystem restoration, including 130 hectares manually restored and 800 hectares through drone seeding. Our key purpose is to safeguard critical orangutan habitats and wildlife migration corridors. This approach was recognized by the 2023 RSPO (Roundtable on Sustainable Palm oil) Excellence Award in Conservation Leadership for integrating plantations and conservation areas into a holistic landscape approach.
Through initiatives like the Sekolah Desa Berdaya, a community sustainable agriculture training centre, Bumitama actively engages local communities in promoting integrated farming practices and offering sustainable livelihood alternatives, such as forest patrolling and reforestation using agroforestry methods. The main idea is to de-link income generation from deforestation.
This mindset extends to plantation and production operations, integrating carbon-centric practices with regenerative agriculture. Organic waste and by-products, such as biogas methane and biocharcoal derived from Empty Fruit Bunches (EFB), are used to generate electricity and enrich soil, reducing dependence on chemical fertilizers and enhancing soil health. Biological pest control strategies, like the use of barn owls, have reduced rodenticide usage by 90%, demonstrates the Group’s commitment to minimizing chemical inputs.
By integrating conservation, carbon management, and innovative farming practices, Bumitama showcases a sustainable model where biodiversity, oil palm plantations, and resilient communities coexist.
#5 Why should investors take a closer look at Bumitama Agri?
Despite short term fluctuations, palm oil prices have remained elevated in the past few years, which is considerably higher than the pre-pandemic years due to structurally different industry dynamics.
Bumitama Agri is also a good proxy to the palm oil industry due to its pure upstream nature and leading industry productivity.
To date, Bumitama has gained traction to be regarded as a good dividend stock in SGX’s market due to the bullish track record in recent years.
Editor’s Note: Some answers for this article were extracted from the SGX 10 in 10 series published on 25 February 2025 and republished with permission. You can read more about Bumitama Agri (SGX: P8Z) on the SGX website. You can also read other featured companies from SGX’s 10 in 10 series on the DollarsAndSense website.
