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R.E.A Holdings PLC

At 31 December 2016, the REA group held agricultural land allocations in East Kalimantan totalling 108,000 hectares of which 71,000 hectares were fully titled subject to completion of conditional swap arrangements.

The land allocations comprise a core area lying either side of the Belayan river together with satellite areas located within reasonable proximity of the core area.  Areas planted with oil palms amounted to 43,000 hectares of which 32,000 hectares were mature.

Seedling nursery

Reserve land held by the REA group only becomes available for development when the titling process has proceeded to a point at which the group has been granted development and necessary land clearing licences, and compensation agreements have been reached with local villagers who have claims in respect of their previous use of the land. 

All new plantings are grown from specially selected seed bought from third party suppliers able to provide material with well established yield potential. Seed is initially planted out in polythene bags in nurseries where it grows into seedlings suitable for planting over a period of nine to twelve months.

Immature areas

New areas designated for planting undergo several months of preparation during which roads and bridges are established and a legume cover crop is planted.  Seedlings are then transported to the prepared areas and planted out in a triangular pattern of 143 palms per hectare. In hillier areas, seedlings are planted on terraces. Young palms grow for about 30 months after field planting before starting to produce fruit.

The group intends to continue its expansion and aims over time to plant with oil palms all suitable undeveloped land available to the group (other than areas set aside by the group for conservation).

Harvesting

REA group's palms fruit continuously throughout the year although fruiting volumes reduce slightly during the drier months of May to August of each year.  Fruits grow in bunches, known as fresh fruit bunches (FFB), at the intersections of the lower fronds and the trunk. FFB yield per hectare increases to a maximum some 8 years after first yield and is maintained until the last 5 years of the 25 year life of the palm.

Each fresh fruit bunch comprises up to 100 fruitlets attached to a fibrous husk. Bunch weights increase progressively from 2.5 kg at earliest maturity to 15+ kg at 10 years after planting.

As bunches ripen, fruitlets loosen and detach. Bunches are ready for harvesting after 10 loose fruitlets have detached. The riper the fruitlets the greater the crude palm oil content.

A fresh fruit bunch

A fruitlet

Each individual fruitlet is made up of a central 'endocarp' or nut and an outer 'pericarp'. The pericarp consists of a skin or 'exocarp' and a fleshy pulp surrounding the nut known as the 'mesocarp'. It is the mesocarp that contains crude palm oil.  The nut separately consists of an outer shell and a kernel. The latter contains palm kernel oil, a lauric oil that is similar to coconut oil.

Bunches are harvested manually by harvesters who "chop" through the base of the bunch using a chisel or, in the case of older palms which are taller, a blade on the end of an extensible pole.  The group pays careful attention to harvesting fruits when ripe.  It aims to ensure that every oil palm area is harvested every ten days.  Harvesters are trained to harvest only fully ripe bunches and to collect any detached fruitlets which fall off the bunch during harvesting (these have a particularly  high crude palm oil content).

Crop transport

The group has made a significant investment in mechanisation of fruit collection.  Harvested bunches, together with detached fruitlets, are taken to collection points on the estate roads.  From there, they are loaded into mini-tractors and transferred to bins. The bins are then loaded onto lorries and taken to the group's oil mills where the bin loads are discharged for processing. 

Steam sterilisation 

All oil palm fresh fruit bunches harvested from the mature areas are processed in the REA's three oil mills.   The two older mills, which date from 1998 and 2006 respectively, have recently been upgraded and expanded to increase the processing capacity of each mill to 80 tonnes per hour.  The third mill commenced operations in September 2012 and has a current capacity of 40 tonnes per hour but has been designed to permit the installation of a second processing line so as to double its capacity.  Work to expand the third mill commenced in 2015 with completion expected during 2017.

The processing cycle in each mill is the same.  Loaded cages are run into sterilisation chambers where bunches are subjected to pressurised steam sterilisation for approximately two hours. Sterilised bunches are then transferred to thresher drums, where individual fruitlets are separated from the fibrous bunch base.  The separated fruitlets pass to a screw press which extracts the crude palm oil from the fleshy pulp or mesocarp leaving a press-cake containing fibre and nuts.  Extracted crude palm oil then proceeds through clarification, purification and vacuum drying processes after which it is pumped to tanks adjacent to each mill for temporary storage.

Pressing

Press cake residues are separated by pneumatic separation (winnowing) into fibre and nuts and the nuts are passed to a nut cracker where the palm kernels are separated from their shells.  The group's two newer oil mills each incorporate, within the overall facility, a palm kernel crushing plant where the palm kernels are further processed to extract the crude palm kernel oil that they contain.

Clarification

The three mills provide the group with sufficient capacity to meet the current processing requirements.

Kernel crushing

Each kernel crushing plant has a capacity of 150 tonnes of kernels per day which is sufficient to process all kernel output from the group's three existing oil mills.

River transport by barge 

CPO and CPKO produced by the group's oil mills are transferred by road tankers to nearby loading points on the Belayan river and from there downstream by purpose built barge. A fleet of river barges of varying tonnages ranging between 750 and 4,000 tonnes is used to transport CPO and CPKO.   Tugs tow the barges up and down the river. The barges are operated under a long term lease arrangement, although some are time chartered and these are also equipped for sea voyages. A fleet of trucks is also maintained to ensure that CPO and CPKO can be evacuated promptly during dry periods when river levels are too low for barge transport.

Transhipment terminal

The group has its own transhipment terminal on the Mahakam river (of which the Belayan river is a tributary) downstream of the Port of Samarinda.  Here CPO and CPKO are stored in tanks pending delivery to buyers elsewhere in the Indonesian archipelago or to international destinations.