Message from Our Managing Director

Dear Stakeholders of Asian Agri, I am honoured to present to you Asian Agri’s 2019-2020 Sustainability Report – the fourth since we progress both in the management and performance of sustainability, which I am proud to have the opportunity to share with you through this report.

Facing Challenges in 2019 and 2020 The years 2019 and 2020 presented unique challenges for Asian Agri and the palm oil industry in dry weather conditions in North Sumatra, Riau and Jambi. As oil palms are heavily reliant on water, the dry weather affected the production yields of our plantations. This phenomenon affected many palm oil companies in Indonesia. Therefore, we all looked forward to a better year in 2020.

oil prices which continued until Q4 2020. To cope with the pandemic, we had to rapidly pivot our operations and implement our Business Continuity Plan, ensuring that all employees and workers from ramped up our adoption of technology to continue some of our operations.

Emerging Stronger In more than 40 years of operation we have encountered many challenges, and despite production disruption and low prices, we managed to overcome the situation and continue our operations as planned. This is proof of the resilience of our business and the result of years of implementation of the ‘QPC’ principles of better quality, higher productivity and lower production costs. Furthermore, amid the short-term effects of these external challenges, we pressed on with our sustainability plans and estates and plasma scheme smallholders, and consistently assist our independent smallholders through our CSV (Corporate Shared Value) Program. In 2019, two of our independent smallholders received These were great achievements in our long term partnerships program with the smallholders, as they traceability for our plantations and smallholder partners, and continuously engage with third parties to provide assurance for our traceability system. Another highlight was our progress in waste and energy management. By the end of 2020, 17 out of more biogas plants in 2019, bringing the total to 10, which generate renewable energy as additional power for our mill and for domestic use. Lastly, we worked with external consultants to conduct a prioritisation exercise on the Sustainable Development Goals (SDGs) to identify goals which Asian Agri can best contribute to, and plan to integrate our contribution to the SDGs into our overall approach to sustainability in the next phase.

17

out of 22 of our mills have for waste and residue

Looking to the future, we see many opportunities and positive developments for the palm oil industry

Our Path Ahead

To ensure we continue to achieve sustainability for our business, our people and the environment, rather than opening up new developments; replanting and cultivation; and using quality seeds and best agronomic practices as the keys to success. This is the same approach we take with our smallholders. We will continue to work with our plasma second generation of replanting. As for independent smallholders, we recognise that they often require even greater support to improve their agronomic practices and yields, and will enhance our programs for them based on our experience helping plasma scheme smallholders. These are commitments that (FFVP), which has grown over the years and now covers 16 villages or around 343,000 Ha of land. In chemicals and increasing our use of biological controls. Looking to the future, we see many opportunities and positive developments for the palm oil industry. Despite the ongoing pandemic, the global demand for palm oil is expected to continue to increase due opportunities for Indonesia as the world’s top producer of palm oil as well as those dependent on the sector for their livelihoods

of Indonesia’s largest and best managed resource-based groups, creating value for community, country, the climate, customers and ultimately, to the company. We will continue to keep our eye out for new challenges ahead, adapt to the ‘new normal’ and emerge stronger from the challenges of 2019 and 2020. I look forward to continuing this journey together with all of you.

Kelvin Tio Managing Director