We gathered that production has recovered in 3Q10 after a company visit.
We maintain our estimates in view of its recent setbacks.
However, we still maintain a Trading Buy call on Golden Agri due to improving prospects, attractive valuations and high liquidity compared to peers.
Target price S$0.62.
Palm Oil Body RSPO Rebukes Indonesia's Smart On Sustainability
Claims
KUALA LUMPUR -(Dow Jones)- The Roundtable On Sustainable
Palm Oil, an industry organization that groups palm producers, environmental
groups and food companies, said Thursday that Indonesia-based Sinar Mas Agro
Resources & Technology (SMAR.JK) has breached its policies and that the
firm's membership in the group is at risk.
"Members who have been found
to not be in compliance and who continue to be in noncompliance with the RSPO
regulations could ultimately face sanctions, including the suspension and,
eventually, the termination of their membership of the RSPO," it
said.
The comments by RSPO could diminish Smart's hopes that global
conglomerates could resume purchases of palm oil products from the company.
Global food giants Nestle SA (NESN.VX) and Unilever NV (
UN), as well as U.S.-based fast food chain Burger King Holdings Inc. (BKC),
are on the long list of food companies that has suspended sourcing of palm oil
from Smart in response to claims by Greenpeace that the producer is involved in
deforestation.
In August, Smart issued results from an independent
audit--carried out by the Control Union Certification and the British Standard
Institute--refuting charges by environmental group Greenpeace that it had
cleared large swathes of land with high conservation value and drained peat
lands to cultivate palm crop.
Smart said the audit provided evidence that
"the firm had operated responsibly and within the laws and regulations set out
by the Indonesian government," but BSI said subsequently that some aspects of
its report were misreported, and that Smart had set up plantations on deep peat
in two estates.
RSPO said on its website that its grievance panel had
written to Smart and its parent firm, the Singapore-listed Golden Agri Resources
Ltd (E5H.SG), about the breaches revealed by the auditors. Golden Agri is not a
member of the RSPO.
The industry body has urged Golden Agri to stop
announcing publicly it was in the process of obtaining RSPO certification for
its estates or that it planned to become a RSPO member.
"Golden Agri is
not a member of the RSPO, nor has the RSPO yet received a membership application
from the company. The panel encourages Golden Agri to submit a full and complete
application for membership (and) documentation RSPO would need in order to
review the application," the agency said.
Palm Oil Body RSPO Rebukes Indonesia's Smart On Sustainability
Claims
KUALA LUMPUR -(Dow Jones)- The Roundtable On Sustainable
Palm Oil, an industry organization that groups palm producers, environmental
groups and food companies, said Thursday that Indonesia-based Sinar Mas Agro
Resources & Technology (SMAR.JK) has breached its policies and that the
firm's membership in the group is at risk.
"Members who have been found
to not be in compliance and who continue to be in noncompliance with the RSPO
regulations could ultimately face sanctions, including the suspension and,
eventually, the termination of their membership of the RSPO," it
said.
The comments by RSPO could diminish Smart's hopes that global
conglomerates could resume purchases of palm oil products from the company.
Global food giants Nestle SA (NESN.VX) and Unilever NV (
UN), as well as U.S.-based fast food chain Burger King Holdings Inc. (BKC),
are on the long list of food companies that has suspended sourcing of palm oil
from Smart in response to claims by Greenpeace that the producer is involved in
deforestation.
In August, Smart issued results from an independent
audit--carried out by the Control Union Certification and the British Standard
Institute--refuting charges by environmental group Greenpeace that it had
cleared large swathes of land with high conservation value and drained peat
lands to cultivate palm crop.
Smart said the audit provided evidence that
"the firm had operated responsibly and within the laws and regulations set out
by the Indonesian government," but BSI said subsequently that some aspects of
its report were misreported, and that Smart had set up plantations on deep peat
in two estates.
RSPO said on its website that its grievance panel had
written to Smart and its parent firm, the Singapore-listed Golden Agri Resources
Ltd (E5H.SG), about the breaches revealed by the auditors. Golden Agri is not a
member of the RSPO.
The industry body has urged Golden Agri to stop
announcing publicly it was in the process of obtaining RSPO certification for
its estates or that it planned to become a RSPO member.
"Golden Agri is
not a member of the RSPO, nor has the RSPO yet received a membership application
from the company. The panel encourages Golden Agri to submit a full and complete
application for membership (and) documentation RSPO would need in order to
review the application," the agency said.
This news is from today (23rd) - also see Reuters - http://www.alertnet.org/thenews/newsdesk/JAK46131.htm
If they are suspended or excluded from the RSPO they'll never be able to win
back contracts with Unilever, Kraft, Nestle, Burger King and most of the other
major global brands. They all insist that their suppliers must be RSPO members.
Also they won't be able to sell to the expanding biofuels market in Europe.
Basically they would be blocked from accessing some very significant markets.
This news is from today (23rd) - also see Reuters - http://www.alertnet.org/thenews/newsdesk/JAK46131.htm
If they are suspended or excluded from the RSPO they'll never be able to win
back contracts with Unilever, Kraft, Nestle, Burger King and most of the other
major global brands. They all insist that their suppliers must be RSPO members.
Also they won't be able to sell to the expanding biofuels market in Europe.
Basically they would be blocked from accessing some very significant markets.
Palm Oil Body RSPO Rebukes Indonesia's Smart On Sustainability
Claims
KUALA LUMPUR -(Dow Jones)- The Roundtable On Sustainable
Palm Oil, an industry organization that groups palm producers, environmental
groups and food companies, said Thursday that Indonesia-based Sinar Mas Agro
Resources & Technology (SMAR.JK) has breached its policies and that the
firm's membership in the group is at risk.
"Members who have been found
to not be in compliance and who continue to be in noncompliance with the RSPO
regulations could ultimately face sanctions, including the suspension and,
eventually, the termination of their membership of the RSPO," it
said.
The comments by RSPO could diminish Smart's hopes that global
conglomerates could resume purchases of palm oil products from the company.
Global food giants Nestle SA (NESN.VX) and Unilever NV (
UN), as well as U.S.-based fast food chain Burger King Holdings Inc. (BKC),
are on the long list of food companies that has suspended sourcing of palm oil
from Smart in response to claims by Greenpeace that the producer is involved in
deforestation.
In August, Smart issued results from an independent
audit--carried out by the Control Union Certification and the British Standard
Institute--refuting charges by environmental group Greenpeace that it had
cleared large swathes of land with high conservation value and drained peat
lands to cultivate palm crop.
Smart said the audit provided evidence that
"the firm had operated responsibly and within the laws and regulations set out
by the Indonesian government," but BSI said subsequently that some aspects of
its report were misreported, and that Smart had set up plantations on deep peat
in two estates.
RSPO said on its website that its grievance panel had
written to Smart and its parent firm, the Singapore-listed Golden Agri Resources
Ltd (E5H.SG), about the breaches revealed by the auditors. Golden Agri is not a
member of the RSPO.
The industry body has urged Golden Agri to stop
announcing publicly it was in the process of obtaining RSPO certification for
its estates or that it planned to become a RSPO member.
"Golden Agri is
not a member of the RSPO, nor has the RSPO yet received a membership application
from the company. The panel encourages Golden Agri to submit a full and complete
application for membership (and) documentation RSPO would need in order to
review the application," the agency said.
Palm Oil Body RSPO Rebukes Indonesia's Smart On Sustainability
Claims
KUALA LUMPUR -(Dow Jones)- The Roundtable On Sustainable
Palm Oil, an industry organization that groups palm producers, environmental
groups and food companies, said Thursday that Indonesia-based Sinar Mas Agro
Resources & Technology (SMAR.JK) has breached its policies and that the
firm's membership in the group is at risk.
"Members who have been found
to not be in compliance and who continue to be in noncompliance with the RSPO
regulations could ultimately face sanctions, including the suspension and,
eventually, the termination of their membership of the RSPO," it
said.
The comments by RSPO could diminish Smart's hopes that global
conglomerates could resume purchases of palm oil products from the company.
Global food giants Nestle SA (NESN.VX) and Unilever NV (
UN), as well as U.S.-based fast food chain Burger King Holdings Inc. (BKC),
are on the long list of food companies that has suspended sourcing of palm oil
from Smart in response to claims by Greenpeace that the producer is involved in
deforestation.
In August, Smart issued results from an independent
audit--carried out by the Control Union Certification and the British Standard
Institute--refuting charges by environmental group Greenpeace that it had
cleared large swathes of land with high conservation value and drained peat
lands to cultivate palm crop.
Smart said the audit provided evidence that
"the firm had operated responsibly and within the laws and regulations set out
by the Indonesian government," but BSI said subsequently that some aspects of
its report were misreported, and that Smart had set up plantations on deep peat
in two estates.
RSPO said on its website that its grievance panel had
written to Smart and its parent firm, the Singapore-listed Golden Agri Resources
Ltd (E5H.SG), about the breaches revealed by the auditors. Golden Agri is not a
member of the RSPO.
The industry body has urged Golden Agri to stop
announcing publicly it was in the process of obtaining RSPO certification for
its estates or that it planned to become a RSPO member.
"Golden Agri is
not a member of the RSPO, nor has the RSPO yet received a membership application
from the company. The panel encourages Golden Agri to submit a full and complete
application for membership (and) documentation RSPO would need in order to
review the application," the agency said.
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