The Company also owns the Yaligimba Research Station, one of Africa's pre-eminent oil palm seed research and breeding operations. The Yaligimba Research Station supplies PHC with all of the oil palm seeds required for its replanting programme and undertakes research into increasing oil palm yields and optimal fertilizer regimes. The seeds provided by the Yaligimba Research Station are resistant to fusarium Wilt, a soil-born fungal disease that is prevalent in Africa. The Yaligimba Research Station also sells both fusarium wilt resistant and non-resistant seed varieties to third party customers.
Recent developments in the oil palm operations
As previously reported, harvesting at the Yaligimba plantation was suspended at the beginning of Q1 2012 once the short-term strategy to barge fruit from the Yaligimba plantation to the Lokutu plantation was proven to be uneconomical and will recommence upon completion of the Yaligimba palm oil mill. As a result, Yaligimba did not contribute to Fresh Fruit Bunches ("FFB") or Crude Palm Oil ("CPO") production in either Q1 2013 or Q1 2012.
The total number of producing hectares (excluding Yaligimba) at March 31, 2013 was 5,952 ha (March 31, 2012: 6,310 ha). The year-on-year reduction of 358 ha is a result of 651 ha of palms over 25 years old being removed and 293 ha of young palms coming into production.
The total tonnage of fruit production was 9,550 tonnes for the three months ended March 31, 2013, 13% lower than the 10,975 tonnes produced during the corresponding period in 2012. The lower level of production is due to less density of fruit at the Lokutu plantation resulting from a proportion of trees being in a male flowering phase during Q1 2013. This phase, which arises periodically, has since passed and the shortfall experienced in Q1 2013 has subsequently been made up.
Replanting of oil palms commenced in March 2013 in line with rainfall patterns, with 442 ha planted by March 31, 2013 (Q1 2012: 264 ha) representing the replanting of approximately 71,000 trees (Q1 2012: approximately 42,000 trees). Year-to-date as at May 22, 2013 the Company had replanted 1,757 ha representing the replanting of approximately 281,000 trees. The size of Feronia's workforce has been and will be a key factor in delivering on its objective to replant 5,000 ha representing approximately 800,000 trees this year.
The oil produced by the Company is of a high quality with the average Free Fatty Acid ("FFA") content of oil sold at 2.17% (Q1 2012: 2.3%).
At March 31, 2013, the Company employed 3,564 staff in its palm oil operations (March 31, 2012: 3,701), more than would typically be required for a palm oil business with production at Feronia's current levels. However, the Company recognises the considerable amount of knowledge and skill held within its workforce and believes it is a tremendous asset. While a large proportion of the workforce is currently utilised in Feronia's replanting program, a sufficient portion of the workforce has the skillset to be re-allocated to harvesting operations as the Company's producing hectares increase.
The Company also has in place a Management Training Programme to develop management capabilities and skills across four areas - agronomy, finance, technical (engineering) and personnel. The Company believes this is essential to ensure the development of skills through the organisation and is a key part of the Company's succession planning. The two year programme is open to Congolese nationals under 33 years of age with relevant qualifications and experience with successful applicants required to pass a technical examination and interview. Participants are also subject to ongoing assessment. The 2013 programme, which starts in June 2013, has an intake of 10 people.
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