-- Total fruit production for Q2 2013 was 15,544 tonnes, 30% higher than Q2 2012.-- Palm oil production for Q2 2013 was 2,913 tonnes, 36.2% higher than Q2 2012.-- Replanting of oil palms for Q2 2013 was 2,030 ha, 32.6% higher than Q2 2012.-- Record quarterly Fresh Fruit Bunch ("FFB"), Crude Palm Oil ("CPO") production and hectares planted since Feronia completed the acquisition of PHC in 2009 and commenced the turnaround of the operation-- All major construction work now completed at Yaligimba palm oil mill. Final testing underway and oil production expected imminently.-- Appointment of new Managing Director of PHC in April 2013.
Arable Farming Operations
As at and for the six monthsArable ended June 30---------------------------------------------------------------------------- 2013 2012Land Available (ha) 10,000 10,000Land Cleared (ha) 2,000 2,000Land Prepared (ha) 1,700 1,700Land Planted (ha) 0 505
-- Commenced selling rice grown on its farm to Bralima, Heineken's wholly- owned DRC subsidiary and local food wholesaler Ets Kuku.-- As at June 30, 2013, the Company's Arable Farming operation sold 350 tonnes of rice to Bralima and 8.75 tonnes to Ets Kuku which resulted in it recording its first revenues of $279,000.-- Rice planted in October 2012 and harvested in February, March and April 2013 demonstrated in-field yields of approximately 4 tonnes of paddy rice per ha. Yield per ha declined as the harvest progressed due to in- field losses caused by the protracted harvest period and insufficient harvesting machinery to complete the harvest in the optimum time period.
The Company's strategy for its oil palm plantations business continues to be to maximize returns from existing plantings while investing in new plantings and the required processing capacity. CPO production at the new palm oil mill at Yaligimba is expected to commence imminently and will provide the Company with access to an additional 3,757 ha of mature oil palms for the production of CPO, an increase of 62.1% from the area currently accessible.
The Company has made progress in establishing commercially viable rice yields at its arable operation, has established a pricing formula and is making sales to high quality local counterparties. This furthers our confidence in the favorable dynamics of the local rice market. The Company is currently evaluating how to prudently expand its arable farming operation in light of these recent positive developments.
In summary, the key objectives of the Company for 2013 are as follows:
i. commence production of CPO at Yaligimba thereby enabling the Company to harvest and process fruit grown at that location;ii. re-plant up to 5,000 ha across its oil palm plantations (3,473 ha replanted as at August 19, 2013); andiii.prudently advance its arable farming operation.
As previously disclosed by the Company, on December 24, 2011, the government of the DRC promulgated a new law, "Loi Portant Principes Fondamentaux Relatifs a L'Agriculture" (the "Agriculture Law"), for the stated purposes of developing and modernizing the country's agricultural sector. Feronia continues to seek clarification on the implications of this legislation from local counsel and government in the DRC. If the Agriculture Law is interpreted by the DRC government to apply to the existing concession rights held by the Company and the Agriculture Law is not amended, it could have a material and substantial adverse effect on the value of its business and its share price. In such case, Feronia may be required to sell or otherwise dispose of a sufficient interest in its operating subsidiaries so as to ensure that it meets local ownership requirements. There is no assurance that such a sale or disposition would be completed at fair market value or otherwise on acceptable terms to Feronia. Please refer to the Company's Management Discussion and Analysis for the three months ended June 30, 2013 available on www.sedar.com for a full discussion on the Agriculture Law.