DSNG Partner Cooperatives Obtained Loan from Bank Mandiri

JAKARTA, SEPTEMBER 26, 2020 - Five farmers’ cooperatives of PT Dharma Satya Nusantara Tbk (“the Company”, “DSNG”) obtained financing of Rp 202 billion from PT Bank Mandiri (Persero) Tbk (“Bank Mandiri”) to refinance the development of smallholders’ sustainable oil palm plantations in Muara Wahau, East Kalimantan.
 
The five farmers’ cooperatives are the Min Sun Lekut Cooperative, the Gerdabang Agri Center Cooperative, the Harapan Baru Cooperative, the Sawitan Surya Cooperative and the Usaha Baru Cooperative. The total area owned by those cooperatives reach 2,600 hectares and located nearby the Company's plantation area in Muara Wahau, East Kalimantan.
 
The loan signing ceremony was held on Thursday, 24 September 2020 in Sangatta by Bank Mandiri and the executive board of the Cooperatives. The loan is a manifestation of the National Economic Recovery program (PEN) launched by the government to support the micro economy, small and medium enterprises (MSMEs) during the Covid-19 pandemic and has a 5-year tenor with an interest rate of 9.5% per year.
 
The President Director of the Company, Andrianto Oetomo, mentioned that the financing from Bank Mandiri to the farmers’ cooperatives took a form of direct bank loans, whilst the Company's subsidiaries acted as the guarantors in their capacity as the nucleus partners.
The loans were utilized to pay off the debt of the farmers cooperatives to the Company's subsidiaries relating to the development of their plasma oil palm plantations, previously funded by the Company's subsidiaries. The proceeds from this debt repayment is expected to reduce the Company's net gearing level.
 
“The loans granted to the farmers’ cooperatives demonstrated some trusts from the national banks on the partnership program developed by the Company based on a mutually beneficial and sustainable partnership with the smallholders,” he said after the signing of loan agreements.
 
 
According to Andrianto Oetomo, the Company has committed to develop and fund the development of plasma plantation since its establishment by involving smallholders in the surrounding operating area.  As a result, the plasma plantation can be managed and certified in accordance to the nucleus’ standards.
 
As of June 30, 2020, the total planted area of the Company has reached 112,450 hectares, with the size of plasma plantations totaling to 27,884 hectares or about 33% against nucleus plantation. Total cooperatives that have been involved in the Company’s supply chains were 57 cooperatives as of the end of 2019 and plasma plantations contributed around 339,400 tons FFB from total FY2019 FFB production of 2.2 million tons.
 
"We have a serious commitment to involve the community in the supply chains of our palm oil business which are operated under our sustainability principles, by empowering and improving the welfare of smallholders surrounding our plantation area," he said.
 
In addition, the Company also facilitates and supports the farmers’ cooperatives in practicing transparency and accountability by conducting Annual Member Meetings (RAT), providing training and financial management consultations, facilitating the compliance with the insurance and social security program (BPJS) as well as submission of the annual tax returns in relation to obligations of Taxable Entrepreneurs (PKP).
 
Previously, the Company also received a funding from &Green, a globally-focused impact investment fund financing sustainable commodity production to protect tropical forests.  The fund requires the Company to promote the social inclusion of smallholder farmers by means of the Environmental and Social Action Plans (ESAP) to manage the concessions sustainably within dynamic social and economic settings.
 
In addition, the 10-year loan of US$ 30 million from &Green also requires the Company to commit in full implementation of NDPE throughout the group and the supply chains, including smallholder farmers, by 2025.
 
“We understand our responsibilities for not only earning economic profit, but also creating positive impacts on the ecosystem which supports our business,” said Andrianto Oetomo as his closing remarks. 
 
ABOUT PT DHARMA SATYA NUSANTARA Tbk
 
PT Dharma Satya Nusantara Tbk (DSN Group) was established on 29 September 1980 and engaged in palm oil and wood products industry. Currently, DSNG has planted area of112,450 hectares and 10 palm oil mills that process Fresh Fruit Bunches (FFB) into CPO with the capacity of 570 tons per hour. In wood product segment, DSNG has two wood processing plant in Central Java that produce panel and engineered floorings.
 
FOR FURTHER INFORMATION
 
Paulina Suryanti 
Corporate Secretary 
PT Dharma Satya Nusantara Tbk 
Jl. Rawa Gelam V Kav. OR/3B 
Kawasan Industri Pulogadung 
Jakarta 13930, Indonesia 
Email: corporate.communications@dsngroup.co.id