Economic Development

a. The Development of High Yield Rubber Plantations

Adaro’s operational area has shown to have high potential for rubber plantation development. Higher yield rubber trees are planted to utilize idle land or to replace plantation areas which are no longer productive.

Through a Business Development Institute set up by Adaro and its partners, the farmers are trained and
educated on rubber cultivation and the techniques to improve crop quality and the management of a rubber smoking station.

The training program commenced in 2007 in Balangan Regency, Tabalong Regency, and East Barito Regency with an initial area of 1,251 hectares with 693 farmers undergoing training. The program has been running continuously since then and as of 2009, the Institute’s training program had reached 4,849 farmers with a total of 4,350 hectares under cultivation.

b. Micro Financing Institute

The Micro Finance Institute (Banua Bauntung) was established with the objective of providing capital access for micro up to medium sizes enterprises (MSME’s) in various sectors such as trading, services, agriculture, plantation development, animal husbandry, and home industries. The Institute is expected to serve as an intermediary micro financial institution for MSME’s, improve cooperation with its customers, government, and the community, and strengthen human resources quality and its capital structure.

Lending activities started in 2005, soon after its establishment and the Institute now has offices in four regencies: Tabalong, East Barito, South Barito, and Balangan.

Loan Development from 2005 to 2009 (in Millions of Rupiah)
Year	The amount of Financing	Number of Clients
Year 2005	1,403	1,951
Year 2006	5,221	5,398
Year 2007	6,415	5,833
Year 2008	8,522	5,406
Year 2009	7,965	4,217

As of the end of 2009, the total fund allocated was Rp29.5 billion for 22,805 customers – these figures include outstanding and repaid loans.

 

A villager receives a loan through Micro Finance Institute.

c. Integrated Agricultural Program

Adaro has developed an integrated agricultural program for enhancing livestock and poultry rearing that works in conjunction with crop development for animal feed and the production of biomass and bioliquids from livestock and poultry waste that is used as fertilizer on reclaimed mining areas and nursery areas to grow plants and cover crops for land reclamation and for animal fodder.

The objectives of this Integrated Agricultural Program are to:

1. Set a model of integrated agricultural management for the surrounding community;
2. Create employment and business opportunities;
3. Establish cooperation with various counterparts as the first step to creating partnerships with the community; and
4. Serve as the learning facility for the community surrounding the operational area.

The program has shown satisfying results with the following progress achieved as of 2009:

Number of Balinese cows	grown from 100 cows to 190 cows
Superior cows	grown from 288 cows to 325 cows
Broiler chickens	18,000 chickens per hatching cycle
Fertilizer production	70 bags / day
Bio Gas	1 unit
Revegetated area	38.8 ha
Workers	34 people

This self-sustaining agricultural program is a prime example of Adaro’s commitment to establish a community that is independent in the aspects of business, education, and management.

In 2009, Adaro won the following recognition from the Ministry of Social Affairs for its economic development programs:

1. KSN Awards 2009, Platinum Award, category: Economy/Partnership – Micro Financing Institution,
   Program: Banua Bauntung Microfinance - Paringin Branch
2. CSR Awards 2008, Gold Award, category: Social and Environment – Integrated Agricultural Program

 

Superior cows have grown in number from 288 to 325
through Adaro’s integrated agricultural program.