Asia Palm Oil Magazine Vol 6 No 4 by fbipublicationsmalaysia

Vol. 6 No. 4, JAN - MAR 2018

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Happy New Year. In the January 2018 issue of Asia Palm Oil Magazine, we discuss that palm oil is in for a rough time, with the industry set to experience a bearish 2018. This, according to experts, comes on the back of a number of factors such as labour shortages, improved palm oil yields amid lower shortterm demand from Malaysia’s traditional export markets, poor weather conditions and, in the longer term, fallout from the European Union’s ratification of an import ban on palm oil-based biofuels. Another highlight in this issue is about Indonesia government replanting oil palm trees on 9,109.29 hectares of land owned by local growers in North Sumatra to help increase the productivity of the plantations.

PUBLISHER FBI Publications (M) Sdn Bhd GENERAL MANAGER Charlyne Lee charlyne@fireworksbi.com PUBLICATION MANAGER Vanny Lim my@fireworksbi.com MARKETING COMMUNICATION Nur Izyan binti Dzulkifli izyandzul@fireworksbi.com CREATIVE Fifi Amira EDITORIAL CONSULTANTS Kenny Yong BOARD OF DIRECTORS Kenny Yong Susan Tricia Mervyn Yong CONTRIBUTORS IBG Manufacturing Sdn Bhd MPOCC OFFICIAL MAGAZINE OF:

We had a chat with Dr H.J.M. (Rian) Visser, Coordinator of PALMARES. Turn to our Cover Story to find out what is PALMARES’s development plan in Malaysia and how does it help to contribute in Malaysia palm oil industry. PMT Industries Sdn Bhd is featured in this issue’s In The Hot Seat. Topics discussed include the important element(s) that drive the company in achieving today’s results, challenges and competitiveness encountered throughout the year. Flip to find out more.

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On behalf of the editorial team, I thank you for your continuous support to Asia Palm Oil Magazine. Do also stay in touch with us on www.asia-palmoil.com and follow us on Facebook and LinkedIn.

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I wish everyone a prosperous and fruitful year ahead. Thank you. Editor, Charlyne Lee

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Jan - Mar 2018

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CONTENTS 6

Jan - Mar 2018

GREEN SOLUTION

INTERNATIONAL NEWS 28

Japan-Bound Khmer Palm Oil Set For Next Year

Fuji Oil To Build Malaysian Palm Oil Factory With Local Partner

Commerce Ministry Held Trade Mission To Egypt, With Coffee And Palm Oil As Mainstay Products

Schütz Announces The Acquisition Of Envases y Laminados, S.A. de C.V. in Mexico

Wilmar And ING Collaborate On Sustainable Loan In Asia

Procurement Corner

Comitted To Improve Livelihood Of Palm Oil Smallholders

REFINERY NEWS

JJ-Lurgi Broadens Foothold In Indonesia

CPOPC. Promote Sutainability Efforts As Well

ORGANIZATION NEWS

SPECIAL INSIGHT 42

Headwinds Abound For Palm Oil

FGV: Eight Palm Oil Mills To Be RSPO-Certified By Year End

National CSPO Tops Agenda For Malaysia Export

Keeping An Eye On Export Competitiveness

IOI To Allocate RM1BIL For Investments

MSPO Certification: The Way Forward For The Malaysian Palm Oil Industry

Boustead Unit To Replant Sabah Land

Indonesia Replants Oil Palm Trees On 9,109-Ha Land In N Sumatra

THE PLANTER’S CORNER 58

Youths Encouraged To Join Plantation And Commodity Sector

Addressing Agricultural Pain Points With Tech

Recruitment Restructuring Crucial In Oil Palm Industry

IBG Biofertilizer Rehabilitate Soil Health And Vitaly

Punjab’s Unrealistic Edible Oil Plans

IN THE HOT SEAT

COVER STORY 40

‘Borneo Atlast’ To Help Palm Oil Buyers Check On Forest Damage

Interview With Dr Kalyana Sundram, CEO Malaysian Palm Oil Council

INDUSTRY NEWS 16

Interview With Dr. H.J.M. (RIAN) Visser, Coordinator Of PALMARES ASIA PALM OIL MAGAZINE

Interview with PMT Industries Sdn. Bhd.

ASIA PALM OIL MAGAZINE

DID YOU KNOW ?

FBI IN ACTION

66 EUMCCI 2017

MAH: Consider Oil Palm Trunk For Furniture Industry

TECHNOLOGY & PRODUCT NEWS 56

Agritech Businesses In Race To Protect Farmers From Cyberthreats

68 The 7th ICIS Surfactants Conference 70 PIPOC 2017 72 PALMEX Indonesia 2017

Jan - Mar 2018

ORGANIZATION NEWS

WILMAR AND ING COLLABORATE

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ON SUSTAINABLE LOAN IN ASIA

FIRST IN PALM OIL INDUSTRY TO PEG ITS SUSTAINABILITY PERFORMANCE TO INTEREST RATE OF AN EXISTING FACILITY

ilmar International Limited (Wilmar) has partnered with ING to convert a portion of its existing bilateral, committed Rev -olving Credit Facility of USD 150 million with the bank into a sustainability performance-linked loan. Wilmar is the first company in Asia to work together with ING to couple its sustainability performance to a loan. This collaboration is also the first of its kind in the palm oil industry. Wilmar has committed to improve aspects of its environmental, social and governance performance. Progress will be measured by Sustainalytics, and if the performance milestones are met, the interest rate for part of the loan will be reduced for the following year. Sustainalytics, a leading provider of environmental, social and corporate governance research and ratings, will track the company’s performance for a customised package of different Environmental, Social and Governance (ESG) indicators. “Sustainability is a priority at Wilmar and we are constantly seeking improvements in our sustainability performance. Our collaboration with ING dovetails Wilmar’s commitment to a responsible business. We believe that incorporating sustainability metrics into

Jan - Mar 2018

every aspect of our business, from daily operations to corporate financing, is key to creating value for our stakeholders,” said Ho Kiam Kong, Chief Financial Officer of Wilmar. The concept for this sustainability loan heralds a new approach for the green loans industry by encompassing not just environmental, but also social and governance aspects. It is not only aimed at sustainability leaders; by providing a financial incentive, it is also for corporations who are keen to improve their ESG performance. Furthermore, the concept is suitable for companies who are at different stages of their sustainability journey as it can be customised according to their requirements.

“We are delighted to bring this innovative sustainability product to our customers in Asia Pacific. We appreciate the commitment and market leadership from Wilmar to get on board with the concept. We have a strong pipeline of sustainability deals and will continue to find innovative ways to empower and support our clients in their sustainability journey,” said Gerrit Stoelinga, CEO for ING Wholesale Banking Asia.

ING has worked with eight clients in Europe on similar sustainability improvement loans since March 2017. These include syndicated deals with a health technology company, a chocolate and cocoa producer as well as a bilateral loan with a gas and electricity company.

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ASIA PALM OIL MAGAZINE

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ORGANIZATION NEWS

COMMITTED TO IMPROVE LIVELIHOOD OF PALM OIL SMALLHOLDERS

provided access to agricultural inputs such as fertilisers, seeds, and nursery management. In response to the urgent and pressing global call for sustainably-produced palm oil, the RSPO was formed in 2004 with the objective of promoting the growth and use of sustainable oil palm products through credible global standards and engagement of stakeholders.

“While RSPO has worked to support smallholders over the years, we recognise that we’re yet to provoke large-scale inclusion of smallholders which RSPO and our stakeholders desire. However, certification has a significant impact on improving the livelihood of smallholders and interventions through this programme will be scaled up to the jurisdictional level; enabling these smallholders to achieve RSPO certification,” he added. In Seruyan (Central Kalimantan), the sole purpose of the project is to develop an agricultural facility to provide direct support and training for capacity building for more than 1,000 smallholder oil palm farmers. In Sabah, a set of four intervention activities will be attempted for trials in 20 villages across the state. Throughout these initiatives, smallholders will develop knowledge and capacity on good agricultural practices and other key principles of sustainable agriculture as well as being

he United Nations Environment Project (UN Environment) and the Roundtable on Sustainable Palm Oil (RSPO) are committed to improving the livelihood of palm oil smallholders.

The project was selected for funding through a 10Year Framework of Projects (10YFP) Trust Fund open call for proposals in close collaboration with Sustainable Food Systems Programme.

Thus, the UN Environment and RSPO have signed a small-scale funding agreement (SSFA) that aims to support oil palm smallholder farmers toward improved livelihood and sustainable production.

“The 10YFP is a global framework of action to enhance international cooperation to accelerate the shift towards sustainable consumption and production (SCP) in both developed and developing countries. The Trust Fund is managed by the 10YFP Secretariat hosted by the United Nations Environment Project.”

“A total funding of USD199,611 from the 10YFP Trust Fund administered by UN Environment and matching funding of USD83,683 from RSPO will be distributed between smallholder farmers in the regions of Sabah, East Malaysia and Seruyan, Central Kalimantan over the course of the two-year project. It is estimated that the success of the project will improve the livelihoods of at least 50,000 schemed and independent smallholders in Sabah, and over 5,300 independent smallholders in Seruyan,” RSPO said in a statement issued recently.

Jan - Mar 2018

The seat of the association is in Zurich, Switzerland, while the secretariat is currently based in Kuala Lumpur with satellite offices in Jakarta, London and Zoetermeer (NL). RSPO is a not-for-profit association that unites stakeholders from seven sectors of the palm oil industry – oil palm producers, palm oil processors or traders, consumer goods manufacturers, retailers, banks and investors, environmental or nature conservation NGOs and social or developmental NGOs – to develop and implement global standards for sustainable palm oil. Such multi-stakeholder representation is mirrored in the governance structure of RSPO such that seats in the Executive Board and project-level Working Groups are fairly allocated to each sector. In this way, RSPO lives out the philosophy of the ‘roundtable’ by giving equal rights to each stakeholder group to bring group-specific agendas to the roundtable, facilitating traditionally adversarial stakeholders and business competitors to work together towards a common objective and make decisions by consensus. Source: The Borneo Post

RSPO Strategic Projects director Yohanes Izmi Ryan said he was eager to get the project started and to see smallholder farmers receive such essential support. “Smallholders play a significant role in the supply chain, producing around 40 per cent of the world’s palm oil but suffer from lower yields, a lack of best management practices, and ultimately struggle to achieve international market access,” he said.

ASIA PALM OIL MAGAZINE

Jan - Mar 2018

Palm Oil Sustainability

integrated management of organic matter

CPO

JJ-LURGI BROADENS FOOTHOLD IN INDONESIA

Ferti-irrigation

growth in the emerging market of South-East Asia’s largest economy.”

JJ-Lurgi has successfully delivered more than 300 process plants across China and South-East Asia. This mega project now adds another milestone to JJ-Lurgi’s growth in Indonesia and strengthens the company’s reputation as a reliable technology provider with strong engineering capabilities.

Situated in Dumai on the Indonesian island of Sumatra, the plant uses sustainably-sourced palm kernel oil, and will serve the international markets including Asia and Europe.

Heinrich Jessen, Chairman of Jebsen & Jessen (SEA), said, “Indonesia has always been a key market to us, and we are pleased to complete delivery to one of the world’s most important palm oil producer. With the completion of this project, we continue to look forward to new challenges and

Jan - Mar 2018

Of the plant’s 200-kilotonne annual capacity, about 160 kilotonnes will be used for fatty alcohol, a key ingredient of personal care products and liquid soaps. The balance capacity of 40 kilotonnes will be used to produce fatty acids, which will be used for powder detergents and glycerine, and the plant is designed to accommodate changes in the capacity ratio.

Jakob Helms, Managing Director of JJ-Lurgi, commented, “This new plant demonstrates our engineering and technical expertise in oleochemical, and our success in the growing commodity market of Indonesia puts an additional feather in our cap. We are very proud of our achievements in Indonesia.”

ASIA PALM OIL MAGAZINE

TERNATI O C IN TE I N N E R

L NA

ebsen & Jessen (SEA) is proud to announce its joint venture JJ-Lurgi has successfully delivered a 200-kilotonne-per-year oleochemical plant in Indonesia to Sinar Mas Cepsa (a joint venture between Golden Agri, the palm oil unit of Indonesia’s Sinar Mas group, and Spain-based oil and gas group Cepsa). JJ-Lurgi’s completion of this plant gives Sinar Mas, the world’s second-largest palm oil producer, its first major downstream fatty alcohol facility.

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JJ-LURGI COMPLETES DELIVERY OF 200-KILOTONNE OLEOCHEMICAL PLANT TO SINAR MAS CEPSA

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ORGANIZATION NEWS

Customer:

Palm Oil Producer with excess fuel.

CPOPC: PROMOTE SUSTAINABILITY EFFORTS AS WELL T

he Council of Palm Oil Producing Countries (CPOPC), in a reply to Netherland’s flag carrier KLM’s sustainable catering policy, is suggesting that the airline also consider supporting Indonesia’s effort in replanting high-yielding oil palm plants for smallholder farmers. The move is to preserve the ‘land bank’ of Indonesia while meet the growing demand for vegetable oil in the global economy, said CPOPC executive director Mahendra Siregar in the letter. “This is fully in line with the Sustainable Development Goals (SDGs), and please do not hesitate to contact our services should you require more information on the sustainability efforts being undertaken in Indonesia and Malaysia in the palm oil sector,” he said in reply to an article published in KLM’s inflight magazine which demanded that all its suppliers avoid using palm oil in their products. Malaysia and Indonesia produce 85 per cent of global palm oil supply.

Jan - Mar 2018

On Nov 23, CPOPC rebutted the KLM’s article amid its misguided information on palm oil. KLM, in replying to the rebuttal, said it was part of the airline’s sustainable mission to contribute to the global ambition of reaching SDGs. “At KLM, offering responsible products and services is part of our CSR (Corporate Social Responsibility) approach. We are serving around forty million meals a year to our passengers, which gives us the responsibility to make our catering as sustainable as possible.

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The customer turned to Elliott to develop a flexible energy plant for two palm oil mills using empty fruit bunches as fuel. Elliott’s steam turbine generators provide 7000 kWe of low-cost, clean, renewable electricity, enough to power the entire industrial estate. Who will you turn to?

“We choose where possible, for products and partners that share our sustainable mission, in order to contribute to the global ambition of reaching the sustainable development goals,” said KLM Director for CSR & Environmental Strategy I.R Pieter. Mahendra said while KLM’s commitment towards SDGs was commendable, the airline should also make informed decisions. Source : Bernama

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ASIA PALM OIL MAGAZINE

T U R B I N E S

ASIA PALM OIL MAGAZINE

G L O B A L

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Jan - Mar 2018

INDUSTRY NEWS

HEADWINDS ABOUND FOR PALM OIL

the European food sector will remain,” says Tjakra. “But having said that, the EU imports roughly seven million tonnes of palm oil from various global sources. And biofuels make up roughly 3.5 million tonnes. So, the lost business will still be significant.” In March, the EU parliament overwhelmingly voted to phase out the use of vegetable oils in biodiesel, alleging that the oils are produced in an unsustainable fashion and leads to deforestation. The resolution calling for the ban included palm oil. The ban is not immediate, however. According to Tjakra, the EU parliament will vote on the ratification twice more (at end-November and in January 2018) before the resolution can be passed. “Unfortunately, these kinds of major government motions will not be overturned at a moment’s notice. I do expect that the ratification of the ban will take place eventually. In fact, I was in Bali recently for the Indonesian Palm Oil Conference and its trade minister remarked that Indonesia may retaliate against the EU by banning the import of European milk powder,” says Tjakra.

alm oil is in for a rough time, with the industry set to experience a bearish 2018. This, according to experts, comes on the back of a number of factors such as labour shortages, improved palm oil yields amid lower short-term demand from Malaysia’s traditional export markets, poor weather conditions and, in the longer term, fallout from the European Union’s ratification of an import ban on palm oil-based biofuels. Oscar Tjakra, a senior analyst at RaboResearch Food and Agribusiness, tells Personal Wealth that palm oil prices will fall slightly this year. “We should see palm oil yields improve in the fourth quarter of this year compared with last year. That is because we had to contend with the El Nino weather phenomenon at end-2016. This, coupled with the fact that a number of major palm oil export markets are in the midst of winter — a seasonal low for palm oil demand — means that we will see a little downward pressure on palm oil prices for the rest of this year.”

Jan - Mar 2018

Tjakra expects more of the same in 2018. “I am quite bearish on the palm oil fundamentals for next year. Prices will fall lower than they have this year as palm oil yields continue to normalise. So, I suppose while there is good news in that there will be more palm oil to be sold, the bad news is that supply will exceed demand next year.” The demand for palm oil next year will be “pretty much flat”, with Tjakra expecting growth in exports to come from just one of Malaysia’s traditional export markets — India. “India’s recent soybean oil production was not very good due to a lack of rainfall during the last monsoon. So, the demand for palm oil from India will increase next year. As for the rest of Malaysia’s traditional buyers, however, the demand will be quite flat,” he says. Although the fundamentals are looking poor for next year, Tjakra points to a number of external factors that he thinks may ease the downward pressure on Malaysia’s palm oil sector. “There is some worry that La Nina weather patterns will have a negative

effect on soybean oil production in South America. Also, the price of crude oil has been on the rise lately, albeit in small increments. These two factors may help Malaysia’s palm oil sector next year,” he says. “Also, Malaysia’s ongoing labour shortage could turn out to be a blessing in disguise. In theory, had the country’s palm oil sector been operating at full employment, its output would have been even higher, and that would have worked out poorly with the current drop in demand for palm oil. So, these are some external factors that may ease the pressure on palm oil. But speaking purely on the palm oil fundamentals, I am still quite bearish for 2018.” In the longer term, Malaysia’s palm oil sector will face some challenges. The upcoming EU ratification to ban the import of palm oil-based biofuels will present a significant longer-term challenge for the country. “We must first be clear on the EU ratification itself. The EU ratification on the ban only extends to the import of palm oil-based biofuels. So, the import of palm oil for

ASIA PALM OIL MAGAZINE

Malaysia has come out strongly against the ban. Last month, Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong issued a statement chastising the EU for attempting to ban the import of palm oil-based biofuels. “We note that the European Parliament Resolution on Palm Oil and Deforestation adopted on April 4, 2017, is non-binding in nature. Malaysia is disappointed that the proposals put forth in the EU parliament resolution on deforestation are being enacted by the Commission through the formal, binding, EU regulatory process,” says the statement. “The Malaysian government will take any action necessary to protect the rights of 650,000 Malaysian oil palm small farmers and to secure the future of the palm oil sector that has lifted millions of Malaysians out of poverty. Protectionist discrimination against Malaysian palm oil exports will not be tolerated.”

ASIA PALM OIL MAGAZINE

Although the ban is only expected to take effect in 2021, according to Tjakra, he believes that the Malaysian government and palm oil sector needs to move to cushion the blow that is to come. “I would identify Africa as a new frontier market for palm oil. The demand for palm oil is huge in West and East Africa. If the Malaysian government could pave the way for local companies to start exporting to Africa, that would be good. But at the moment, import taxes in Africa are quite high, so the Malaysian government could negotiate for lower import tax rates for palm oil,” says Tjakra. Another strategy to make up the impending shortfall would be to develop a robust local biofuel market right here in Malaysia. “Indonesia has managed to do this in the last few years. But the problem right now is that crude oil prices are relatively low. So, subsidies and incentives from the Malaysian government will be required to make palm oil-based biofuels more attractive,” says Tjakra. Stock analysts are generally bearish on local stocks, but like Tjakra, they see limited short-term effects arising out of the EU ratification of the ban on the import of palm oil-based biofuels.

An analyst with UOB Kay Hian believes that the recent uptick in crude palm oil (CPO) prices will only have a limited positive effect on share price movements. “We have not seen a proportionate increase in share prices, even though CPO prices have picked up to about RM2,800 per tonne [as at November] from around RM2,500 [in July]. That is because current valuations are already a bit rich, in addition to the fact that the market on the whole is anticipating a bearish 2018.” A Public Investment Bank Bhd analyst thinks that CPO prices will drop to RM2,500 per tonne in 2018 for two key reasons. “I see higher inventories of palm oil in the coming months due to the strong recovery in palm oil production. Also, a recovery in the ringgit later this year will drag CPO prices down. “Under the circumstances, I would recommend Ta Ann Holdings Bhd, Sime Darby Bhd and Genting Plantations Bhd. All three stocks are benefiting from the young age profile of their palm oil crop, strong growth in their fresh fruit bunch production and attractive valuations.” Source: The Edge Markets

Jan - Mar 2018

Know what you are planting NOW

FGV: EIGHT PALM OIL MILLS TO BE RSPO-CERTIFIED BY YEAR END

elda Global Ventures Holdings Bhd (FGV) expects to obtain the first Roundtable on Sustainable Palm Oil (RSPO) certification for eight of its palm oil mill complexes before the end of 2017.

This is subject to obtaining the necessary clearance from the RSPO audit process. “FGV is in the process of certifying its palm oil mill complexes to RSPO requirements. FGV plans to be RSPO certified within five years from 2017 to 2021,” it said in a statement today. Since withdrawing its principles and criteria certificate in May 2016, FGV said it and Felda have remained committed to the RSPO certification and taken the necessary measures to ensure that the sustainability aspects of the business are continuously monitored and enhanced. Today, FGGV announced that it has implemented a structured, systematic and customised training programme for its key stakeholders such as Federal Land Development Authority (Felda) employees, Felda settlers, third-party fresh fruit bunch (FFB) suppliers and FGV contractors. “The objectives of the training programme are in areas of Good Agricultural Practices, improving labour conditions and other sustainability practices throughout FGV’s palm oil value chain,” the group said. FGV group president and chief executive officer Datuk Zakaria Arshad said as part of FGV’s commitment to sustainability and strict criteria imposed by the market to curb deforestation, habitat destruction and labour exploitation, it is imperative that FGV engages with its key stakeholders in the

Jan - Mar 2018

palm oil value chain to keep them abreast with sustainability issues and drive change on the ground, while striving for long-term growth for the industry and community. In the first phase of the training programme that commenced in October last year up to 2017, FGV focused on a few categories of stakeholder groups, namely Felda employees, Felda settlers and FGV contractors. FGV said it has also been working closely with the Malaysian Palm Oil Board to train and increase Felda settlers’ knowledge on improving labour practices and Good Agricultural Practices to improve FFB yield, oil extraction rate and other relevant agricultural practices. “It is absolutely crucial for FGV’s contractors to embark on this sustainability journey with FGV to reap the benefits over the long term. Thus, FGV has performed a series of contractors’ training sessions in Malaysia involving more than 250 contractors on improving labour management practices in 2016 and 2017,” said Zakaria. More than 7,000 settlers have attended the RSPO and the Malaysian Sustainable Palm Oil awareness programmes. Felda settlers contribute at least 40% of FGV’s FFB supply base to FGV’s 70 mills located all over Malaysia. FGV shares closed up one sen or 0.56% at RM1.80 today, with 1.67 million shares done, bringing a market capitalisation of RM6.57 billion.

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INDUSTRY NEWS

NATIONAL CSPO TOPS AGENDA FOR MALAYSIA EXPORT

(CSPO).

“That is why our palm oil need certification to validate that our planters do not destroy the environment or kill the orang utans when we grow oil palm.”

alaysia is striving hard to attain the global recognition for its national certified sustainable palm oil

Mah also personally believe that a proper certification will instill discipline among planters on good agriculture practices.

“So how do we get 650,000 smallholders to embrace certification? The answer is MSPO, which is a home-based certification.”

This tops the agenda for Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong, who expressed optimism on meeting the targeted deadline for the mandatory Malaysian Sustainable Palm Oil (MSPO) certification for all palm oil industry players by end-2019.

He also said that roadshows on MSPO had been ongoing to explain on the certification because “most smallholders are fearful about the cost, auditing and other principles and criteria to be in compliance with the MSPO.” Mah admitted that he received a lot of criticism on the mandatory MSPO certification.

For Mah, the mandatory MSPO is a testimony that all the key aspects of sustainability are being put into producing Malaysia’s number one golden crop. The Government is serious about making the MSPO certification a reputable CSPO brand for the world markets, said Mah in an interview with StarBiz. By making the MSPO certification mandatory, he said: “This itself will reinforce Malaysia’s full commitment in producing and exporting CSPO for the global market.

Malaysia will also double its efforts to promote the MSPO certification aggressively overseas to ensure that it will be well accepted in the international market. To date, the world’s first CSPO certification – The Roundtable on Sustainable Palm Oil (RSPO) – is on a “voluntary” basis whereby most big Malaysian oil palm plantation companies are among its members. However, in the case of Malaysia, Mah pointed out that: “We have pledged to make the MSPO mandatory for all – this is not only for the big local plantation groups but particularly for over 650,000 palm oil smallholders nationwide.” To date, it is estimated that 4% of 244,622 ha of oil palm plantations, including 7,113 ha owned by smallholders and 22 palm oil mills in

“As the entire world is going towards sustainability, more consumers are demanding for certifications and traceability on where the produce or products come from.

Jan - Mar 2018

Based on these good traits, Malaysian palm oil will be widely recognised as of good quality and sustainably produced when it is fully mandatory. “My sincere wish is for our local certified sustainable palm oil to command a good premium price in the global market. In a sense that it will not be subjected to price competition but also widely recognised as the Malaysian palm oil (brand). That is why the focus on the mandatory MSPO is very important for me - added Mah. Source: The Star

“However, I believe that this is something the oil palm industry players including smallholders must do because we have no other choice.

Mah: My sincere wish is for our local certified sustainable palm oil to command a good premium price in the global market.from Malaysia and Indonesia. (Pix by ROSLIN MAT TAHIR)

Malaysia, are MSPO-certified since its introduction in early 2015. “Given the deadline for mandatory certification by end-2019, we hope to increase the numbers (for MSPO certs) especially among smallholders,” said Mah. Therefore, the Government is making a big commitment by allocating RM130mil as incentive to help smallholders obtain their MSPO certification for free. The incentive is expected to account for about 40% of the total of 5.7 million ha of oil palm plantations in Malaysia. Mah noted that his ministry is targeting about 500,000 ha of oil palm plantations to be MSPO-certified by end of this year and “the number is expected to further increase in 2018 and 2019.” According to Mah, the high cost involved to finance the CSPO auditing exercise has been the major issue even

with the RSPO certification –which is in euro that is way too expensive for local smallholders. “Our smallholders simply cannot afford the RSPO certification but with MSPO, the Government is easing smallholders’ financial burden by providing them with the auditing fees.” The auditing for over 600,000 smallholders would be a massive exercise and would be carried out in batches as it would involve close to two million ha of oil palm plantations, said Mah. “The RSPO has been in Malaysia for a long time but the take-up rate for its certification is low among smallholders. Why? This is simply because the RSPO conditions are mostly tedious and difficult to make it home-based and also very expensive.

ASIA PALM OIL MAGAZINE

Jan - Mar 2018

INDUSTRY NEWS

Is the technology rally of 2017 over?

KEEPING AN EYE ON EXPORT COMPETITIVENESS

“Technology was the runaway leader of the pack for the rally in the first half of 2017. While orders are still very strong for the industry, the spike in valuations has left them vulnerable to jittery investors who now hold them at high prices, and have little buffer for misjudgements. “Institutions with substantial unrealised investments wishing to lock in on profits may discover such relatively less liquid stocks are difficult to sell without causing undue volatility,’’ said Pong. With at least US$323bil in infrastructure spending in the pipeline in South-East Asia and potentially more expected over the next few years, 2018 could well shape up as the year of builders’ stocks, said Bloomberg. “Construction stocks may provide trading opportunities. Costs are often opaque; uncertainties such as weather and workers’ issues can cause expensive delays. “Landing lumpy jobs is not a sure bet of profitability. An overly successful tender book can be followed by a slow patch, when earnings can quickly tail off. “Such uncertainties may lead many investors to lock in gains quickly,’’ said Pong. But unlike before, Malaysia’s infrastructure spending seems to be expanding further. “This may mean that opportunities for medium term investing are better now. “However, one needs to take a closer look at the subsector that the construction company falls under, as prospects are uneven for the residential and non-residential sectors due to pockets of over-supply building up,’’ said Pong.

ith a higher ringgit and increasing costs of gas and electricity, will export-oriented industries, which have been doing well lately, be hit?

“The appreciation of the ringgit just took off in a serious way only last month. We will have to wait and watch; the impact will filter in after a while.

“Sustained strong demand is crucial to maintain the good prospects of export companies,’’ said Lee Heng Guie, executive director, Socio Economic Research Centre.

“Overly rapid forex moves are always disruptive, whether up or down,’’ said Pong Teng Siew, head of research, InterPacific Securities.

An impact from the strengthening ringgit on sales denominated in US dollars may be offset by lower costs of imported raw materials.

But for crude palm oil (CPO) prices, the strengthening ringgit seems to have had some impact. “CPO prices are unable to climb this year in the fourth quarter, a seasonally strong quarter for CPO,’’ said Pong.

“Export-oriented sectors such as rubber products, semiconductor and palm oil will be likely impacted by the strengthening ringgit as their sales are in US dollars. “Malaysia’s export competitiveness remains healthy, thanks to the weak ringgit buffer built up from the depreciation in the past years,’’ said Vincent Khoo, head of research, UOB Kay Hian.

Jan - Mar 2018

“Next year, the expected announcement of the tender results for the High-Speed Rail and Bandar Malaysia are likely to provide strong catalysts to the construction sector.

The first quarter of next year may be potentially good for equities but why is a trading rather than investment approach advocated? “The outlook for equities, in general, will be tougher with less room for multiple expansion as valuation is fair. This means there will be more reliance on earnings growth, hence portfolio allocation to sectors with higher potential of earnings surprises.

ASIA PALM OIL MAGAZINE

“Sectors that fit into this theme include banks where earnings growth is positive in a gradual rate hike environment, consumer staples for improving consumer sentiment and defensive qualities, and upstream oil players to ride on rising oil prices,’’ said Thomas Yong, CEO, Fortress capital. “For the first half, the focus is likely to rotate back to the large caps. The dismal earnings season for mid to small caps in the third quarter – due to high input costs arising from, among other factors, a weak ringgit – will likely dwell on the minds of investors for a while,’’ said Pong. After the excessively high expectations piled on them, these mid to small caps are now said to be exposed like the “emperor without clothes”.

ASIA PALM OIL MAGAZINE

“The large overhang in commercial and high-end residential development projects is expected to dampen the growth of this sector in the years ahead. This follows the freeze order on the approval of new projects above RM1mil for residential and non-residential projects,’’ said Lee. So far, the construction sector has been the prime beneficiary of the ongoing implementation of major civil engineering projects such as in public transportation, ports, the Pan Borneo Highway and construction of commercial, retail and housing development projects. Columnist Yap Leng Kuen sees that maintaining profit margins is a challenge ahead. Source: The Star Online

Jan - Mar 2018

INDUSTRY NEWS

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On crude palm oil, Lee(pic), who is also chairman of the Malaysian Palm Oil Council, expected prices to increase to between RM2,500 and RM2,650 per tonne in the next two months, after the winter season

BAUCH & MÜLLER WERBEAGENTUR

IOI TO ALLOCATE RM1BIL FOR INVESTMENTS I OI Corp Bhd will allocate RM1bil for investments in its upstream businesses, according to chief executive officer Datuk Lee Yeow Chor (pic).

On crude palm oil, Lee, who is also chairman of the Malaysian Palm Oil Council, expected prices to increase to between RM2,500 and RM2,650 per tonne in the next two months, after the winter season.

“This is to rebalance the company’s investment portfolios, as it had invested substantially in downstream businesses over the past few years,” Lee told reporters after the company’s EGM here yesterday.

“This is due to the strengthening ringgit and its correlation with higher crude oil price which has now moved above the US$60 per barrel threshold,” said Lee.

Lee said IOI would be actively looking at the plantation sector, depending on the opportunities, as it has a strong balance sheet and a low gearing level of 0.38.

He also projected IOI’s palm oil output to increase by between 8% and 10%, driven by the recovery in the current and new output in Indonesia, which has been moving towards its young prime stage.

On the EGM, Lee said, the group has agreed to dispose of 70% of its stake in its Netherlands-based palm oil refinery, IOI Loders Croklaan Group BV, for RM3.94bil to Koninklijke Bunge BV. Lee said the disposal would bring down IOI’s net debt and net gearing. Moving forward, he said, the profit from the company’s upstream businesses would likely continue to account for about 60% to 70% of its total profit, mainly from the plantation sector, while about 25% to 35% would be from its downstream businesses. Source : Bernama

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Jan - Mar 2018

ASIA PALM OIL MAGAZINE

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SCHÜTZ (Malaysia) Sdn Bhd PT 27773 Jalan Nilam 3 Nilai Utama MY-71800 Nilai Negeri Sembilan Phone (+60) 6 798 0899 Fax (+60) 6 799 3831 salesmy@schuetz.net Jan - Mar 2018 25 www.schuetz.net/malaysia

INDUSTRY NEWS

Meeting with Sabah Forestry Department on the Sabah JCSPO and the National Certification Scheme, MSPO

MSPO CERTIFICATION :

THE WAY FORWARD FOR THE MALAYSIAN PALM OIL INDUSTRY

alm oil has been and continues to be of the utmost importance to the overall economy of Malaysia and social well-being of its people. Exports of palm oil and palm oil products contribute significantly to the country’s foreign exchange earnings. Oil palm cultivation has also been hugely instrumental in raising the standard of living and household income of small landowners and rural communities in the country. Being able to yield more oil per hectare of cultivation than any other vegetable oil, palm oil is the most efficient oil crop in terms of land use and is therefore able to meet the increasing demand for oils and fats of the ever-growing population of the world. In Malaysia, oil palm has been grown on a large scale for well over 100 years now.

The more optimistic we are about the future, the better we can focus on today’s challenges. Today, the palm oil industry faces many challenges. There is no denying that negative perceptions have gathered pace in recent years, touching on issues related to deforestation, emission of greenhouse gases, planting on peatland, land rights, workers rights, and high conversation value areas. The challenges and perceptions are

Jan - Mar 2018

many but the fundamental objective to serve all remains a constant. But after a century of cultivation and production, can it still be business as usual for the Malaysian palm oil industry? There is little doubt that the time has come for the industry to rethink and rebrand the palm oil originating from planted areas in Malaysia, whether plantations or smallholdings. This would require a collective paradigm shift and optimistic thinking from the industry players, growers, processors and traders alike. To implement a credible certification system using a national standard is an effective and responsible manner to brand the Malaysian palm oil. Such a national standard will implement sustainability policies that are consistent with broader national sustainability goals. Hence, the development of the Malaysian Sustainable Palm Oil (MSPO) Certification Scheme, which is the national scheme in Malaysia for oil palm plantations, independent and organised (scheme) smallholdings, and palm oil processing facilities that are certified against the requirements of the MSPO Standards.

ASIA PALM OIL MAGAZINE

MPOCC 7th Board of Trustees Meeting

The MSPO Standards comprise of 7 principles, addressing MSPO certification provides a host of benefits, including: (i) management commitment and responsibility; Enhancing productivity – through optimising yields (ii) transparency 1 and profits with the application of good agricultural (iii) compliance to legal requirements practices; protecting the environment (both flora and (iv) social responsibility, health, safety and employment conditions fauna); addressing social responsibility of workers and (v) environment, natural resources, biodiversity and affected communities, including health and safety; ecosystem services effective cost management; better waste management; (vi) best practises and implementing fair work conditions. (vii) development of new plantings. Allowing for traceability – by knowing the origin of 2 the fresh fruit bunches (FFB); having from details and The MSPO Certification Scheme provides for application by potential clients for certification audits; development and review proper and up-to-date yield records; addressing the of certification standards; guidelines for auditing; accreditation concerns of affected stakeholders. requirements and notification of certification bodies; peer reviewing of audit reports; supply chain traceability requirements; Propagating positive impacts – by increasing awareness 3 on environmental and social aspects of sustainability; issuance of logo usage licenses; and procedures for handling of complaints. reducing accidents at the workplaces; applying best management and agricultural practices to increase The MSPO certification process demonstrates our commitment yield and productivity, and reduce waste, resulting in to production of sustainable Malaysian palm oil. This ensures reduced running costs and higher profits. that we have a good understanding of our supply chain as well as proper implementation of a robust management system. Establishing and maintaining links to new and existing 4 markets, especially those that are environmentally An efficient and effective management system will definitely allow for optimising of yields and profits, while addressing and sensitive and are demanding Certified Sustainable reducing negative social and environmental impacts. The MSPO Palm Oil (CSPO). Certification Scheme also addresses good agricultural practises, which are essential in order to guide the production systems A definitive means of negating negative perception of 5 Malaysian palm oil, while addressing environmental, towards sustainable agriculture which are also ecologically safe. This in return will produce a high-quality product. Growers social and economic aspects of sustainability in a can prevent contamination at all the different stages in crop balanced approach. development and production, i.e. before planting, while the crop Enhancing the competitiveness and acceptance of is growing, during harvest, and after harvest. 6 Malaysian palm oil and palm oil products in the global market, through branding under MSPO certification Being a national certification scheme and very much home grown, it will not only take committed effort and cohesive collaboration amongst the many local stakeholders, but also Accepting and recognising MSPO means recognising acceptance by markets for Malaysia palm oil, for the MSPO the Malaysian Government’s credibility and commitment Certification Scheme to gain recognition and acceptance. The towards sustainability. MSPO certification has now been MSPO Standards articulate the balance between social, economic mandated as a mandatory requirement for all sectors of the and environmental concerns, taking into consideration legality palm oil industry in Malaysia, and this definitely reflects the requirements. The key point here is that the entity undergoing commitment at the highest level. With the taking of cohesive MSPO certification is subjected to legislative check and balances efforts by the Government, the scheme is bound to garner based on local laws and regulations. effective sustainability results, acceptance and recognition in the global market.

ASIA PALM OIL MAGAZINE

Jan - Mar 2018

INTERNATIONAL NEWS

Benefits

of M SPO Ce r t ific a t ion Government Support

• As MSPO is a national scheme, applicants will be given technical & financial support

International Trade

Water & Waste Management A tractor drives by an oil palm plantation in Cambodia. KT/Chor Sokunthea

JAPAN-BOUND KHMER PALM OIL SET FOR NEXT YEAR

proposed deal between a Japanese company and a local agricultural conglomerate will result in the first shipment of Cambodian palm oil to the Japanese market sometime next year.

Mr Reththy said that on top of supplying the local market, they export to Malaysia as well as to the European market, and added that the new deal will be an excellent opportunity to expand into a new and lucrative market.

Mong Reththy, the owner of the Mong Reththy Group, told Khmer Times yesterday that the investment branch of his company – Mong Reththy Investment Cambodia Oil Palm Co Ltd – was now negotiating with a Japanese company interested in buying crude palm oil, although he failed to provide a name for the prospective buyer.

Hean Vanhan, the director-general of agriculture at the Ministry of Agriculture, Forestry and Fisheries (MAFF), welcomed the news of the negotiations, but asked the company to painstakingly study the new market and its export requirements before going ahead with shipments.

“A group of young Japanese businesspeople visited us very recently and they wanted to buy my crude palm oil after they saw that the quality met their standards,” said Mr Reththy. “They will buy at market price and we can sell them as much as we are able produce. They didn’t set a limit because they say their main goal is to give work to Cambodian people,” he said. Mong Reththy Investment Cambodia Oil Palm is one of the largest locally-owned investment companies specialising in palm oil. The company owns 16,000 hectares of plantations in Sihanoukville province.

“We urge the companies to work together and study in detail the requirements imposed by the Japanese government. We’ve seen too many companies fail because they just didn’t know key export requirements,” he said.

• Quality & availability of surface and ground water are maintained • Efficiency of resource utilisation & recycling potential wastes into value-added by-products

“This deal is great news for the industry. We can expect more and more Japanese investment to keep pouring into the country.”

Social Responsibility • Contribute to poverty eradication • Commitment to contribute to local sustainable development

Conservation Needs

• Wellbeing of local communities

• Protect rare, threatened or endangered species • Protect high biodiversity value areas • Soil and water conservation

Protect workers’ rights

• Ensure good health, safety and employment conditions

• No child labour nor forced or trafficked labour is allowed

The price of crude palm oil has plummeted in recent years, jeopardising the livelihoods of many local producers. Mr Reththy said the new deal could be the first of many such purchasing agreements between Cambodian and Japanese enterprises, particularly if the price of palm oil bounces back up.

• Competitive advantage on exports particularly in the environmentally sensitive markets such as the EU, US & Australia

• All employees and contractors shall be appropriately trained

Empower smallholders • Better livelihoods

• Social Impact Assessment (SIA) is conducted

• Become suppliers of sustainable palm oil

Source: www.khmertimeskh.com

Jan - Mar 2018

ASIA PALM OIL MAGAZINE

ASIA PALM OIL MAGAZINE 15

Jan - Mar 2018

MALAYSIAN PALM OIL CERTIFICATION COUNCIL Floor, Bangunan Getah Asli (Menara), 148, Jalan Ampang 50450 Kuala Lumpur, Malaysia | tel +603 2181 0192 | fax +603 2181 0167 | info@mpocc.org.my | www.mpocc.org.my

INTERNATIONAL NEWS

FUJI OIL TO BUILD MALAYSIAN PALM OIL FACTORY WITH LOCAL PARTNER VENTURE WILL TARGET DEMAND FOR RESPONSIBLY SOURCED PRODUCTS

apan’s Fuji Oil Holdings group is teaming up with a Malaysian company to make palm oil products that comply with international standards in order to allay consumer concerns over environmental and social problems rampant in the industry.

The factory will be built on United’s 18,000-hectare plantation and is scheduled to be operational next June. It will be powered in part by biomass power generation using the residues from oil production. Plans call for the production process to receive certification for meeting international environmental and labor standards.

Palm oil has a wide range of uses from frying to making sweets. Demand is growing in the U.S. and Europe as a healthier alternative to trans fats. The joint venture is expected to sell palm oil to European food producers looking to go green. In addition, Fuji Oil plans to process the oil into fat for use in chocolate production, for example.

The Fuji Oil group and palm oil producer United Plantations will create a 50-50 joint venture. This venture will build a factory with an annual output of 70,000 tons, one of the world’s largest for high-end palm oil that addresses environmental and human rights concerns. Fuji Oil will put up 800 million yen ($7.17 million) while its Singaporean subsidiary invests 4 billion yen to construct the plant.

Fuji Oil is targeting demand in Europe, where consumers are sensitive to environmental and human rights issues. Deforestation and child labor have often been cited as concerns surrounding palm oil production in Southeast Asia. In 2004, the nonprofit Roundtable on Sustainable Palm Oil was created to establish an international certification system to accredit sustainable producers.

Japan consumes about 500,000 tons of palm oil per year for cooking, and Fuji Oil controls half of the market. The company sees greater demand for sustainable products leading up to and after the Tokyo Olympics in 2020.

Jan - Mar 2018

Source: Nikkei

ASIA PALM OIL MAGAZINE

Jan - Mar 2018

ASIA’S ONLY PALM OIL INDUSTRY & TECHNOLOGY NEWS MAGAZINE

A Publication of:

COMMERCE MINISTRY HELD TRADE MISSION TO EGYPT, WITH COFFEE AND PALM OIL AS MAINSTAY PRODUCTS

PEN).

fforts to improve trade relations and export performance continue to be intensified by the Ministry of Commerce through the Directorate General of National Export Development (Ditjen

The success of a transaction of $3.05 billion in trade missions to Japan led by Commerce Minister Enggartiasto Lukita, the Ministry of Commerce is now targeting non-traditional export markets for coffee and palm oil products. Led by Director General of NED Arlinda, the trade mission took place from December 5 to December 8, 2017 in Cairo, Egypt. “With this trade mission, Indonesia seeks to increase exports to non-traditional countries. The leading products brought through this trade mission are coffee and palm oil and Indonesia also intends to identify potential trade barriers between Indonesia and Egypt and strengthen trade relations both countries,” explained Arlinda in an official statement on Wednesday (12/6/2017). She explained that this trade mission brings 15 Indonesian companies from various sectors, including

Jan - Mar 2018

palm oil, coffee, cocoa, pepper, paper and services. Based on data from Central Statistics Agency (BPS), Indonesia’s coffee exports to Egypt in 2016 reached $41.25 million. Indonesian coffee is the largest product purchased by Egyptian buyers at Trade Expo Indonesia 2017 with a transaction of $30 million. Meanwhile, the export of palm oil to Egypt in the same year reached $657.28 million, while Indonesia’s palm oil exports to the world reached $18.1 billion.

South East Asia Circulations Reach Out to Qualiﬁed Leaders & Key Decision Makers! Quarterly Publication

“There are still many opportunities for coffee and palm oil exports to Egypt and hopefully through this trade mission we can increase the export of these two commodities to Egypt,” Arlinda said.

FBI PUBLICATIONS (M) SDN BHD Suite 5, W505, West Wing, Metropolitan Square, No 2, Jalan PJU 8/1, Damansara Perdana, 47820 Petaling Jaya, Selangor Tel: +603-7493 5947 Fax: +603-7493 5977

Total trade between Indonesia-Egypt in 2016 reached $1.46 billion with export value of Indonesia amounted to $1.1 billion and imports$352 million. Thus Indonesia was surplus $758.3 million. Meanwhile, the total trade between the two countries from January to September 2017 reached $1.12 million or a surplus for Indonesia of $726.10 million. Source: www.en.netralnews.com

ASIA PALM OIL MAGAZINE

PALM OIL MAGAZINE Email:ASIA my@ﬁreworksbi.com

Jan - Mar 2018 33 Website: www.asia-palmoil.com

INTERNATIONAL NEWS

SCHÜTZ ANNOUNCES THE ACQUISITION OF ENVASES Y LAMINADOS, S.A. DE C.V. IN MEXICO A software solution that enables you to... Process...

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chütz has signed a purchase agreement for 100 per cent of the shares of Envases y Laminados, S.A. de C.V. (ELSA). Closing is expected to take place in early 2018, subject to the pending approval of the Mexican antitrust commission

and Mexico offers interesting growth perspectives for our industry as our customers perceive Mexico to be an integral part of the NAFTA region. In addition, we feel very much honored being entrusted by Carlos Mata with leading his company, which he has built up to be the market leader in Mexico over the last decades, into the future.”

ELSA is the leading supplier of rigid industrial packaging in Mexico. The company has been co-operating with Schütz under licence agreements for the manufacturing and sale of Schütz IBCs and plastic drums for almost 20 years.

Carlos Mata, sole manager and owner of ELSA who is going to retire, declared: “I am extremely pleased to pass my company on to Schütz, a family-owned business like ELSA, which stands for high-quality products and services world-wide, a long-term business approach and solid financials enabling a strong further development of ELSA in the years to come.”

COFECE.

Roland Strassburger, CEO of the Schütz group, stated: “We are excited about this unique opportunity to be present in Mexico with a fully owned subsidiary. ELSA is well established

Jan - Mar 2018

ASIA PALM OIL MAGAZINE

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ASIA PALM OIL MAGAZINE TRANSFORMING THE WAY THE WORLD WORKS

Jan - Mar 2018

PROCUREMENT CORNER KAPILIT PALM OIL MILL Add: POBox 60966, Adijaya , Sabah Tel: +6089 771 333 (HQ) Fax: +6089 761 703 / 016 863 0201 KILANG KELAPA SAWIT BINUANG Add: PO Box No. 130, 91207 Kunak, Sabah Tel: +6089 855 189 Fax: +6089 855 188 KILANG KELAPA SAWIT BRANTIAN Add: Peti Surat No. 33, 91007 Tawau, Sabah Tel: +6089 923 057 (Mill) / 089 772 277 (HQ) Fax: +6089 923 057 KILANG KELAPA SAWIT LUNGMANIS Add: PO Box 60999, 91118 Lahad Datu, Sabah Tel: +6089 806 400 Fax: +6089 806 400 KILANG KELAPA SAWIT SABAPALM Add: Genting Sabapalm Estate (Oil /mill), Peti Surat 901, 90710 Sandakan, Sabah Tel: +6089 265 921 / 089 673 736 Fax: +6089 265 317 KILANG SAWIT LADANG MAMAHAT Add: Peti Surat No. 29, 89109 Kota Marudu, Sabah Tel: +603 2688 3129/3127 Fax: +603 2688 3130 KILANG KELAPA SAWIT PALOH Add: Karung Berkunci No. 104, 86609 Paloh, Johor Tel: +605 241 7844 (HQ) 07 781 1001 Fax: +605 241 2003 (HQ) 07 781 1001 KILANG KELAPA SAWIT SEDENAK Add: Sedenak Palm Oil Mill, Karung Berkunci No. 721, 80990 Johor Bahru, Johor Tel: +607 652 6030 Fax: +607 652 6030 KILANG KELAPA SAWIT ULU REMIS Add: PO Box 107, 81850 Layang-layang, Johor Tel: +607 752 7126 Fax: +607 752 7323 KILANG KELAPA SAWIT UNITED BELL Add: K.B. 103, 81500 Pekan Nenas, Pontian, Johor Tel: +607 699 4268 / 3839 Fax: +607 699 4368 KILANG KELAPA SAWIT CHANGKAT CHERMIN Add: Wisma Taiko, No. 1, Jalan S.P. Seenivasagam, 30000 Ipoh, Perak. Tel: +605 672 2801 / 05 241 7844 Fax: +605 672 2802 / 05 243 7405

Jan - Mar 2018

KILANG KELAPA SAWIT JENDARATA Add: Jenderata Estate, Div III, 36009 Teluk Intan, Perak Tel: +605 641 1822 Fax: +605 641 1898

K.K.S LEPAR UTARA 6 Add: Kilang Sawit Lepar Utara 6, Peti Surat 12, 26400 Bandar Tun Razak Jengka, Pahang Tel: +609 474 1661 Fax: +609 474 1333

KILANG KELAPA SAWIT LEKIR Add: Batu 11, Lekir, 32020 Sitiawan, Perak Tel: +605 679 2888 Fax: +605 679 2828

KKS CAROTING SDN BHD Add: Sri Jaya, 26030 Kuantan, Pahang Tel: +609 481 3105 Fax: +609 481 3104

KILANG KELAPA SAWIT SOUTHERN PARK Add: 36400 Hutan Melintang, Perak Tel: +605 641 2689 Fax: +605 641 2190

KKS CHARUK PUTTING Add: Pt 2136, Mukim Perak, 28000 Temerloh, Pahang Tel: +609 297 1564 Fax: +609 297 1568

K. SAWIT LANCANG KEMUDI (SAHABAT J) Add: Peti Surat No. 30, 91150 Pos Cenderawasih, Lahad Datu, Sabah Tel: +6019 833 1790 Fax: +6019 853 8592 / 089 811 905 (Hq)

KILANG MINYAK SAWIT TG. TUALANG (1997) SDN BHD Add: Lot Pt 1278, Mukim Tanjung Tualang, 31800 Dearah Kinta, Perak Tel: +605 883 6504 / 883 8023 Fax: +605 883 6362

K.K.S HAMPARAN BADAI Add: Peti Surat No. 25, Pos Cendarawasih, 91150 Lahad Datu, Sabah Tel: +6089 816 104 Fax: +6089 816 105 / 019 813 4359

MALMAJU BINA SDN BHD Add: Jalan Selama, Kubu Gajah, 34130 Selama, Perak. Tel: +605 850 1500 Fax: +605 850 1507

KKS ELPHIL Add: Batu 6, Jalan Lintang, 31100 Sungai Siput, Perak Tel: +605 594 0177 Fax: +605 594 0167

K.K.S NILAM PERMATA (SAHABAT G) Add: Peti surat No. 23, 91150 Pos Cenderawasih, Lahad Datu, Sabah Tel: +6019 813 9340 Fax: +6019 813 4160

KKS CORONATION Add: PO Box 504, 86009 Kluang, Johor Tel: +607 759 7189 / 759 7190 Fax: +607 759 7193

K.K.S PINANGAN Add: Peti surat 60003, 91010 Tawau, Sabah Tel: +6089 771 236 / 089 854 380 (Mill) Fax: +6089 761 239

KKS KAHANG Add: Karung Kunci No. 533, 86007 Kluang, Johor Tel: +607 786 6181 Fax: 07 786 6787

K.K.S LANGKON Add: Peti Surat No. 154, 89108 Kota Marudu, Sabah Tel: +6088 667 810 / 08 667 252 / 088 235 811 (HQ) Fax: +6088 233 779 / 088 667 292

KKS TENGAROH 4 Add: Peti Surat 67, 81907 Kota Tinggi, Johor Tel: +607 791 1261 Fax: +607 791 1262

K.K.S PINANG Add: Locked Bag No. 3, 91009 Tawau, Sabah Tel: +6089 854 696 Fax: +6089 854 887

K.K.S JENGKA 8 Add: 26400 Bandar Jengka, Pahang Tel: +609 466 2559 Fax: +609 466 4392

K.K.S PROLIFIC YIELD Add: PO Box 1562, 90717 Sandakan, Sabah Tel: +6089 278 228 (Mill) / 089 272 773 (HQ) Fax: +6089 278 229

K.K.S KECHAU 7 Add: FPISB K.K.S Kechau, Peti Surat 16, 27207 Kuala Lipis, Pahang Tel: +609 324 0744 Fax: +609 324 6708

K.K.S UNICO DESA Add: PO Box 60397, 91113 Lahad Datu, Sabah Tel: +603 21410166 / 089 577 287 Fax: +603 2142 6199 / 089 577 287

K.K.S LADANG ROMPIN Add: PO Box 65, 26700 Muadzam Shah, Pahang Tel: +609 453 5740 Fax: +609 453 3061

ASIA PALM OIL MAGAZINE

KKS MORISEM B Add: Locked Bag. No.15, 91109 Lahad Datu, Sabah Tel: +6089 845 418 / 089 861 874 (Ms. Jamilah) Fax: +6089 845 418 KUANTAN TRADING PALM OIL MILL SDN BHD Add: PO Box 11, 85007, Segamat, Johor Tel: +605 255 3228 (HQ) / 07 937 2430 (Mill) Fax: +605 253 9093 (HQ) / 09 437 2177 (Mill)

MASAI PALM OIL MILL Add: Kong Kong Road, PO Box 1, 81757 Masai, Johor Tel: +607 255 1111 Fax: +607 255 5117 SERI INTAN PALM OIL MILL Add: Locked Bag 23, Batu 5, Jalan Maharaja Lela, 36009 Teluk Intan , Perak. Tel: +605 622 1911 Fax: +605 621 4091 ST PALM OIL MILL SDN BHD Add: PO Box 309, 36000 Teluk Intan, Perak Tel: +605 622 1788 Fax: +605 622 9871 SYARIKAT PERUSAHAAN KELAPA SAWIT SDN BHD Add: Karung Berkunci 105, 83700 Yong Peng, Johor Tel: +607 467 1012 Fax: +607 467 3225 TIAN SIANG OIL MILL (PAHANG) SDN BHD Add: Kampung Tersang, Batu Malim, 27610 Raub, Pahang Tel: +609 370 5351 / 09 370 8539 Fax: +609 370 3714

REFINERY NEWS

PUNJAB’S UNREALISTIC EDIBLE OIL PLANS “With the PTA kicking in, we lost the level playing field. Price-wise, we are a little bit disadvantaged because our production cost can be slightly higher. Regaining our market share is going to be a challenging task because we realise that Pakistan is a price sensitive market.”

akistan’s consumption of oils and fat for cooking and industrial application is increasing fast, reaching 3.8million tonne in 2016 from 2.9m tonne five years back. The use is expected to grow even faster going forward as the economy expands and household income levels rise. Of the total oil and fats consumed last year, only 13 per cent came from local oilseed crops. Oil extracted from imported oilseeds constituted 18pc of the total consumption. The rest of the national requirement was met by palm oil imports that formed the bulk of the oil and fats imports of 2.6m tonne, up by 30pc from two million tonne in 2012. With palm oil imports, including palm kernel oil, spiking by a third to 2.4m tonne last year from 1.6m tonne five years back, Pakistan’s edible oil and fats market is acquiring more significance for the two major palm oil producing countries — Indonesia and Malaysia, which together produce 85pc or 53.3m tonne of the total world palm oil and control 91pc of its international trade of 48.2m tonne. “Traditionally, Pakistan has been a very important market for the entire palm oil consortium. Many years ago when Malaysia was a major producer and exporter of palm oil, we depended heavily on Pakistan,” Dr Kalyana Sundram, the chief executive officer (CEO) of the Malaysian Palm Oil Council, told Dawn during an interview in Kuala Lumpur.

Jan - Mar 2018

He pointed out the consumption patterns in Pakistan were pretty varied like in the rest of the Indian subcontinent with the affluent segments over-consuming oil and fats and the poorer under-consuming, offering sufficient room to Malaysian palm oil exporters for increasing their share here.

What you can do is encourage a combination of liquid oils and solid fats. We are doing this in Malaysia, and this is happening in the rest of the world. If you want to ban solid fats, you have to completely change the diet and eating habits of the Pakistani people. Are you prepared to do that? “Ideally, fat consumption should be at least 25pc-30pc of daily energy requirements of a person. If you factor that along, there is significant room for growth for all oils and fats in Pakistan. And as the economy develops and per capita income increases, one of the first things that the population around the world spends on is food. If that happens, you will see a significant growth in total oil and fats consumption in the Pakistani market,” he argued. Once a leading supplier of palm oil to Pakistan, Malaysia has lost much of its share to Indonesia over time. Dr Sundram blames the preferential trade agreement between Indonesia and Pakistan for the decrease in Malaysia’s share in Pakistan’s palm oil market to 25pc-30pc from above 50pc.

ASIA PALM OIL MAGAZINE

He saw an opportunity for Malaysian suppliers as Pakistan’s palm oil requirements for industrial applications such as manufacturing soaps, shampoos, cosmetics, detergents, etc will increase as the economy improves and income per capita rises. “It’s an untapped market and offers opportunities when diversifying. Let me just add here that palm oil will remain a major food commodity and here’s no running away from that even if its use for other applications increases.” Speaking about health issues related to palm oil and the recent campaign by the Punjab Food Authority against vanaspati ghee, Dr Sundram said: “Historically, there have always been accusations about palm oil for health and nutrition.

the 1990s, there has been growing evidence that if you consume partially hydrogenated fats containing trans-fatty acids — a fat that actually increases the risk of heart disease. “Many countries including the US, are now legislating to remove trans-fatty acids from their supply chains. We fully endorse the removal of trans-fatty acids and partially hydrogenated oils. We have been telling Pakistan that if you want to reformulate vanaspati, we can offer formulations that can be made with palm oil that have zero trans-fatty acids, and yet you will get the characteristics and the texture of Vanaspati.” On PFA’s resolve for a total liquid oil diet in Pakistan, Dr Sundram pointed out that it wasn’t realistic. “There are world population can be divided into two types: One that consumes liquid oils and the other that consumes solid fats like vanaspati ghee, butter, etc. It is the culinary habits of the population. “What you can do is encourage a combination of liquid oils and solid fats. We are doing this in Malaysia, and this is happening in the rest of the world. If you want to ban solid fats, you have to completely change the diet and eating habits of the Pakistani people. Are you prepared to do that?”

“It all started in the 1980s with anti-palm oil campaigns waged by American Soybean Association. So we responded by commissioning health and nutrition studies and clinical trials all over the world including in Pakistan. We did a lot of work at that time with Agha Khan Medical Centre in Karachi and the Armed Forces Institute in Rawalpindi.

He said he was planning to sit down with the Punjab authorities next January, give them all the evidence and ask them to be reasonable and rational based on scientific evidence. “I would like to go one step further, and tell them that we are prepared to engage in a research to be undertaken in Pakistan. The food authorities must weigh all the unbiased data and look at what’s manageable. No country depends on single oil. You need different oils and fats for functionality. That’s why we are asking you to choose the middle path.”

“Nearly 170 studies later, we have established that no harm comes to people with the continuous consumption of palm oil. At no point did we claim that palm oil is a miracle fat. In Malaysia, around 80pc of the fat consumption is provided by palm oil. Hence, this country is a living proof that palm oil is good for populations. Yes, over consumption of anything is harmful.”

He warned that the implementation of the PFA plans to totally replace solid fats with liquid oils will leave Pakistan with no option but to import genetically modified oils like soybean, sunflower, etc. “The cost of these imports to the country will also be significantly higher because palm oil trades at a discount to soybean, sunflower and rapeseed oils. So you are going to impose an economic burden on your people and country.”

He continued “the problem that we see in Pakistan is related to vanaspati. Vanaspati is partially hydrogenated. Since

Source: Dawn

ASIA PALM OIL MAGAZINE

Jan - Mar 2018

COVER STORY

The partners in International Business project “PALMARES” will actively promote and search for cooperation with the Malaysian governmental agencies implementing the ambitious goals of the National Biomass strategy by 2020, with businesses and with knowledge institutes. Cooperation will enable Malaysian parties to further optimize the solutions of the future when knowledge on the palm oil residues are

Mössenlechner and Minister Nancy Shukri of Malaysia’s Prime Minister’s Department at the signing of an MoU between AIM and PALMARES.

DR. H.J.M. (RIAN) VISSER COORDINATOR OF PALMARES

Would you like to introduce yourself and what do you do at PALMARES?

I work as a senior scientist at the Energy research Centre of the Netherlands (ECN) on the topic of “Resource-efficient residues use” with the Bio-energy department. At ECN we do both long term researches with government funding as well as contract research paid by the industry. Most of our work takes place within the European Union, but we do work around the globe. We develop technology for biomass pretreatment, and conversion to energy and other products. I am currently working on the co-production of bio-energy and Biochar for soil improvement and bio-CCS (carbon capture and storage), but I also do a lot of contract work on the problems that inorganic (ash) material can cause in thermal conversion installations (typically, slagging, fouling, corrosion etc.).

Briefly describe PALMARES and its important role?

Palmares was started in December 2016. A group of organisations joined together in a ‘Partners for International Business’ project to work on“Optimized solutions for Malaysian Palm oil Residues” and signed a covenant for three years of cooperation. The signing on 21 December 2016 was a festive event and honored by the presence of both the Malaysian Ambassador in the Netherlands, Mr Dato’ Nazri and the Dutch Ambassador in Malaysia, Mrs Karin Mössenlechner.T he meeting was presided over by Mr. Cor von Meijenfeldt, member of the Board, Nature and Biodiversityof the Dutch Ministry of Economic affairs. The celebratory event enabled pleasant introduction to be made and compliments to be exchanged in an informal setting. The six business partners and two R&D institutes had the opportunity to describe their wide range of expertise and to confirm their joint ambitions in the PIB.

Jan - Mar 2018

ECN is leading the consortium of Dutch enterprises and R&D institutes with a mission to develop sustainable solutions for Malaysian palmoil residues. Palm residues are one of the larger biomass residues streams in the world that are only partially used or could be used with a higher added value. It is a very nice challenge to find both better solutions for the environment as well as higher added value and financial gain for the owners of the residues and the companies providing the technological solutions and the PALMARES consortium has taken on this challenge. The partners in the PALMRES consortium are companies from renewable energy or research background, such as ECN, Dahlman Renewable Technologies, DMT Environmental Technology, Wageningen University & Research, Paques, Blackwood Technology, Witteveen+Bos and CPM Europe. Jointly we have a mission:

Palm oil biomass & residues can be converted into bioenergy and other valuable products.By making use of the right technologies, additional profit can be generated as well asbenefits to the environment (soil, water, air)

PALMARES partners engaged in a business matching session with members of Malaysian Biomass Industries Confederation (MBIC).between AIM and PALMARES.

exchanged with the knowledge of the Palmares partners on other biomass streams and suitable technologies.

Dr. H.J.M. (Rian) Visser, Coordinator of PALMARES.

What is the plan for PALMARES development in Malaysia?

Among the countries in South East Asia, why is Malaysia being chosen?

Malaysia is one of the leading countries in the Palm oil industry, with the associated amount of residues. But more importantly for our choice to come to Malaysia is the Malaysian National Biomass strategy that has to be implemented by 2020. This visionary document sets out targets for which the Palm oil industries will need to adopt economically viable technologies. The will to progress in Malaysia is considered very important by the partners as it sets a framework and environment of opportunities for the better.

ASIA PALM OIL MAGAZINE

How does PALMARES help to contribute to the Malaysia palm oil industry?

At the end of the second mission another SWOT analysis was made to identify where the next opportunities lie for cooperation between Malaysian parties and Palmares partners. The focal points of identified challenges brought us to the general concept of commodities. This was certainly also inspired by our visit to PETRONAS. When targeting larger scale processes, whether this comprises bio-refinery or large scale co-combustion in Korea or Japan, a constant quality of the feedstock/fuel becomes the key issue.

The timing is right to combine the incentive for change as sketched out in the Malaysian National Biomassstrategy with the ambitions and expertise of the Dutch companies and R&D institutes. The consortium focal points will be conversion of Palm oil residues to bio-energy (fuel optimization and conversion technologies) bio-products and on reducing environmental issues such as optimizing fertilizers from residues, reducing greenhouse gas emissions and water pollution. New “wealth” will come from new bio-products in combination with environmental friendly products to ensure a lasting, sustainable future.

Pre-treatment techniques could be suitably located at the mill sites with excess energy. Pre-treatment could then play a major role in reducing transport and other logistic costs, but also provide the constant product quality that would make life of the end-users so much easier. Because Palmares has partners doing exactly that, providing pre-treatment techniques for constant commodity quality, it will be one of our new focal points. At the mill site, an overall plan to manage biomass streams and the energy generation and –use is required. It will be another focal point for 2018 as PALMARES partners can bring in valuable expertise on this issue.

A first fact finding mission of the Dutch partners went to Malaysia in April 2017 with the second in October 2017 to follow up with some of the leads.

What challenge does PALMARES encounter so far?

At the end of the inception mission a quick SWOT analysis was made to capture the most important findings and come to some general conclusions on where the first opportunities lie for cooperation between Malaysian partners and PALMARES partners and to help shape the first focus of the Palmares consortium. From a SWOT perspective, the incentives from the Malaysian National Biomass Strategy together with the solid technical background of the partners in PALMARES can be regarded as strong points. The fact that Malaysia, and certainly Sarawak, is blessed with excess energy resources is certainly a weakness as the most easy application for residues would normally go to local energy production. This allows me to identify opportunities of the residues from the palm industry. It seems obvious that most of the POME will stay onsite (or nearby) due to its large volume. This could provide the local necessary energy by generation of methane in digestion as well as a compost source based on the digestate. Sustainability would certainly improve. In order to cover the extra costs, the other residues, including the currently used mesocarp for energy generation, would have to move up the ladder to higher end products for local use or export. This is where the challenges lie. Not easy, but we certainly have a few nice ideas.

ASIA PALM OIL MAGAZINE

The R&D Institutes could help with plans to integrate the sustainability issues into the general concepts as well. For optimum soil conditions, some of the biomass could possibly be better taken of the land in times of replanting while bringing back e.g. biochar for better nutrient adorption and slower release in combinations with compost from used digestate at later stages. It will be part of a strategy study from the R&D institutes in Palmares for knowledge exchange with Malaysian R&D institutes in the new year. We are looking forward to these new challenges in 2018. We feel that in the first year period much was learned and the second year will ask for more action and be hopefully equally successful.

PALMARES at IBCM 2017, Kuching

Jan - Mar 2018

SPECIAL INSIGHT

SPECIAL INSIGHT For many years, we were the market leaders, but unfortunately, after the Pakistan-Indonesia FTA, the level playing field was no longer present. The price advantage to Indonesian palm oil was very obvious, and gradually we declined in our share of palm oil to Pakistan. Our crude palm oil exports are taxed. This also impacted our market. Hence, our market share has decreased significantly, and the challenge for us is how to increase our lost market share in Pakistan. To be honest, this is going to be a challenging task because Pakistan is a price sensitive market. However, on the other hand, we are learning that there are segments of market in Pakistan that value quality and assurances from the Malaysian producers, and we see some kickback coming to the Malaysian producers and exports. We are also seeing a development of packed-products. The market for packed products is increasing in Pakistan, which I think offers a potential for growth for Malaysian palm oil. We need to work on this with our distributors in Pakistan. This is one of our agendas for 2018.

Dr Kalyana Sundram CEO- MALAYSIAN PALM OIL COUNCIL

Dr. Kalyana Sundram is currently the Chief Executive Officer, Malaysian Palm Oil Council (MPOC). Following his postgraduate studies from University of London, and research stints in USA, Australia, the Netherlands and at MPOB, he has clocked 36 years of services in the palm oil industry. This includes research into various aspects of oils and fats process technologies, nutrition and biomedical science and technical marketing. He is a fellow of the Malaysian Academy of Sciences and Fellow of the Nutrition Society. Dr. Sundram is primarily acknowledged for his work on palm oil and has served on WHO, FAO and IUNS expert consultations, published extensively and holds 21 patents. He has coordinated more than 170 research and promotion projects on palm oil including health, sustainability and wildlife conservation. Currently he heads MPOC with a focus on palm oil promotion and marketing, addressing the anti-palm oil campaigns and uses science based outputs to communicate the positives of palm oil.

Jan - Mar 2018

Following are the edited excerpts of the interview that was conducted during BR Research’s recent visit to Malaysia. Following are the edited excerpts of the interview that was conducted during BR Research’s recent visit to Malaysia. Pakistan’s market is quite important for palm oil producers. And with economic growth and rising consumption patterns, it is bound to pick up further. What is your strategy to expand your market share given that you are 25-30 percent of the market and the rest is Indonesia?

Traditionally, Pakistan has been a very important market for Malaysian palm oil consortium. It is one of the top 5 markets for palm oil. Many years ago, Malaysia was a major producer and exporter of palm oil; we depended heavily on the market in Pakistan. We did a lot of work in developing the market in Pakistan, teaching the industry how to maximise the use of palm oil.

ASIA PALM OIL MAGAZINE

Coming to consumption, the consumption patterns in Pakistan are pretty varied. You have the affluent segment that is sometimes blamed for over consuming oil and fats. It is typical of what you see in the rest of the subcontinent; let it be Pakistan, India, Bangladesh and all the way to Sri Lanka. The poorer segment of the population on the other hand, is under consuming fats and oil. Ideally, fat consumption should be at least 25 to 30 percent of your daily energy requirement. If you factor that along with Pakistan’s population, there is significant room for growth for all oils and fats in the country. And as the economy develops and per capita income increases, one of the first things that the population spends on is food, especially oils and fats. If that happens, you will see a significant growth in total oil consumption in the Pakistani market.

Do you think there are any government policies that discriminate against Malaysian palm oil?

No, there are no trade barriers. It’s just that the competition has affected Malaysian palm oil. Price-wise, we are a little bit disadvantaged because our production cost can be slightly higher. Secondly, there is a requirement for crude palm oil to flow into Pakistan so that the refineries there can refine the product. It becomes a challenge for Pakistan to depend completely on Malaysian palm oil because of the 7-7.5 percent duty we have on our crude palm oil exports; furthermore, the FTA between Indonesia and Pakistan has facilitated Indonesian exports into Pakistan’s market. If rising per capita income can offer a significant 3 room for growth to Malaysian palm oil, does it mean that the Malaysian palm oil is superior in quality to Indonesian palm oil? No. The quality characteristics of traded palm oil, whether Malaysian or Indonesian, are often identical. But what we have is the tradition of supplying quality products to not only Pakistan, but all over the world. People who know Malaysian suppliers are generally comfortable with them; Malaysian suppliers are preferred. Price is not the criteria; it’s the relationship and trust we have built over the years.

ASIA PALM OIL MAGAZINE

Most of the palm oil coming into Pakistan is refined. If we go back to crude palm oil, do you think Malaysia could get a bigger share of that?

No. Our supply of crude palm oil out of Malaysia will be limited. We have our own refining capacity in this country. And our priority is also to provide refining to our production. We need to add value into our own production. So the amount of crude palm oil that will be sent out of Malaysia will be limited.

How much do you expect your market share to increase in the next five years?

If we can progressively increase the market share from the existing 25-30 percent to 40 percent in about two years’ time, it will be a great achievement for us. But it’s an uphill ladder to climb. What have you been doing about the health issues related to palm oil? Recently, there are campaigns in Pakistan as well like that by Punjab Food Authority against Vanaspati ghee.

Historically, there have always been accusations on palm oil for health and nutrition. It all started in the 1980s with antipalm oil campaigns. How did we respond at that time? We did not have evidence. So we responded by commissioning health and nutrition studies and clinical trials all over the world including Pakistan. We did a lot of work at that time with Agha Khan Medical Centre, Karachi and the Armed Forces Institute in Rawalpindi. They were directed to undertake research. Nearly 170 studies later, we established the fact that no harm comes to the populations with the continuous consumption of palm oil. At no point did we claim of any palm oil’s miraculous characteristics. In Malaysia, around 80 percent of the fat consumption is provided by palm oil. Hence, this country is a living proof that palm oil is not hazardous. Yes, over consumption of anything is harmful. The problem that we see in Pakistan is related to Vanaspati. Vanaspati is partially hydrogenated. Since the 1990s, there has been growing evidence that if you consume partially hydrogenated fats containing trans fatty acids, you increase the risks of heart diseases. Many countries around the world including the US, are now legislating to remove the trans fatty acids from their supply chains. We fully endorse the removal of trans fatty acids and partially hydrogenated oils. We have been telling Pakistan that if you want to reformulate Vanaspati, we can offer formulations that can be made with palm oil that are zero in trans fatty acids, and yet you will get the characteristics and the texture of Vanaspati. Punjab Food Authority is campaigning for a total liquid oil diet in Pakistan. But you have to be very realistic here. There are two parts of the population around the world: One that consumes liquid oils, and the other that consumes solid fats like Vanaspati, ghee, butter etc. It is the culinary habit of the population. You need to bring in functionality. What you can do is a combination of liquid oils and solid fats. We are doing this in Malaysia, and this is happening in the rest of the world. If you want to ban solid fats, you have to completely

Jan - Mar 2018

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SPECIAL INSIGHT

How is the oil and fats industry doing around the world?

In the western hemisphere, the growth of oils and fats has saturated as their fat consumptions averages around 35-40 percent. However, in Asia, Africa and the Indian subcontinent, the total fat consumption is even below the minimum FAO recommendation, which is 20 energy percent. It is this part of the world where growth will happen. With rising per capital income, do you see Pakistan start consuming palm oil in other areas? Do you have any advantage over Indonesia in non-food palm oil use?

I think the use in oleo chemicals like soaps, shampoos, cosmetics, detergents, etc. will increase as income per capita increases. It’s an untapped market, and offers opportunities when diversifying. Today in Malaysia, 75 percent production of palm oil is for food, while 25 percent goes to non-food segments.

The 6 ICIS Asian Oleochemicals Conference th

16 - 17 January 2018 // Kuala Lumpur, Malaysia

Embracing the challenge of oversupply through diversiﬁcation of basic derivatives and downstream market integration

Oleo chemical industry is centred in Malaysia. We have that advantage. Twenty years ago, this was centred in the US. Indonesia is catching up, but we are the market leaders in oleo chemical industry because of the technology, innovation and experience.

change the eating habits of the population of Pakistan. Are you prepared to do that? We are planning to sit down with the Punjab authorities in January, give them all the evidence and ask them to be reasonable and rationale based on scientific evidence. I would like to go one step further, and tell them that we are prepared to engage in a research undertaken in Pakistan for the said issue. The global evidence is changing. From the perception that saturated fats are bad for you, today the health pundits are screaming that they do not see evidence associated with saturated fat consumption or solid fat consumption with risk of certain diseases. The food authorities have to weigh in all the unbiased data and figure out what’s manageable.

Assuming that we do remove all Vanaspati from Pakistan, what would we be importing?

You would probably be importing genetically modified soya bean oil. It could also be genetically modified sun flower oil, or rapeseed oil. The cost of these imports to the country will also be significantly higher, because palm oil trades at a discount to soya bean, sunflower, rapeseed oils.

Let me just add here that palm will remain a major food commodity. There is no running away from that. Other applications will increase, but I think the ratio will fall back to about 75 to 25 percent maximum. Pakistan faces the challenges of malnutrition - stunting 10 and wasting especially in children and youngsters. Do you think that the consumption of these fats could somehow resolve this issue partially? Definitely, from a nutrition perspective. Many years ago, people used to talk about protein- energy malnutrition. Energy malnutrition is still prevalent in many segments of the population. In almost all developing countries including Pakistan, there is a problem of vitamin A deficiency. Children go blind if they remain untreated. We developed a palm-based product called red-palm oil, and we did intervention studies in Pakistan as well. You only need one table spoon of red-palm oil daily to overcome vitamin A deficiency. Vitamin A eradication programs are run by agencies including the UN; and the pharmaceutical companies have a very big footprint in the drives. Unfortunately, we have been kicked out. I would like to say to the Pakistani authorities that if you can have red-palm oil as a part of the solution for addressing malnourishment, we will be willing to participate.

WHAT’S NEW FOR 2018:

KEY BENEFITS OF ATTENDING:

Wider coverage of oleochemical feedstocks: a closer look at Indonesia and Malaysia as the key producers of palm oil and a session outlining the coconut oil key trends Spotlight on China and India as demand drivers of the industry Global ﬂavor to review Asia’s competitiveness – rapeseed and soybean market outlook Asian economic outlook: how is the region contributing to overall market upsurge? Will this increase investment opportunity in the oleochemical space? Synthetic vs Natural routes: compare and examine the differences of these two routes during the panel discussion

OVER

400 ATTENDEES

200 COMPANIES

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attended since 2013

Prepare yourself and your strategy in the midst of the overcapacity challenges in Asia Receive ﬁrst-hand information from key industry experts from the entire value chain Know more about what’s happening outside Asia through our selected globally-focused topics including India and China Expand your network through interaction with other delegates. This event has been well-attended by representatives across the globe!

30 COUNTRIES

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represented since 2013

Source: Business Recorder

* Register by Friday 3 November 2017 to save USD $300 on the standard delegate fee N.B. You must enter the promo code AUU10531 to receive your discount! 44

Jan - Mar 2018

ASIA PALM OIL MAGAZINE

Visit: www.icisconference.com/asianoleo Jan - Mar 2018 45 Call: +44 (0)20 8652 3887 Email: events.registration@icis.com

ASIA PALM OIL MAGAZINE

IN THE HOT SEAT

C) INTERVIEW QUESTIONS:

Being a few decades in one of Malaysia’s key industry, what are the important elements that drive the company to where it is today?

Our company places emphasis on honesty and integrity when servicing customers. We believe that a balanced and mutually fulfilling “supplier-to- client” relationship helps in building long term business. The reliability of our equipment is also of paramount importance to us. Through our collaboration with Shinko, the excellent quality of our “RB” model of turbines had carved out a name for itself in the palm oil industry. We also possess a strong after sales service team. There are about 120 service technicians and engineers, scattered around our service centres in Malaysia and Indonesia. Some of them even travel to foreign regions as far as Latin America to service our clients in the mills. We understand our customers’ needs by listening to their feedback to provide better quality service.

PMT INDUSTRIES SDN. BHD. A) ORGANIZATION BACKGROUND AND HISTORY.

PMT Industries Sdn. Bhd. is a member of Wah Seong Corporation Berhad which was founded in 1983. PMT’s impeccable reputation in the global palm oil industry ranges from engineering solutions for biomass power plants and oil room processes to equipment manufacturing and providing services for the palm oil mills. As our strategic partner &amp; principal since 1989, Shinko Ind. Ltd. is a reputable company based in Hiroshima, Japan, specializing in manufacturing and supplying pumps and turbines to the marine and generic industries. It is also highly acclaimed as one of the world’s most reputable brands for steam turbines. In 2013, PMT with Shinko formed a new JV company named PMT Shinko Turbine Sdn Bhd. The joint venture encompasses the synergy of resources, expertise and capabilities in manufacturing the turbines which steered the company’s growth to where it is today.

MR. HONG CHING KIANG Mr. Hong is Senior Vice President of PMT, who is in charge of overall operations of PMT. He is one of the brainchild and PMT cofounders. Mr. Hong carries with him a wealth of more than 35 years of working experience in the palm oil industry specializing in the turbines business.

B) CEO AND DIRECTORS PROFILES.

MR LEE YEE CHONG Mr. Lee graduated from the University of Malaya majoring in mechanical engineering and started as a project engineer in ABB, a reputable Swiss based MNC with roots in the power and electric industry. In 1996, he joined Jutasama which eventually merged with PMT and Mackenzie to form the current Renewable Energy Division of Wah Seong Corporation Berhad. In 2003, Mr. Lee was promoted as the COO of Wah Seong’s Renewable Energy Division and subsequently promoted to CEO in 2016 to overseeing the division and had served the role until today.

MR. CHIA KIM HAR Mr Chia Kim Har is a Senior Director of Marketing and Business Development, as well as a co-founder of PMT Industries Sdn Bhd. He has more than 30 years of working experience in the palm oil industries sector and specializes in delivering both strategic business and market development activities.

PMT also has another agency line from Saito Co. Ltd. based in Tokyo, Japan. Saito has more than 70 years of experience in separation technology and specialised in manufacturing of decanter.

Jan - Mar 2018

ASIA PALM OIL MAGAZINE

What are the major challenges that you encountered through the years and how did you overcome them?

The financial crisis hit us pretty badly during the years 1998 and 2008. Those times of turmoil affected many businesses. We were able to tide through the crisis with support from our principal who provided us more flexible payment terms to ease our cash flow management and with the help of some clients who made earlier payments. Being a service-based company, another challenge would be maintaining our group of quality technicians and engineers who are well trained. We strive to always recruit actively and provide training to our engineers to ensure the number of well-trained manpower is always enough to service our clients and cope with their expectations.

What is the unique competitive advantage that your company have that stand out from the competition?

Our joint venture with Shinko ensures we deliver quality turbines specialized for the palm oil mills, in which our competition would not be able to replicate. We even possess our own in-house R&amp;D team who specifically works on the turbine production. Heat treatment and Parkerizing are part of the procedure to enhance our product quality. Our track record speaks for us. In Kalimantan, 8 out of 10 unit turbines sold are from us. Time has proven that our turbine is reliable and we do not compromise on quality. Stringent product test which is the “live-steam” test on the turbine using steam generated from our packaged boiler are also conducted for individual turbines before delivery. Despite the costs incurred, these tests are necessary for us to ensure customers’ confidence in our products.

Jan - Mar 2018

IN THE HOT SEAT

(From the left) CEO of Wah Seong’s Renewable Energy Division, Mr. Lee Yee Chong; Marketing and Business Development Senior Director of PMT, Mr. Chia Kim Har; and Senior Vice President of PMT, Mr. Hong Ching Kiang.

What is the company’s greatest milestone under your leadership?

The joint venture of PMT with Shinko Ind. Ltd. in 2013 is a great milestone for us. Shinko is one of the world&#39;s most reputable brands for steam turbines, where previously they have not work out of Hiroshima, Japan until we formed the joint venture. The synergy has leveraged our resources and capabilities which made us into who we are today. Currently, we have already sold more than 1,200 unit of turbines, which is another great milestone for us. Currently we are enjoying a reputation where we have become a preferred brand in the market and where client recommendations have spoke volumes for us.

What is your future plan for the company in the next 5 years?

We will continue to promote spare parts, equipments and services to drive the growth, emphasized on product development in collaboration with our principal and stakeholders. We aim to develop more quality products that fulfil the market needs. PMT has since evolved from the parts and services business to a “multi product” company. We will set up more service centres to fulfil our clients’ requirements when the clientele base grows accordingly.

Jan - Mar 2018

RB MODEL

What aspects do you think needs to be improved in order to achieve the outcome in the next 5 years?

EMPTY FRUIT BUNCH PRESS

We will need to recruit more front-line young talents to understand and overcome the future market changes, as they are the new generation that will proactively response to the dynamic of customers buying behaviour. We may leverage on their exposure and knowledge to fully utilize IT or digital application technology to improve our products or customer service.

DOUBLE DESANDING CYCLONE

Share your advice to the palm oil industry players so that people could learn from your experience.

PALM KERNEL OIL MACHINE

Building up a good relationship with customers is significant for every business. Listen to them, understand their needs and provide solutions that fulfil their requirements.

PMT AUTO BRUSH STRAINER

We should always lead the change, be proactive towards market change and fulfil the market needs. We prefer to make mistakes than risk not taking any action.

FRESH FRUIT BUNCH SCREW PRESS

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PMT SAITO DECANTER

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VIBRO SEPARATOR

Jan - Mar 2018

GREEN SOLUTIONS

GREEN SOLUTION

‘BORNEO ATLAS’ TO HELP PALM OIL BUYERS CHECK ON FOREST DAMAGE

esearchers have created for the first time a detailed map that will help buyers and consumers of palm oil work out whether the supply chain is harming forests on the Southeast Asian island of Borneo. Developed over the past year, the “Borneo Atlas” was unveiled this week by the Indonesia-based Center for International Forestry Research (CIFOR). The map shows the location and ownership of 467 palmoil mills on Borneo, which is shared by Indonesia, Malaysia and Brunei, and is one of the biggest island producers of the cheap, edible oil. “It is the most comprehensive data set so far,” David Gaveau, an environmental scientist at CIFOR, told the Thomson Reuters Foundation. Mapping of palm mills is more than 90 percent complete for the whole island, he added. To create the Borneo Atlas, CIFOR researchers sifted through online and other documents published by companies, non-governmental organizations, palm-oil certification agencies, mapping websites and social media networks.

Jan - Mar 2018

A tool linked to the Borneo Atlas will use regularly updated satellite imagery to show a 10-km (6-mile) radius around each mill, detailing its impact on nearby forested areas and any expansion of existing plantations. Users can also bring up a high-resolution image of each palm mill using Google Maps. It is hoped the new map will help palm oil buyers and traders trace their supply chain more clearly, and identify whether it is tainted with deforestation, said Gaveau.

By showing plantations, mills and all (the) infrastructure associated, people will be able to realize the full impact of palm oil planting on forests - he said. CIFOR is now collaborating with the World Resources Institute think tank and Greenpeace to improve land ownership identification for the atlas. Next year, it will add ports used by the palm mills to ship the vegetable oil, and it is also working to identify which banks are funding plantation developments.

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“We use it for investigations and to educate people about deforestation,” said Zhang Wen, executive director at Singapore environment group People’s Movement to Stop Haze. “It holds companies accountable for the change of the landscape.” CIFOR plans to team up with Trase, an online transparency platform which could help link ports with European importers, exporters and buyers to complete the supply chain. Palm oil, used in thousands of household products from snack foods to soaps, as well as to make biodiesel, has come under increasing fire in Europe for causing forest destruction. Borneo, the world’s third largest island, has about 8.3 million hectares of oil palm plantations. Environmental activists have pressured consumer companies into demanding that their palm oil suppliers adopt more environmentally sustainable forestry practices. CIFOR has now begun working on a similar project mapping Indonesia’s other key palm-producing island of Sumatra. “This is just the start,” said Gaveau. “The idea is that we will have much more advanced systems in the future that will hold companies accountable for their environmental commitments.” Source: Reuters

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Jan - Mar 2018

THE CUSTOMISED SECOND GENERATION

GREEN SOLUTIONS

WHEEL LOADER FOR MALAYSIA’S MARKET

BOUSTEAD UNIT TO REPLANT SABAH LAND

oustead Plantations will progressively replace old oil palm trees of the five estates encompassing 11,579.31hectares (42 parcels of land) which is bringing from Dutaland Bhd’s Pertama Land Sdn Bhd for RM750 million in Labuk and Sugut in Sabah. The purchase is through its unit Boustead Rimba Nilai Sdn Bhd and have a planted area of 10,000 hectares. It will embark on measures to increase its productivity, which currently is almost 47% lower than the fresh fruit bunch (FFB) yield of Boustead Plantations’ estates in Sabah of 16.6 tonnes a tonne. Among the measures planned are progressive replanting of old and lowyielding fields and the construction of a new palm oil mill in one of the estates. The management plans to replant about 7,400ha of the 9,998ha of

Jan - Mar 2018

plantable area in the estates over the next 10 years with improved highyielding semi-clonal and clonal oil palms, which is expected to boost the FFB yield and profitability of the estates in the long run. Boustead Plantations estimates a total investment of RM250 million for the above measures which will be implemented over 10 years upon completion of the deal. For the financial year ended June 30, 2017 the estates made a profit of RM24.69 million. The acquisition by Boustead Plantations is to be financed through a combination of internally generated funds (RM300 million) and borrowings (RM450 million). BPB said the proposed acquisition is part of its strategy to acquire more plantation land in Malaysia in view of the scarcity of suitable and sizeable land banks for oil palm cultivation, at a lower cost.

The total plantation land bank held by the Boustead Plantations group will increase by about 14.1%, from 81,838ha to 93,417ha. This also represents an increase of 15.7% in total planted area of oil palms from 63,840ha to 73,838ha. The proposed acquisition is expected to be completed by the second quarter of 2018. Affin Hwang Investment Bank is the principal adviser to Boustead Plantations for the acquisition. Meanwhile, Dutaland said the bulk of the proceeds from the sale, RM707 million, will be earmarked for it to acquire new businesses which will generate recurring income. Dutaland has invested about RM173 million for the assets since 1995. Boustead Plantations’ share price closed unchanged at RM1.63 today. Dutaland’s share price was up 1.5 sen to close at 73 sen with some 21 million shares traded. Source: Daily Express

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Technical Features of FL958G-II:

Latest Version of Cummins 9.3 Litres Engine.

Specialised Design for Malaysiaʼs Market Likewise Oil Mill and Other Dusty Workingʼs Environment. The Plate Fin & Openable Rear Cover Make the Cleaning of Radiator As Easy As Possible and Reduce Overheating Issue Due to Dirt and Fibers Trap on the Radiator.

Other Range of Wheel Loader: 2 Tonnes, 3 Tonnes, 4 Tonnes, 5 Tonnes, 6 Tonnes

Germany Brand Heavy Duty ZF Transmission for 5T and Above.

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The Condenser of the AC System Being Moved Outward, Ensuring a Better Ccooling Effect.

24˚ O- RING

Redesign Connecting Coupler Which Provide Long Life Hasslefree Performance.

Water and Dust Proof Electrical Connector System.

24 Degree Tapered Hydraulic Hoses System to Prevent Oil Leak and Withstand High Pressure and Heavy Duty Jobs Load.

Specialised Ventilation System for Hot and Dusty Weather in Malaysia.

Cluster Greasing Design for Easy Maintenance.

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MALAYSIA’S NETWORK

Kuala Lumpur (Corporate Office) Pahang (Kuantan) Kelantan (Gua Musang) Sabah (Sandakan) Sabah (Tawau) Sarawak (Kuching) - Upcoming

Johor Perak (Gopeng) Penang - Upcoming Sabah (Lahad Datu) Sarawak (Bintulu)

Jan - Mar 2018

GREEN SOLUTIONS

DID YOU KNOW?

INDONESIA REPLANTS OIL PALM TREES ON 9,109-HA LAND IN N SUMATRA

MAH: CONSIDER OIL PALM TRUNK FOR FURNITURE INDUSTRY

Futuristic equipment: Officials briefing Mah on the Kenaf processing machine after the opening ceremony of the Fibre and Biocomposite Centre (Fidec 3) and furniture durability testing laboratory at the Olak Lempit furniture complex in Banting.

he government is planting oil palm trees to replace old ones on 9,109.29 hectares of plantations owned by local growers in North Sumatra to help increase the productivity of the plantations. The plantations are located in 12 regencies: Serdang Bedagai, Langkat, Labuhan Batu, South Labuhan Batu, North Labuhan Batu, Asahan, Batubara, Simalungun, Padang Lawas, North Padang Lawas, Deli Serdang and Central Tapanuli. “The replanting program is crucial because 470,000 has of oil palm plantations in the province are owned by local farmers, 350,000 has of which are too old,” said Economic Coordinating Minister Darmin

Jan - Mar 2018

The Plantation Industries and Commodities Minister said that with ample oil palm plantations, Malaysia has the competitive advantage of being the first mover or early adopter worldwide to utilise oil palm trunk (OPT) in producing wood and ¬valued-added biocomposite products.

Nasution, when accompanying President Joko “Jokowi” Widodo’s visit in North Sumatra on Monday.

Mah said there were 5.7 million hectares of oil palm estates undergoing replanting process after 25 years.

Indonesia is the world’s biggest palm oil producer, with 11.9 million has of oil palm plantations, 41 percent of which are owned by individuals. Around 2.3 million households cultivate their own oil palm plantations.

“Every year, there are between 80,000ha and 100,000ha of oil palm estates available for harvesting and replanting. “This will lessen the country’s high dependence – about 80% – on hard timber such as rubber wood and other tropical wood ,” he said after opening the Fibre and Biocomposite Centre (Fidec 3) and furniture durability testing laboratory at the Olak Lempit furniture complex in Banting yesterday.

“It is a big job to replant the oil palm trees owned by local farmers. There are 4.6 million has,” he said. In addition to the large areas that need to be planted, the government also faces other problems, including uncertain status of land ownership. Source: The Jakarta Post

il palm trunk is an ideal alternative source of raw materials in the timber and furniture industry, said Datuk Seri Mah Siew Keong.

Coordinating Economic Minister Darmin Nasution said much of the oil palm trees were too old. (JP/ Wienda Parwitasari)

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Fidec 3 is an initiative of the Malaysian Timber Industry Board (MTIB) to provide processing facilities and testing services to the industry and also higher learning institutions, as well as aiding in the commercialisation of fibre and biocomposite products. Mah said the 7,432sq m Fidec 3, which cost RM13.3mil, would attract more industry players to explore more biocomposite products at the local and global markets. ASIA PALM OIL MAGAZINE

Last year, biocomposite products, comprising plywood, chipboard, fibreglass and wood plastic composites contributed RM6.3bil, which was 29% of the total RM22.1bil export value of the national timber industry. “The timber industry is facing a shortage in raw materials and high price of the rubber wood. “So, OPT is a good alternative,” he said, adding that technology has improved OPT’s moist level, making it more versatile and durable. He said more timber industry players should opt to use OPT, adding that there were currently five companies producing plywood and veneer from OPT for export to Iran and Turkey. Mah also said that the Government was working on the OPT Development Plan, which is expected to be finalised early next year. “The plan will contain detailed action and implementation of all programmes and activities under the OPT in the country,” he added. On the European Union action to impose a ban on the import of palm oil to the region, Mah said Malaysia would continue to fight against the move with Indonesia. “We will take the matter to the World Trade Organisation, if necessary,” he said. Source: The Star Online

Jan - Mar 2018

TECHNOLOGY & PRODUCT NEWS

AGRITECH BUSINESSES IN RACE TO PROTECT FARMERS FROM CYBER THREATS, SAYS INMARSAT New research finds that almost half of agritech businesses agree that their processes to combat IoT-related cyber threats need improvement

Jan - Mar 2018

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nternet of Things (IoT) is set to revolutionise the farming and agricultural sector, but many agritech companies are concerned by the cyber threats associated with the technology. This is according to independent research commissioned by Inmarsat (LSE:ISAT.L), which found that although the vast majority of agritech companies are moving towards IoT, less than a quarter (23 per cent) are completely confident in their ability to counter the security threats that IoT will bring.

takes from ‘seed to bin’ and from ‘farm to fork’. IoT technologies are being leveraged to automate irrigation and fertilisation systems on farms, to add new precision to operations and reduce waste, and to automate farming machinery, reducing the need for manual intervention.

Market research specialist Vanson Bourne interviewed respondents from 100 large agritech companies across the globe for its ‘The Future of IoT in Enterprise – 2017’ report. They found that while the majority of respondents had taken steps to address IoT security, with more than half (52 per cent) investing in new security technologies to accommodate IoT, 45 per cent agreed that their processes to counter cyber attacks could be stronger. Moreover, 23 per cent stated that they would need to make heavy investments in their security capabilities to enable their customers to safely exploit IoT.

“These threats are not trivial. Whereas an industrial-scale cyber attack in any industry can do significant harm to a business’s bottom line, such an attack in the agricultural sector could see whole crops decimated and have severe consequences for the quality of life of entire populations. It’s therefore critical that agritech businesses can take the necessary measures to counter these risks, and it’s clear from our research that there is a significant amount of room for improvement in this area,” he concluded.

Networks and skills emerged as two key areas in need of improvement. Just 42 per cent of agritech companies had given special consideration to network security in the development of their IoT solutions, while over half (55 per cent) reported that they needed additional security skills. Commenting on the findings, Chris Harry-Thomas, Director of Sector Development Agriculture, Inmarsat Enterprise, said: “Agritechs are already proving a boon for farmers, deploying technologies like IoT to help them speed up the journey that food

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However, a more technology-dependent and connected farm is a more vulnerable one, without the necessary security protocols.

For agritech companies to develop successful IoT solutions to help their customers thrive in the digital transformation, IoT network security must remain one of their top priorities. Satellite communications networks can play an important role as they are optimised to deal with mission critical communications, connecting things wherever they are on the planet. Agritech companies must also look to establish strategic partnerships with third parties who have the expertise to ensure that connectivity in individual devices, and the fundamental network infrastructure, conforms to the highest security and reliability standards.

Jan - Mar 2018

PLANTERS CORNER

YOUTHS ENCOURAGED TO JOIN PLANTATION AND COMMODITY SECTOR

ouths are encouraged to take up jobs in the plantation and commodity sector, which is facing a shortage of more than 54,000 workers, by equipping themselves with specific skills and semi-skills needed.

Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong (pix) said as, at Sept 30, the number of workers involved in the oil palm, rubber and furniture sectors was 207,000 local workers and 331,000 foreign workers. “The plantation and commodity sector needs a knowledgeable and skilled local workforce to enhance productivity and continue the sustainability of national commodity performance,” he told reporters after officiating the Institute of Malaysian Plantation and Commodities (Impac) certificates presentation ceremony here today. Mah said so far, Impac had trained 53,111 participants through training centres under six agencies and expected to train 78,000 youths by 2020 in order to provide skilled and semi-skilled manpower for the oil palm and furniture sectors.

Jan - Mar 2018

“In order to improve productivity in the commodity sector, it is important for the industry to shift to the use of mechanisation to reduce dependency on labour,” he said, adding that for example, he said the use of an oil palm motorised cutter to harvest fruit bunches was equivalent to five human harvesters. “In line with the government’s aspiration, the Malaysian Palm Oil Board (MPOB) offers a 20% discount on the purchase of machines and machinery for oil palm plantations,” he said. Mah announced that Impac has been appointed the Industry Leadership Board (ILB) for the plantation and commodity sector by the Department of Skills Development, Ministry of Human Resource. “This appointment recognises and strengthens Impac as a local centre for coordinating, regulating and planning activities conducted on all courses and training in the plantation and commodity sector according to the National Occupational Skills Standard,” he said. Source: Bernama

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Jan - Mar 2018

PLANTERS CORNER

ADDRESSING AGRICULTURAL PAIN POINTS WITH TECH

Digital News Asia, Braintree Technical Director and Chief Operations Officer Mustaqiim Mohd Abidin

precise terrace planning and bagworm control (precise pesticide spraying using drones). He adds that all data is viewable on their cloud-based web app, which requires no GIS expertise to use. The bigger question is, how does having an eye in the sky benefit the oil palm plantations industry’s bottom line? “For every 10,000 hectares, companies lose RM1.5 million in revenue a year due to 6% to 8% of missing trees, irregular tree density and inaccurate boundaries. This is assuming one hectare has 140 trees; producing about four tonnes average crude palm oil, where one tonne is RM2,700,” he explains.

all that.

He adds that the costs of using their services amounts to RM200,000, which saves the companies and smallholders more than RM800,000 based on the above figures. he agricultural sector in Malaysia is not known for its widespread use of technology, but one local company plans to change

“We also have the off-the-shelf drones but most of them are customised and upgraded to suit different applications or industries.”

When asked if the technology and drones were all developed inhouse, Mustaqiim says that the drones are assembled in-house, whereas the software, web-apps and AI were developed in-house.

Jan - Mar 2018

Potential of oil palm plantations According to Mustaqiim, the company started using AI back in 2009 while working with honey bees.

Braintree Technologies Sdn Bhd, an IT services company established in 2009, is using drones, artificial intelligence (AI), Internet-of-Things (IoT) and geographic information systems (GIS) technologies to help the plantations industry in Malaysia progress further. In a recent interview with Digital News Asia, Braintree Technical Director and Chief Operations Officer Mustaqiim Mohd Abidin (pic) says that their main goal is using technology to address the problems that plantations and other industries currently face.

“Those are still pilot projects,” explains Mustaqiim when asked about implementation for these sectors.

He adds that while 70% of their clientele are from the oil palm plantations industry, their services can also be customised for the construction, tourism, other agricultural industries such as rubber plantations and paddy growing, as well as conducting environmental impact analysis (EIA). Hence the balance 30% of their clientele involve construction firms, EIA, tourism, infrastructures firms (such as those that construct communications tower, railways and roads).

“We noticed that there were specific plants being selected by bees, so we used satellite imagery then and we begin to see more utility for oil palms, which is a RM60-80 billion a year industry. That’s where the money is. And also, construction and infrastructure,” he says of their decision to venture into the oil palm plantations industry. Braintree’s signature service is using drones and accompanying technologies such as AI, GIS and IoT to help big plantation companies as well as smallholders solve common problems. For example, the drones can be used for keeping track of planting inventory (allowing for precise tree planting and fertiliser orders), topography and

The drones also help save on labour costs. “One foreign worker charges RM70 for spraying the whole area taking the whole day, we did it in seven minutes using drones - says Mustaqiim. He adds that the oil palm plantations industry is currently facing a labour shortage because the value of the ringgit is shrinking. “We have to go for mechanisation and automation. Our land to labour ratio is roughly 1:10. The country is targeting a 1:20 ratio, but there’s no way to do that without automation. We are nowhere near there, as long as we continue to rely on manual workers, the most we can achieve is a 1:14 ratio,” he explains.

Acceptance from the plantations industry Despite the benefits that automation can bring to the plantations sector, Braintree’s services were initially met with resistance from its clients in the oil palm plantations sector. “The plantation growers were not that excited about it. Our first obstacle was to convince them to use the technology. The first time we implemented it, we gave a free demo for two months. We worked on proof of concept for the clients and once they knew our capability, they began to trust us an the technology as well,” explains Mustaqiim.

Despite the initial challenges, today the company services more than 20 oil palm estates throughout Malaysia, including East Malaysia. Their services have also helped resolve disputes in this industry. “There was once a case in Sarawak, where the estate was 10,000 hectares. There was a dispute between the smallholder and estate manager over the amount of fertiliser provided. We did mapping and discovered that the smallholder had planted beyond the boundaries, hence there was insufficient fertiliser. Hence, we helped them resolve the dispute.”

Funding and the road ahead According to Mustaqiim, Braintree is currently selffunded, mostly by the company directors. “When we secure projects, those revenues will be also used to roll another project and buy new equipment plus R&D.” He adds that they are pursuing certain grants at the moment, but are very selective about their external funding. “Yes, we do need funding to accelerate some of our growth and R&D, but selecting the right one that we are comfortable with is very important for us.” What are their mid to long-term plans for the company? “Our mid to long-term plans are to expand to the global market, especially in Asean and develop more automation and precise drone-based solutions that cater to pain points in the oil palm and agriculture industry,” he says. When asked how the fact that the Department of Civil Aviation (DCA) is setting up its own enforcement unit to put a stop to illegal drone flying in the country, will impact their business, Mustaqiim replies: “We understand that there should be regulation for safety and environmental friendliness. “However, we are concerned about the cost of certification that can kill this infant industry. We are already facing tough economic challenges to survive but any additional cost will kill us.” He believes that there should be an industry dialogue before policy implementation. “To add, basically we’ve had meetings with the DCA before with regards with this, so we are aware. Our pilots also have passed the DCA drone pilot level 1 course,” he concludes. Source: www.newdigitalasiacom

ASIA PALM OIL MAGAZINE

Jan - Mar 2018

PLANTERS CORNER

RECRUITMENT RESTRUCTURING CRUCIAL IN OIL PALM INDUSTRY

There is an urgent need to streamline the recruitment process and procedures, in view of the current shortage of workers in the oil palm industry. Such streamlining should be able to expedite the applications which in turn, would enable companies to get their workers in timely manner. These were the remarks made by Chief Minister Datuk Patinggi Abang Johari Tun Openg in receiving a courtesy call from the council members of Sarawak Oil Palm Plantation Owners Association (Soppoa) at his office here recently. Abang Johari also requested industry players to work together with the state government in facilitating their recruitment process, which would appropriately address the problem of not having enough workers.

“We had a fruitful discussion with the chief minister, where we highlighted issues that had been affecting the industry. The chief minister had promised to look into these issues,” said Soppoa chairman Tiong Chiong Ong, who led the visiting delegation. He said the chief minister also urged the industry to focus more on research and development (R&D) in the form of mechanisation, robotics and other means not only to lessen the dependency on workers, but also for the industry to become more competitive. “He (Abang Johari) expressed his hope that the industry would continue to safeguard the environment and that the state would also look at providing funds for R&D activities aimed at improving yields and productivity,” added Tiong.

Moving forward, the industry would continue to ensure that the smallholders would also benefit from the R&D activities run by Soppoa in collaboration with government agencies and also institutions of higher learning here, he said. “In particular, more R&D activities are expected to be centred on understanding the causes of low productivity (yields) in regions along the coastal belt of the state. “Soppoa has also requested the government to improve the ports and also logistics at major ports across the state to facilitate efficient palm oil trade in Sarawak, which should be growing as more planted areas come into maturity in the coming years.” Deputy Chief Minister Datuk Amar Douglas Uggah Embas was also present at the Chief Minister’s Office during the courtesy call. Souce: MPOB

Source: Star 2

Jan - Mar 2018

ASIA PALM OIL MAGAZINE

Jan - Mar 2018

PLANTERS CORNER

PLANTERS PLANTERS CORNER CORNER

IBG BIOFERTILIZER

REHABILITATE SOIL HEALTH AND VITALITY

» We have four 6,000 liters fermenters to culture probiotics. Our manufacturing plant in Puchong has a capacity to produce 5 million liters of IBG biofertilizers in a year

IBG Biofertilizer’s responsibility is to rehabilitate and improve soil health towards saving the environment for the worlds.

he soil is the gift of nature, and it is also the key element to supporting all the life on this mother earth.

Crops are the main source of food for people, if the soils become unhealthy, it will have a negative impact to humans in future. Today, IBG Manufacturing Sdn Bhd produces Bio Fertilizer to improve the soil structure, maintain the soil fertility, by not destroying the natural environment of the land in this mother earth, to provide continuous support of nutrition for the crops. However, nowadays, from the farmers to corporate planters, most of them have neglected the aspect that soil is a living entity and still using tons of chemical fertilizer and pesticides. This is beyond the soil to recover from, which leads to soil damage, sick and infertile. Chemical fertilizers are important raw material in agriculture production. They play an important role to ensure food security and increase in farmers’ income. However, it is increasingly acknowledged that long

decomposition and transformation of organic fertilizer. Hence, conducive to the formation of humus. In addition, aloe vera can help in resisting the invasion of crop pests, bacteria and viruses. Humic acid can promote root development and absorption that enhance the absorption of chemical fertilizers. Amino acids can improve the immune system of plants that suppress soil harmful bacteria. Trace chemical elements can help replenish plants to achieve a balance between chemical fertilizer and microorganisms.

Jan - Mar 2018

term uses of these chemical fertilizers, together with pesticides, will disrupt the soil structure and also adversely affect the quality and quantity of soil microbes. Increasingly, the trend today in agriculture is to balance the use of chemical fertilizer with Biofertilizer for the continued productivity of the soil, especially in the Tropics. Thus, for agriculture to move towards sustainable development, we must effectively replenish the soil. Today, IBG Manufacturing Sdn Bhd produces Biofertilizer to improve the soil structure, maintain the soil fertility, by not destroying the natural environment of the land in this mother earth, to provide continuous support of nutrition for the crops. Restoration of soil and improvement of soil fertility is a systematic project. The macro nutrients, a variety of beneficial bacteria, a variety of beneficial trace elements, and sustainable supplement of organic element are the four indispensable ways to restore the soil. Only in these ways, good conditions for sustainable soil conservation can be formed.

Our equipment would be mostly covering soil and foliar samples to quantify the chemical composition for both type of samples.

IBG Biofertlizer IBG Biofertilizer containing three components: microorganisms, organic matter and macro and trace elements needed by plant. The major components of IBG Biofertilizer are effective microorganisms. Microorganisms have the ability to improve plant’s water and nutrients absorption and improve soil structure. Hence, increase the plant’s absorption of chemical fertilizers.

Chemical Laboratory caters a wider scope of analysis with the latest of laboratory equipment; covering elements such as Boron , Magnesium, Potassium, Copper, Nitrogen, Phosphorus, Available Phosphate and Organic Matter

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IBG Biofertilizer contains microbes originated from soil and thus are soil environmental friendly. The microbes are capable of restoring the soil’s natural cycle and build soil organic matter. The bacteria population in IBG Biofertilizer is no less than 1 million (106) cfu/ml.

It can also adjust the soil pH level, promote plant growth and development, and improve the ecological balance of the soil. In particular, it can promote plant root development, improve root activity and enhance plant absorption. Microorganisms are easier to grow, reproduce, and achieve symbiosis with plants when the plant root system had well developed and its secretions had increased. IBG Biofertilizer can drastically reduce the amount of chemical fertilizer due to not only itself can directly provide comprehensive nutrition to crops, reduce the waste and loss of chemical fertilizers, but also because it can release confined chemical fertilizer active ingredient in the soil, for it to achieve effectiveness. In short, IBG Biofertilizer can reduce chemical fertilizer costs, but cannot completely replace the chemical fertilizer, it must use together which 30% Biofertilizer and 70% chemical fertilizer to achieve the best harvesting results and improve plant’s quality and yield.

Amongst its nutrient, in addition to microorganisms, IBG Biofertilizer also contains seaweed extract, aloe vera extract, humic acid, amino acids, and macro and trace elements. Seaweed and aloe vera increase soil organic matter, accelerate the

ASIA PALM OIL MAGAZINE

Jan - Mar 2018

FBI IN ACTION

EUMCCI HOSTS INAUGURAL PALM OIL SUSTAINABILITY EU - MALAYSIA INTERNATIONAL DISCOURSE Forum aims to shed light on the various issues surrounding palm oil sustainability

» Panel Discussion on the Better Understanding of the Different Points of Views and Perceptions of the Palm Oil in Foreign Market, during the Palm Oil Sustainability EU-Malaysia International Discourse presented by EUMCCI.

(From L to R) Denise Westerhout, Lead for Sustainable Markets Programme, Malaysia, WWF Malaysia, Dr Kalyana Sundram, Chief Executive Officer of Malaysian Palm Oil Council (MPOC), Roberto Benetello, CEO of EUMCCI, Thomas Brandt, General Manager of Malaysian-German Chamber of Commerce and Industry (MGCC).

The first panel session was headed by Brandt while the second session was headed by Datuk M. Nagarajan, Chairman of the Malaysian Palm Oil Certification Council.

overnment agencies, oil palm plantation owners, top industry players, commodities traders, academicians and environmentalists convened in the inaugural Palm Oil Sustainability EUMalaysia International Discourse in conjunction with the 8th International Greentech & Eco Products Exhibition & Conference Malaysia, IGEM 2017, at the Kuala Lumpur Convention Centre today. The forum, which organised by the EU-Malaysia Chamber of Commerce & Industry (EUMCCI), was part of the EUMCCI’s 2017 Europa Awards Sustainability initiative, highlighted the different points of view and perceptions on the issues of sustainable palm oil in a foreign market. Participants also engaged in the sharing of success stories that have led to better sustainability in the palm oil industry.

“This year, Malaysia celebrates 100 years of commercial oil palm cultivation. This is a proud achievement indeed because the Malaysian palm oil industry is one of the best regulated in the world with more than 50 laws and regulations related to its development. Benetello added that the EUMCCI’s role in Malaysia is to ensure great cooperation among Malaysia, EU and its Member States for a sustainable of palm oil, at every level of the supply chain.

EUMCCI will continue to cooperate and to support the efforts of Malaysia to minimise deforestation and other negative impacts that palm oil cultivation can have in order to achieve sustainable production of this commodity,” Benetello said.

The Palm Oil Sustainability EU-Malaysia International Discourse was officiated by Guest of Honour Karin Mossenlechner, Ambassador of The Netherlands to Malaysia and Datin Badriyah binti Ab Malek, Deputy Secretary-General (Energy and Green Technology), Minister of Energy, Green Technology and Water. Mr. Roberto Benetello, Chief Executive Officer of EUMCCI, said EUMCCI held an exclusive discourse featuring international experts to give comprehensive insights on the global palm oil industry as well as in-depth panel discussions regarding the global outlook of palm oil practices and the sustainability issues surrounding it.

Jan - Mar 2018

Roberto Benetello, CEO of EUMCCI, giving his welcome address during Palm Oil Sustainability EU-Malaysia International Discourse.

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Dr Kalyana Sundram, Chief Executive Officer of Malaysian Palm Oil Council (MPOC).

In ensuring the event runs smoothly with greater authoritative standing, EUMCCI has joined forces with a number of sponsors including Häfele, MyData, Sime Darby, Siemens and Volvo Trucks, to provide the necessary skills and logistics required.

Through the dialogue, EUMCCI aims to help the various parties to understand the current industry outlook and issues surrounding which has become a hot discussion topic especially in Europe. Furthermore, the discussion also serves as a networking platform for European business entities to meet and engage with the potential partners among the local industry players. In line with IGEM 2017’s mission to become the highlevel discourse hub for some of the most pressing issues surrounding the greentech, eco products and commodities sectors, Palm Oil Sustainability EU-Malaysia International Discourse featured international experts as panellists such as: • Mr Thomas Brandt, General Manager of MalaysianGerman Chamber of Commerce and Industry, • Dr Kalyana Sundram, Chief Executive Officer of Malaysian Palm Oil Council • Ms Denise Westerhout, Lead for Sustainable Markets Programme, Malaysia, WWF Malaysia, • Eddy Esselink, Programme Manager (Sustainable Development), MVO-The Netherlands Oils and Fats Industry, and many more.

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H.E. Karin Mossenlechner, Ambassador of the Kingdom of the Netherlands to Malaysia.

Jan - Mar 2018

FBI IN ACTION

FBI IN ACTION surfactants manufacturers.

Customers are also thinking of becoming producers themselves - TATA at the conference.

TOUGH TIMES LOOM AHEAD FOR

SURFACTANTS PRODUCERS

As such, new surfactant plants have been built in high-growth markets in Asia like China, India, and Indonesia in anticipation of a growing demand in these emerging economies. However, the Asian market is highly fragmented with huge overcapacities in China, which has more than 500 surfactants manufacturers. “About 3,766,000 tonnes of operational units of LAB (linear alkylbenzene) are supplied around the world, compared to 3,400,000 tonnes of global demand.” TATA gave another example where there was a huge demand-supply gap of 5.3 MMTPA (million metric tonne per annum) in global ethoxylates in 2016, of which 3.5 MMTPA is contributed by Asia. Surfactants form the second largest downstream market of ethylene oxide globally, consuming 9% of the total output. The global supply in upstream markets has expanded rapidly as well, for instance ethylene oxide (EO), a feedstock for surfactants. The world EO capacity grew quickly by around 80% in the last 10 years, from 19.25m tonnes in 2007 to about 34.5m tonnes in 2016, according to China International Chemical Consulting Corporation (CICCC).

urfactants producers in Asia and elsewhere in the world may be in tough times on account of lackluster world economic growth, global overcapacity and an increasing regulatory environment, especially in China. These challenges for surfactants producers dominated the discussions at the 7th ICIS Asian Surfactants Conference held in Singapore on 9-10 November 2017. In a 2017 surfactants survey done by ICIS, 49% of market participants said that the biggest challenge the industry will face in the next 12 months was sluggish world economic growth.

Jan - Mar 2018

Demand in mature economies is likely to be restricted, given the lower gross domestic product (GDP) as compared to emerging economies. Surfactants consumption per capita has also been declining in economies such as North America, Western Europe and Japan, and this trend is likely to continue. Overcapacity in the markets came in second at 42%, and an increasing regulatory environment and new competitors entering the markets both came in at 39%.

To maximise profits, Asian players including Emery, Kuala Lumpur Kepong Berhad (KLK) and Ecogreen Oleochemicals are heavily integrated across the value chain. However, despite vertical integration, operating margins of the majority of players in the industry have not improved, according to TATA Strategic Management Group. Overcapacity in market is a big issue.

the

surfactants

India’s Reliance Industries said at the conference that supply outstripped demand.

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Surfactants form the second largest downstream market of ethylene oxide globally, consuming 9% of the total output. Examples of surfactants include LAE (linear alcohol ethoxylates), LAS (LAB sulfonate) and SLS (sodium lauryl sulfates). For China, EO supply capacity has grown faster than demand. In 2017, China’s total capacity of EO is forecasted to reach 8m tonnes, while actual production will be around 4.6 m tonnes, CICCC information showed. Total EO production was at around 400,000 tonnes in 2005 and 4.23m tonnes in 2016.

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On the other hand, market demand and investment growth have slowed down in the EO-related markets since 2013. This long supply situation is outstripping demand in the surfactants market on the back of sluggish world economic growth, especially in mature economies like Europe where conservation concerns and replacements of surfactants affect buying interest.

Likewise, in India, the market is also dotted with several players of varying sizes. Therefore, in order to differentiate themselves, surfactants producers in the market have turned to new applications and technology, and customer-led

In North America, the supply is largely concentrated with the market continuing to consolidate and winnow out smaller players. With substantially less competition than Europe and Asia, North America could be a market to tap into. Asia is an emerging economy, but its capacity is long and growing. As a result, demand is hard-pressed to keep up with the plentiful supply. An increasing regulatory environment is also a big threat to the surfactants market. In China, the government is stepping up on environmental checks on Chinese plants, which would have to shut down if they do not pass the inspection. In many parts of the world, import taxes and anti-dumping duties (ADD) are introduced to protect local markets. For instance, Latin America is a fairly protected market. Although it is considered an emerging market, it is protected with tariffs about four times higher than the rest of the world. New competitors entering the market is another big concern for existing

innovation to appeal to their customers. For instance, the recent technology using the shale gas route to produce ethoxylates may increase competition in the global surfactants market. In the process, there is a potential to improve operating margins if any new technologies succeed.

Jan - Mar 2018

FBI IN ACTION

FBI IN ACTION Datuk Dr Ahmad Kushairi said that the United Nations estimates the world population to grow by another 2.3 billion people to 9.1 billion by 2050. To meet the needs of world food supply, vegetable oil production has to be increased by almost three times. At present, two of the world’s largest palm oil producers – Indonesia and Malaysia are producing 80 percent of global production. Malaysia’s palm oil is currently being exported to more than 200 countries, and feeding millions.

Datuk Seri Mah Siew Keong was receiving gift from our chairman Datuk Seri Hamzah

TRANSFORMATION TECHNOLOGY

FOR SUSTAINABLE OIL PALM INDUSTRY

MOHD SAUFI AW ANG, MPOB.

he achievements of Malaysia’s oil palm industry, which is celebrating its 100th anniversary of commercial planting (1917-2017) is remarkable. The development of plantations, processing and downstream sectors have long been one of the key drivers of national economic growth. In addition, the industry has been instrumental in elevating the socio economic status of rural populations and creating jobs for about four million people including 650,000 smallholders. The phenomenal growth of the oil palm industry has lifted Malaysia’s stature on the global stage. It has the distinction of being grounded on the collaborative and synergistic roles of the government and private sector. Investments of plantation companies and participation of government agencies in oil palm cultivation by smallholders, saw oil palm cultivation areas soaring to 5.79 million hectares, to established itself as the cornerstone of the Malaysia agriculture commodity sector. In 2016, palm oil and its products have generated RM67.6 billion in export revenue and accounting for 6.1 percent of Gross Domestic Product (GDP). Globally, Malaysia is known as one of the world’s leading palm oil producer and exporter. It accounts for 8.5 percent of the world’s total vegetable oil production and controls 19.1 percent of the export market by only using 0.11 percent of global land.

Jan - Mar 2018

Total planted area of major vegetable oil plants is 191 million hectares, with soybean occupying the largest area, that is 58 percent. In comparison, oil palm occupies only 10 percent. Despite its small hectarage, oil palm is the world’s No 1 producer of vegetable oil, accounting for 41 percent of production compared to soybean that produces 31 percent. In addition to that, one hectare of oil palm can produce 3.69 tonnes of palm oil. To produce this same amount of oil, rapeseed requires three times the land area; sunflower, four times; coconut almost five times; and soybean is the highest with seven times the land size. “Theoretically, oil palm has the potential to produce up to 18.2 tonnes of oil per hectare annually, which proves that oil palm is the most productive crop” - said the Director General of MPOB, Datuk Dr Ahmad Kushairi Din, when presenting his paper entitled “A Vision for Transformation of the Oil Palm Industry” at the Plenary Session of the MPOB International Palm Oil Congress and Exhibition 2017 (PIPOC 2017) held in Kuala Lumpur on 14 – 16 November 2017. PIPOC is the world’s largest palm oil conference, in 2017, it saw the participation of 2,126 delegates from 50 countries. The 3-day congress involved 5 concurrent conferences, presentations of 120 papers, 250 poster presentations and 260 exhibition booth featuring technology, products as well as services related to the oil palm industry.

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“In spite of its substantial contributions to national development and the global vegetable oil supply chain, the oil palm industry continues to be the target of negative campaigns overseas”, he added. They have tarnished the image of the oil palm industry, with allegations that undermine the industry’s achievements with regard to sustainability, environment, nutrition, health and food safety. In Malaysia, the oil palm industry subscribes to the 3Ps of sustainable development – People, Planet and Profit, balancing economic needs with social and environmental considerations. The government’s land development schemes based on oil palm cultivation have contributed towards poverty eradication and narrowing income gaps between rural and urban area. Besides providing employment and entrepreneurial opportunities and income, these schemes create rural townships, served by modern infrastructure and amenities for a better quality of life, contributed to social security, peace and harmony. In line with National Transformation (TN50) agenda to bring economy leap and well-being of the people, the oil palm industry is set to leap-frog to become knowledge-based, technologydriven industry associated with high productivity, high income and sustainable growth. Datuk Dr Ahmad Kushairi also called for the transformation of the oil palm industry because as an agriculture based sector it has the responsibility to continue feeding the world. He said that the oil palm industry needs to be like the manufacturing sector, and focus on productivity increments and competitiveness. In this context, oil palm industry players can leverage on

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technologies and innovations such as precision agriculture, microbes, genome and information technology that will transform the oil palm industry. Industry players have at their disposal advancements in biotechnology research that produces high quality oil palm planting materials to enhance the productivity and quality of palm oil while creating value added products.

The Genetic Resources Programme and the Development of Palm Series (PS) Breeding Materials have been documented in the latest MPOB publication, Monograph: Oil Palm Genetic Resources, which was launched during PIPOC 2017.

They can also utilize the transformative technologies such as advanced materials, biotechnology, good agriculture practices, efficient pest and disease control through modern techniques and digital technology that ensure higher productivity and profitability of oil palm cultivation without affecting the environment. MPOB’s breeding and Oil Palm Genome Programme has successfully produced more than 34,802 genes. The research breakthroughs of Oil Palm Genome and SHELL gene were published in Nature, a world renowned scientific journal. They includes the discovery of genes in the Elaeis guinensis oil palm fruit, the commercially planted oil palm originated from African continent. MPOB research has also successfully sequenced oil palm genome of Elaeis olifera originated from South America, which is capable of increasing oil palm productivity. Oil palm genome studies an important source of oil palm breeding, genetics and the oil palm breeding revolution, serves to identify genes for high yielding varieties and special traits such as disease resistance, slow height increment and long stalk. This success has led to the production of SureSawit Shell, Oil Palm Fruitform DNA Test, which is capable of determining the quality of Tenera planting materials, used commercially in most plantations that have a higher productivity than Dura seeds. Scientific breakthroughs of Genome studies are the results of over four decades of research and collection of oil palm germplasms that includes more than 110,000 accessions of the two species collected from 11 African countries and eight Latin American countries.

Technology transformation in the oil palm industry also involves the use of digital and communication technologies. The use of the latest technology applications and information networks in the plantation sector is able to enhance the efficiency of plant management, productivity and sustainability improvement. The use of wireless sensor, imaging technology, automation involving robotic and drone technologies for harvesting, collecting and transporting oil palm fruits can be used to determine manpower productivity and improvements of the plants and quality of oil palm fruits. The development of oil palm fruit manufacturing technology, filtering technology and the use of Global Tracking System (GPS) for transportation ensure improvements in the quality of oil palm products. Technology transformation needs to occur across the oil palm industry. This requires plantations, big and small to embrace automation, digital and information technologies, comprehensively known as Internet of Things (IoT). They need to become the anchors of the industry’s transformation journey in the years ahead, so that we will continue to retain our edge as a competitive Malaysian brand associated with sustainable development, high quality palm oil and assurance of global food safety.

Jan - Mar 2018

FBI IN ACTION

THE INDONESIA’S PALM OIL INDUSTRY HAS ENTERED A NEW PHASE PT Adhya Indo Jaya SOLD theit product in Palmex Indonesia 2017

Mrs. Susan Trica With Our Speakers(IIPOC), Executive Director of Indonesia Palm Oil Board,and Chairman of Chamber of Commerce and Industry (Kadin) Medan (left-right) Mr. Asmar Arsjad, Mr. Herdradjat Natawidjaja, Mrs. Dra. Pradnyawati, MA, Mr. Ir. Willistra Danny, M. For. Sc, Mr. Ir. Dr.H. Iskandar. AN, MSc, Mr. Ir.Rudi Zulham Hasibuan and Mr. Ir. Aziz Hidayat at Opening Ceremony PALMEX 2017 PALMEX INDONESIA 2017 was held in conjunction with “Indonesia International Palm Oil Conference (IIPOC) 2017” with the theme of “Enhancing Indonesia’s Commitment To Sustainability In The Palm Oil Industry”.

he largest Palm Oil industry exhibition in Indonesia was officially opened on 03-05 October 2017 by Executive Director of Indonesia Palm Oil Board, Mr. Ir. Dr.H. Iskandar. AN, MSc and Chairman of Chamber of Commerce and Industry (Kadin) Medan Mr. Ir.Rudi Zulham Hasibuan. Palmex Indonesia 2017 is the largest exhibition for the Palm Oil industry in Indonesia and Southeast Asia region which currently has become the references for the latest technological Palm Oil industry actors. Palmex Indonseia 2017 held in Santika Premiere Dyandra Hotel and Convention Center.

Moving forward to the 10th edition, PALMEX INDONESIA has grown at a rapid rate, attracting interest of firms from across the region. With larger participation, PALMEX INDONESIA is looking to secure a record USD 5 Million worth of transaction at the event. The 10th edition of Palmex Indonesia 2018, will be held on 09 – 11 October 2018. The exhibition will take place at the Santika Premiere Dyandra Hotel & Convention Center, Medan.

Participants Crowd at Palmex 2017 at the Registration area ( Day 1)

The 9th PALMEX Indonesia 2017 is the unique event aims to educate the public about the importance of the Palm Oil industry in Indonesia and the future trend of Palm Oil in the region. More than 7,000 industry professionals from more than 10 countries are attended this event. The international character and regional audiences of PALMEX Indonesia 2017 provide unparalleled marketing, education and networking opportunities.

Participants Crowd at Palmex 2017

The interest of Palm Oil industry to this exhibition is increasing from year to year. More and more companies are looking forward to participate in this exhibition and the number of visitors continues to increase every year. “We are optimistic the next year PALMEX 2018 will achieve an on-the-spot transaction worth USD 5 million,” explains Susan Tricia as a CFO PT Fireworks Indonesia. In addition to showcase the latest products and technologies for the Palm Oil industry, Palmex Indonesia is also the right event for purchasers and engineers to buy or replace their old machines with new machines, updating their insights into the latest technologies that can improve performance and establish business relationships among Palm Oil industry players.

Jan - Mar 2018

Mr. Ir. Donald Siahaan as one of our speakers in IIPOC is presenting a presentation entitled "Factors for Achieving HIGH PRODUCTION CPO in Oil Palm Plantation "

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The main players of Palm Oil industry in Indonesia and abroad are ready to present their products and technology at PALMEX Indonesia 2018, PT Traglopindo Utama, PT. Putra Otto Mandiri, PT. Heriwel Bintang Sejahtera, PT. Sampoerna Agro Tbk, PT. Smart Tbk, PP London Sumatera, Asian Agri, PT. Socfin Indonesia, PT. Jebsen & Jessen Technology Indonesia ,SWTS, Asian Agri, and many more. Some brands that will be represented are: Brevini, Karcher, Bosch, WM Welding, Krisbow, Nilfisk, Pepperl + Fuchs, Takuma Boilers, Hyundai Heavy Industries, Fuji Electric, LS, LG, GE and Flowserve. Will also present in Palmex Indonesia 2018 Bakrie Sumatra Plantation, Musim Mas, Astra Agro Lestari, PTPN, etc.

Participants Crowd at Palmex 2017at the Registration area ( Day 2)

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Jan - Mar 2018

ADVERTISER INDEX

PAGE ADVERTISERS 13 15 53 75 21 63 9 11 29 59 19 33 33 33 33 49 25 5 35 3/ IFC/ OBC 45 31

Biotec Internationl Asia Sdn Bhd Elliott Group Eurostar Group of Companies FBI Publications (M) Sdn Bhd HA-US Santrifuj Teknolojileri SanTic Ltd Sti IBG Manufacturing Sdn Bhd Jasa Aman Engineering Sdn Bhd (Prime Steam Turbine) Kejuruteraan Wang Yuen Sdn Bhd Malaysian Palm Oil Certification Council (MPOCC) Nantong Ant Machinery Co. Ltd Orion Biosains Sdn Bhd PALMEX Indonesia 2017 PALMEX Africa 2017 PALMEX Malaysia 2018 PALMEX Thailand 2018 PMT Industries Sdn Bhd Schutz Malaysia Sdn Bhd Taner Industrial Technology (M) Sdn Bhd Trimble Navigation Singapore Pte. Ltd. YKL Engineering Sdn Bhd The 6th ICIS Asian Oleochemicals Biogas Asia Pacific 2018

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Jan - Mar 2018

0T E1 N TH ITIO ED OF

ASIA PALM OIL MAGAZINE 7th INDONESIA INTERNATIONAL PALM OIL CONFERENCE 2018

YKL GROUP OF

COMPANIES

YKL ENGINEERING SDN. BHD. (568547-U) YTH AGRI-TECHNOLOGY SDN. BHD. (820140-D) PT. YKL INDONESIA

HQ OFFICE : Lot 663, Batu 10, Kampung Paya Panjang, Bukit Pasir, 84300 Muar, Johor, West Malaysia. TEL : +606-9859 155 / 9859 076 / 9857 518 FAX : +606-9857 567 / 9857 576 EMAIL : ykl@yklgroup.com.my WEBSITE : www.yklgroup.com.my

DESLUDGING & DEWATERING Treated Effluent

Treated Effluent

Screw Press Desludging and Dewatering Machine

Sludge Discharged

Sludge Cake Discharge Pit

Rotary Drum Dehydration Belt Filter Press

Dimension (mm)

5100(L) x 2525(W) x 2560(H)

Belt Width (mm)

1500

Power Consumption (hp)

DS Standard Treatment Capacity 390~480 kg/hr

15-30 m3/hr

Influent Treatment Capacity

DS Standard Treatment Capacity 180~308 kg/hr Inlet Capacity (S.S. 1.5%-2.5%)

12-20.5 m3/hr

PREVENTIVE MAINTENANCE PROGRAM A software thatâ&#x20AC;&#x2122;s assist maintenance team to operate, control and monitor the maintenance management. To verify the regulatory compliance and produce reports and summaries for all maintenance activities, scheduling maintenance program. - Reduce breakdown - Improve control

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ELECTROSTATIC PRECIPITATOR ( ESP )

To achieve the discharge particulate matters below 150ppm after boiler chimney. Boiler Flue Gas Dust Removal System is suitable to install for any biomass boiler. - The dust laden flue gas flows through a system which consists of collecting electrodes and discharge electrodes.

INSULATOR CLEAN GAS COLLECTING ELECTRODE

DISCHARGE ELECTRODE

HIGH VOLTAGE TRANSFORMER RECTIFIER

DUST GAS LADEN HOPPER DUST

- The high field strength in the vicinity of the discharge electrodes will create a Corona Effect. - The charged dust particles will migrate to collecting electrodes and dust layer will accumulated and formed. - The accumulated dust layer will remove to the hopper by the rapping system.

SOLID REMOVAL & OIL RECOVERY SYSTEM

Clear Filtrate

COD/BOD of discharge is reduced by 65% to 75%. Increase Oil Extraction Rate (OER) of mill 0.4% - 0.6%. Jan - Mar 2018

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