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We’re 6 years old! That’s 24 issues, hundreds of news and articles and a whole lot of memories. How is it possible then, that after 6 years, we still can’t be happier to be working together? In a word – family. This is what Asia Palm Oil Magazine is, a family. We’ve been fortunate to have found each other, working towards the same goals.

Enough story of FBI Malaysia team. Let’s go back to the magazine. Don’t miss our exclusive interview with Mr Philippe Conil, the Group CEO of Biotec International. Find out what are the important factors that drive the company to where it is today as a world leader in palm oil mills waste water and byproducts treatment since 1988.

There is a certain rhythm to our work, knowing when to keep our heads down to work and when to relax, when to chat and when to keep quiet. We may all have different personalities, different schedules and working styles, but at the end of the day our common love for the magazine ensures that each member does above and beyond what is required of them.

We again thank our advertisers, our readers, subscribers, writers, columnists, photographers and everyone who makes Asia Palm Oil Magazine possible and come this far. We look forward to future issues and all the adventures they bring.

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As the Roundtable on Sustainable Palm Oil continues its work of making sustainable palm oil the global norm, its chief executive officer Darrel Webber talks to Eco-Business about the trends that will shape the organization’s work this year. Find our more in Special Insight.

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ASIA PALM OIL MAGAZINE | April - June 2018

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CONTENTS

MAGAZINE

p.37

ORGANIZATION NEWS 8

- Malaysia Set Up Palm Oil War Room

INTERNATIONAL NEWS

- JCB Appoinment Highlights Ambition And Investment In Southeast Asia

36 - India To Double State Purchases Of Oilseeds, Pulses To Help Farmers

- Indonesian Ambassador Collaborates With Punjab Food Authority

p.10

p.24

p.28

38 - Equatorial Palm Oil Reports Progress With Palm Oil Mill Construction

- 19 Singapore F&B Firms Pledge To Use Sustainably Sourced Palm Oil

COVER STORY

- Researcher Suggests Development Of Palm Oil Downstream Industry

- Everything You Need To Know About The CEPA Trade Deal But Were Afraid To Ask

SPECIAL INSIGHT 44

- What 2018 Has In Store For Sustainable Palm Oil

- Procurement Corner

- 750,000 Ha Of Oil Palm Plantations MSPO Certified, Says Mah

- CPTPP Will Be Good For Malaysia

- Good News For Malaysian Palm Oil

- EU Palm Oil Move Can Result In Retaliation

50 - Interview with Academician Emeritus Prof. Tan Sri Datuk Dr Augustine S.H. Ong

- China And India Explored As New Palm Oil Markets

GREEN SOLUTIONS

- Turning Down The Heat In Indonesia’s Oil Palm Industry

- Wild Boars Adapting Well In Oil Palm Plantations

- Europe-Asia Trade War Looms Over Palm Oil

- Palm Oil Potential For Bio-Energy: LIPI

- Greenpeace Says Brands Refusing To Reveal Palm Oil Sources

- Govt Pushing Ahead With Locomotive Biodiesel Plans

- Malaysia Says EU Palm Oil Curbs Could Weigh On France In Fighter Jet Deal

- B10 Increase Eyed To Absorb Palm Oil Surplus

p.42

p.58

IN THE HOT SEAT

REFINERY NEWS

ASIA PALM OIL MAGAZINE | April - June 2018

- Interview with Mr. Philippe Conil, Group CEO of Biotec International.

33 - Malaysia’s Economy To Get Boost From Exports, Consumption In 2018-C.Bank

p.34

- Okomu Nigeria Sees Subdued 2018 For Palm Oil On Market Woes

INDUSTRY NEWS

p.50

- FGV Eyes New Palm Oil Markets as India, Europe Curb Imports

p.60

DID YOU KNOW? 60

- Decreasing Stress-Induced Gastritis

p.68

PLANTERS CORNER 62

- Indonesia Vows To Solve Palm Oil Replanting Problems To Boost Yields

- Palm Oil Society: Fund Distribution Is Unfair

- Indonesia Mulls Moratorium On Palm Oil Plantation

EVENT HIGHLIGHT 66

- 5th Africa Oil Palm & Rubber Summit Draws Plantation Owners, End Users To Ghana This April

- Sustainability Here And Now And In The Future

April - June 2017 | ASIA PALM OIL MAGAZINE

ORGANIZATION NEWS

MALAYSIA SET UP PALM OIL WAR ROOM

alaysia has set up a palm oil war room (POWR) to better coordinate efforts among government agencies to dismantle global barriers to palm oil trade, said Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong.

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“We’ve set up the POWR across relevant government agencies to better coordinate Malaysia’s efforts in dismantling global trade barriers against palm oil trade,” he told reporters at an industry gathering here today. He explained that the war room, headed by the ministry’s secretary general Datuk K. Yogeesvaran, is monitoring and cooperating with Ministry of Foreign Affairs (MOFA), Ministry of International Trade and Industry (MITI) and the Ministry of Natural Resources and Environment (NRE) and implementing measures put forward by stakeholders in the private sector and smallholder associations. POWR was set up in the face of mounting barriers to palm oil trade. India, at the start of the month, raised import tax on crude palm oil to 44 per cent from 30 per cent and lifted the tax on refined palm oil to 54 per cent from 40 per cent. Two months ago, the EU Parliament voted for the Renewal Energy Directive II to ban usage of palm biodiesel from January 2021. “We view these as protectionism for their homegrown oilseeds which is unfair and discriminatory towards palm oil trade. This is unacceptable, we are responding with might and tact,” the minister said.

We will press on with our negotiations with India and the EU, he added.

28M

Minister of Plantation Industries and Commodities, Datuk Seri Mah Siew Keong. (Photo by MOHAMAD SHAHRIL BADRI SAALI) Last year, Mah said Malaysia’s palm oil exports amounted to RM77.8 billion. He is optimistic that the demand for palm oil and its pricing would remain firm. “I think our palm oil output should be able to touch 20.5 million tonnes, this year. I hope, with more concerted marketing efforts, this year’s export would top RM80 billion,” he said.

ASIA PALM OIL MAGAZINE | April - June 2018

The 29th Palm and Lauric Oils Price Outlook Conference and Exhibition (POC2018), held from March 5th to 7th here, has attracted more than 2,000 vegetable oils traders from over 50 countries. Organised by Bursa Malaysia, this year’s conference is themed “Price Disruption – Take Control, Manage Volatility”. Source: New Straits Times

3500

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Jasa Aman Engineering SDN BHD Jasa Aman Sales and Services SDN BHD 39/39A, Jalan 23, Taman Bukit Kuchai, Batu 8, Jalan 47100 Puchong, Selangor Darul Ehsan, Malaysia Tel: +603-8075 6521, 8075 6750 Fax: +603-8070 2436, 8075 6485 Email: primeturbine@jasaaman.com Web: www.jasaaman.com April - June 2017 | ASIA PALM OIL MAGAZINE

ORGANIZATION NEWS

10 ORGANIZATION NEWS

INDONESIAN AMBASSADOR COLLABORATES WITH PUNJAB FOOD AUTHORITY

JCB APPOINTMENT HIGHLIGHTS

AMBITION AND INVESTMENT IN SOUTHEAST ASIA

ax Lytle has been appointed as Managing Director JCB Southeast Asia. In a move that reaffirms the global construction equipment manufacturer’s commitment to expansion in the region, he replaces Tom Cornell who is to take up the post of Managing Director Export Sales, from JCB’s UK HQ. In his new role - based at the company’s regional headquarters in Singapore - Max Lytle will rely on a strong international perspective which was developed in a long and distinguished British Army career. Applying proven leadership skills allied with a focus on strategic planning and project delivery – he is charged with continuing to deliver JCB’s strategy in Southeast Asia. This strategy places emphasis on success through the provision of a total aftermarket solution and close partnerships with customers. In describing JCB’s aims, Max emphasises: “Southeast Asia represents a very significant opportunity for JCB. There is high potential and the market is expanding rapidly. As the world’s No3

in the sale of construction machinery, we will strive to be central to that expansion. I look forward to building on the achievements of Tom and the team and continuing our commitment to provide even better support to customers in the region. My focus is to ensure that our newly expanded - and still growing – dealer network in the region can offer the very best aftermarket support to maximise uptime and help make money for our customers.” In his new role, Max will be able to draw on experience gained during varied sales and operational achievements in his five year tenure at JCB. This includes a stint in JCB’s UK Sales team, where he was responsible for the management of two of the top 5 performing dealers in the JCB Global Dealer Network. Within his most recent role of General Manager, Global Major Accounts, he also oversaw the building of the GMA Department at JCB with Jo Bamford son of Chairman Lord Bamford – which saw them double retail volume within three years. Consequently, he has considerable insight into the defining

ASIA PALM OIL MAGAZINE | April - June 2018

JCB family values, which are one of the main pillars of JCB’s successful and enduring business relationships in Southeast Asia. These values are also reflected in Max’s stated ambitions: “I am particularly looking forward to building long term relationships in a region which has strong executive level focus within JCB. I believe we have the right products for our customers thanks to our Global Manufacturing Strategy and One Global quality ethos. Additionally, JCB understands the specific local challenges and conditions that confront our customers, as well as the hard-working demands they make on our machines.” He added: “I am honoured and delighted to be here and will continue to invest in people, new product and, where necessary, further expand our dealer coverage to ensure that wherever we have a customer, we have a JCB Dealer service engineer close by to support their needs.”

he Indonesian Ambassador to Pakistan, Iwan Suyudhie Amri, recently invited one of the key authorities in monitoring palm oil products, the Punjab Food Authority (PFA), and a number of business actors in Lahore, the capital of Punjab Province. A statement from the Indonesian Embassy received by Antara here on Tuesday mentioned that in the meeting which took place on March22-24, the Ambassador held a dialogue with business actors in order to expand market in Pakistan for Indonesian palm products. The ambassador also sought to strengthen mutual confidence to promote sustainable economic and trade cooperation between Indonesia and Pakistan. “The population of Pakistan is about 207 million and its palm oil needs of more than 80 percent are imported from Indonesia,” the Ambassador noted, adding that Pakistan is Indonesia`s important non- traditional trading partner as it is the third largest export market of Indonesian palm products and commodities.

He said the problems regarding Indonesia`s palm products are vary and unique in each export destination country. According to the Ambassador, diplomacy in Pakistan is very important because the country has been contributing to Indonesia`s foreign exchange to more US$1.6 billion. PFA is considered important as it functions as an authority body for health control of food and beverage products in Punjab Province which is a major area in agriculture, industry and services sectors. “Punjab has a population of about 110 million people with GDP growth in the last four years averaging seven percent,&quot; the Ambassador said. At a meeting with a PFA leader, Noor ul-Amin Mengal, Ambassador Amri discussed non-tariff barriers to commodities and palm products. In this case, the PFA affirmed that there are no health problems with palm oil from Indonesia. Indonesia`s success in winning the case on the country`s environmental issues in the European Union and WTO (World Trade Organization) Court assured PFA that Indonesia`s palm oil products have no problems.

PFA recognizes that the problem lies in a process of developing palm oil into Vanaspati Ghee by a number of industries in Pakistan. PFA has conducted a series of meetings with the industries and asked them to give more attention to public health aspect in making food and beverages. Mengal said his plan to visit Indonesia to meet with Indonesian oil palm actors and institutions, and is interested in cooperating with the Indonesian Agency for Drug and Food Control (BP-POM). The Indonesian Embassy also partnered with a number of business actors in an effort to promote business cooperation with the Chambers of Industry and Commerce of Lahore and Faisalabad, and Indonesian product importers. This partnership aims to foster good relationships with business actors in Punjab and open up opportunities for cooperation to increase business in various other sectors that have not been widely explored. Source : Antaranews.com

April - June 2017 | ASIA PALM OIL MAGAZINE

12 INDUSTRY NEWS

INDUSTRY NEWS 13 Among other things, certified plantations are not allowed to burn to clear land, and the rights of local communities must be respected, said Ms Zhang Wen, PM.Haze executive director. Companies said the added costs of sourcing for sustainable palm oil were manageable. Dr Ng Wai Lek, director of NomVNom, said the price difference between sustainable and unsustainable palm oil is about $3 per tin. Members of Saspo said yesterday that sustainable palm oil adds less than 10 per cent to total operating costs.

and slash-and- burn tactics used by plantation companies and farmers to prepare land for crops. Environmental groups are touting sustainable palm oil as an alternative. This refers to palm oil from plantations which adhere to strict standards set out by the Roundtable for Sustainable Palm Oil (RSPO).

The latest additions to Saspo follow a campaign launched by WWF last year pressuring companies here to use sustainable palm oil. WWF surveyed 27 Singapore firms from April to June to track what companies are doing to prevent the negative impacts of palm oil production. Only 10 responded.

Following WWF’s release of the information, four of the 17 companies which did not respond earlier - Tung Lok, Commonwealth Capital, Super Group and Bee Cheng Hiang - pledged that they would work towards using sustainable palm oil. Mr Andrew Kwan, Commonwealth Capital’s group managing director, said his company was surprised by the results of the scorecard when it was first made public, citing the lack of awareness of sustainable palm oil in Singapore.

The lack of awareness could have contributed to the poorer take-up rate... Events like these and the press could help get more industry players on board - he said.

Mr Masagos Zulkifli, Minister for the Environment and Water Resources, who was guest of honour at yesterday’s event, said that with demand for palm oil projected to grow by another 50 per cent by 2020, sustainable production must take root in the industry. Source: The Straits Time

(From left) Herve Simon, group marketing director of Ayam Brand, Mike Barclay, CEO of Mandai Park Holdings, Andrew Tjioe, CEO of TungLok Group and Andrew Kwan, Group Managing Director of Commonwealth Capital, at the announcement of new members for the South-east Asia Alliance for Sustainable Palm Oil.

19 SINGAPORE F&B FIRMS PLEDGE TO USE SUSTAINABLY SOURCED PALM OIL

ingapore has been free from the scourge of haze for the past two years, but at least 19 food and beverage (F&B) companies here are not taking the clear skies for granted. The 19 - including big names such as Crystal Jade, F&N and Tung Lok, as well as smaller businesses such as Veganburg in Eunos and NomVNom, which has outlets in Clarke Quay and Tai Seng have recently committed to sourcing for sustainable palm oil. Ten of them made the commitment to do so this year, and yesterday, they officially joined the South-east Asia Alliance for Sustainable Palm Oil (Saspo), an initiative led by the World Wide Fund for Nature (WWF) Singapore.

The new additions to Saspo, which include Tung Lok Group and Commonwealth Capital, whose portfolio includes brands such as PastaMania and Baker and Cook, bring the number of member companies in the alliance to 15.

Together, these 19 companies account for more than 200 F&B outlets in Singapore. This is a fraction of the 7,679 F&B establishments here, according to 2016 figures from the Department of Statistics released last year.

Saspo is the first private-sector- led initiative in the region to address the need for sustainable palm oil in relation to the haze.

But Ms Elaine Tan, WWF Singapore’s chief executive, is confident that more companies will come on board. “The member companies of the alliance are the top brands in Singapore... And with the realisation that these top brands are sourcing sustainably, it will create the momentum for others to follow.”

The other four F&B businesses that use sustainable palm oil are Veganburg, NomVNom, Grain and Burger Beer Bistro. They are not part of the alliance but have committed to sourcing for sustainable palm oil since last year, after outreach efforts by volunteer group People’s Movement to Stop Haze (PM. Haze).

ASIA PALM OIL MAGAZINE | April - June 2018

The cultivation of palm oil in countries such as Indonesia has long been pointed out as a major contributor of air pollution in the region due to drainage of carbon-rich peatland, deforestation

April - June 2017 | ASIA PALM OIL MAGAZINE

RESEARCHER SUGGESTS DEVELOPMENT OF PALM OIL DOWNSTREAM INDUSTRY

researcher from Center for Southeast Asian Studies Kyoto University of Japan, Prof. Kosuke Mizuno, has said Indonesia should expand its palm oil downstream industry to increase the contribution of the palm oil sector to the country`s economy. “Indonesia has the potential to control world`s crude palm oil industry. The material is abundantly available, human resources are also available. The direction is clear - going down stream” - Prof Mizuno said here on Tuesday.

Prof Mizuno was a key speaker at a discussion on Policy in the Peat Management in Indonesia from the Ecology, Economic and Social aspects held at the campus of the University of Indonesia here.

ASIA PALM OIL MAGAZINE | April - June 2018

He said palm oil industry is growing fast so is oil palm plantation in the country.

But Indonesia is only an exporter of CPO, while processed products of palm oil are very limited such as soap, cosmetics,and margarine, - he said. He said oil palm plantations are expanding and demand for CPO is growing. CPO, therefore, has considerable contribution to the country`s economy. However, Indonesian economic development could not rely only on exports of raw materials, he said, adding the raw materials need to be processed to be higher in selling value. Source : AntaraNews.com

April - June 2017 | ASIA PALM OIL MAGAZINE

16 INDUSTRY NEWS

nternational trade deals, discussed and negotiated behind closed doors, manage to shape the policy space available for governments to further public interest. For this reason, the TTIP and CETA trade negations commandeered a mass trans-national response. However the EU-Indonesia trade agreement - otherwise known as the Comprehensive Economic Partnership Agreement (CEPA) - which began its fourth round of negotiations this week, seems to be have gone largely unnoticed by mainstream media. This is concerning, since a recent report concluded that this deal may have negative impacts on democracy, consumer rights and environmental protection.

So what’s wrong with CEPA? 1. DEMOCRACY

The TTIP trade negotiations have led to mass protests - will the same be true for CEPA? A total of 60 civil society organisations from Indonesia and Europe have signed a joint statement laying out serious concerns with the EU-Indonesia trade agreement. These behind-closed-doors trade negotiations - like CETA and TTIP - jeopardise an equitable and just future. KATIE HODGETTS explains why.

EVERYTHING YOU NEED TO KNOW ABOUT THE CEPA TRADE DEAL BUT WERE AFRAID TO ASK “Moving forward into a space of democracy, equity and justice demands more scrutiny and criticism of these back-door negotiation spaces.”

ASIA PALM OIL MAGAZINE | April - June 2018

Trade deals like CEPA are made behind closed doors, denying transparency, public scrutiny or parliamentary debate. Corporate lobbyists often have preferred access, meaning large transnational corporations largely drive the negotiations. This gives them disproportionate influence in shaping the trade agenda, resulting in trade deals that favour corporate rather than public interest. These deals use trade as an instrument for business growth, rather than to ensure equitable and sustainable development between and within nations. Unlimited market access between parties and protection for foreign investment deepens wealth inequalities and concentrations of markets and capital. In short, the cost of boosting trade is often paid in public welfare.

2. PALM OIL One of the biggest contentions of the CEPA negotiations surrounds palm oil. Indonesia is the world’s largest producer and exporter of palm oil, followed by Malaysia, with these two countries covering nearly 90 percent of global production.

INDUSTRY NEWS 17 This huge supply is matched to a huge demand, with palm oil monopolizing ingredient lists in cosmetics, biofuels and processed foods. It is found it over half of consumer goods, from lipstick to icecream to pizza dough to soaps. And to what impact? Rainforests are disappearing at the rate of 169 trees every second, which can be attributed predominantly to palm oil plantations. This deforestation is endangering the existence of several species such as Orangutans, and causing the evacuation of indigenous communities from their native land. It is also increasing greenhouse gas emissions due to a reduction in trees and slash-and- burn clearing techniques, making Indonesia the world’s third largest emitter of greenhouse gases. Furthermore, the palm oil industry is linked to land-grabbing, humanrights abuses, and degradation of habitats. Regardless, negotiations continue in the hope to expand this $44billion market under the flawed economic logic that ‘if there’s money to be made, there will be trade’. Certification systems for ‘sustainable’ palm oil are weak, and standards are getting weaker in an attempt to increase the numbers of certified sustainable producers and make palm oil more political palatable.

3. BAD LAW Investor-state dispute settlements (ISDS) has been a serious issue in trade deals, and CEPA is no exception. Trade agreements provide one-sided protection for multinational corporations and foreign investors. This includes international arbitration tribunals (ISDS) that circumvent the national legal system to allow foreign investors to claim against governments. For example, the Newmont Mining Corporation, which began mining in Indonesia as part as a bilateral investment treaty (BIT), historically argued that the Indonesian government’s plans to implement a ban on unprocessed mineral exports would impinge on the company’s profits and hence violate the investment

to present a claim against the Indonesian government. Indonesia has had many difficulties in having claims filed against them for pursuing public policy. Because of this, Indonesia announced in 2015 that it would allow all 67 of its BITs to expire. However, the CEPA deal would re-introduce an investor-state dispute mechanism via the ‘multilateral investment court’. This would lock Indonesia into a system of corporate rights and foreign investor claims, again dissuading the government from tabling new bills/developing new standards in the public interest.

4. BREXIT The CEPA deal is symbolic, as it signals a gateway for exporting this type of trade deal to other countries. Whilst other similar trade deals have historically been hampered, the adoption of CEPA could inspire the revival of other ‘profit over people’ deals such as the TTIP, which is currently dormant. The fact that CEPA has been resurrected from the ashes of TTIP demonstrates the might and seeming immortality of corporate power. So instead of business as usual, it’s time to rethink the nature of our current trade agreements. Brexit will demand the renegotiation of many trade deals once the UK leaves the single market. Therefore CEPA deserves extreme scrutiny if it is to be a model future deals are based upon. It is a possibility that UK trade agreements may forego policies that protect people and planet, to ensure a ‘strong and stable’ economy for a postBrexit Britain. It is a possibility that climate and sustainability initiatives will be sidelined to boost trade and economic growth through polluting fossil fuels. Hence, moving forward into a space of democracy, equity and justice demands more scrutiny and criticism of these backdoor negotiation spaces. Source: theecologist.org

agreement between Indonesia and the Netherlands. On this basis, they were able

April - June 2017 | ASIA PALM OIL MAGAZINE

MSPO CERTIFICATION The Way Forward

18 INDUSTRY NEWS

750,000 HA OF OIL PALM

19 NOV 2013 1 JAN 2015

MSPO Standards MS2530:2013 Series were launched.

MSPO Scheme started

24 FEB 2017

27 JULY 2017

Announcement of Timelines

The government announced the proposed timelines for mandatory MSPO certification to be implemented in stages.

Announcement of Financial Incentives

On 27 July, the government announced financial incentives to support smallholders with MSPO certification, while financial incentives for estates and processing facilities were announced on 2 October.

Incentives

CMY

He said it was a 210 per cent growth in certified hectarage since the government’s announced in May last year that the MPSO certification would be mandatory for planters and palm oil mills by end-2019. “This figure included 49 independent smallholder clusters with total planted area of 9,521 ha, seven clusters of organised smallholders with planted area of 19,110 ha, and 260 estates with planted area of 730,292 ha,” he added. Speaking to the media after officiating the MSPO Appreciation Day yesterday, Mah said the government had set a target to certify 1.8 million hectares of oil palm plantations by year-end.

“The country currently has a total of 5.8 million ha of oil palm plantations, and we are confident all planters and millers will succeed in obtaining the MSPO certification by December 2019,” he said. Mah said the government would continue to improve the MPSO principles and criteria in order to be in line with international sustainability best practices, leading to recognition by other countries and international audit bodies. He noted that the government had allocated RM150 million in incentives to ease the financial burden of oil palm smallholders, as well as to achieve the MPSO certification mandatory compliance by all planters nationwide by Dec 31, 2019. Underlining the government’s high commitment towards the effort, Mah said it had approved various incentives, including up to 100 per cent funding for costs incurred in auditing, storing of pesticides and fertiliser, and buying protective equipment. Source : The Borneo Post

ASIA PALM OIL MAGAZINE | April - June 2018

MSPO

MSPO Standards Launched

Implementation of the MSPO Certification Scheme started in January 2015. The scheme is implemented by MPOCC, an independent organisation setup in October 2015. Since then, MSPO certification has been on a voluntary basis.

total of 758,923 hectares (ha) of oil palm plantations and 70 mills have obtained the Malaysia Sustainable Palm Oil (MSPO) certification as at February 2018, said Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong.

Timelines Towards Year 2019

PLANTATIONS MSPO CERTIFIED, SAYS MAH

Mah (middle) launches the MSPO Appreciation Day yesterday. Also present are Malaysian Palm Oil Certification Council chairman Datuk M.Nagarajan (second right) and chief executive officer Harnarinder Singh (right). — Bernama photo

Estates

Smallholders

< 40.46 ha 100% Auditing Fee

40.46 ha - 1,000 ha 70% of Auditing Fee > 1,000 ha 30% of Auditing Fee

Processing Facilities

Mills, Kernel Crushers & Refineries

30% Auditing Fee

Timelines for Mandatory MSPO Certification

31 DEC 2018 With Certification (e.g. RSPO, ISCC)

Certified entities (estates and processing facilities) have to obtain MSPO certification by 31 December 2018.

31 DEC 2019 Smallholders

30 JUNE 2019 Without any Certification Oil palm entities (estates and processing facilities) without any certification will have to obtain MSPO certification by 30 June 2019.

All independent and organised smallholders will have to obtain MSPO certification by 31 December 2019.

Is your palm oil MSPO certified? If not, let us get you started. Contact us today

MALAYSIAN PALM OIL CERTIFICATION COUNCIL ( MPOCC ) 15th Floor, Bangunan Getah Asli (Menara),148, Jalan Ampang, 50450 Kuala Lumpur, Malaysia April - June 2017 | ASIA PALM OIL MAGAZINE tel +603 2181 0192 | fax +603 2181 0167 | info@mpocc.org.my | www.mpocc.org.my

20 INDUSTRY NEWS

CPTPP WILL BE GOOD FOR MALAYSIA ASIA PALM OIL MAGAZINE | April - June 2018

he Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the rebranded TPPA, was finally signed by 11 countries on March 8.

The pact had earlier raised anxiety among certain parties that it would jeopardise Malaysia’s sovereignty and undermine the well-being of its citizens. But if we look at the bigger picture, the pact will benefit the country in the long run because our economy depends largely on trade activities. According to Moody’s last week, Malaysia would be the biggest winner from the deal as the CPTPP covers a market of nearly 500 million despite the absence of the United States. This fact was reinforced by the Peterson Institute for International Economics’ (PIIE) research, which showed that the CPTPP would benefit palm oil, rubber and electronics exporters like Malaysia with export access to new markets including Canada, Peru and Mexico.

Looking at current data by the Malaysia External Trade Development Corporation (Matrade), Malaysia’s dependence on trade is undeniable, recording RM935.39bil in exports last year and RM838.14bil in imports. Malaysia enjoyed a trade surplus of RM97.28bil. The electrical and electronics sector remains the top exporter accounting for 36.7% while palm oil products stood at 5.8%. Malaysia is also currently the largest producer of gloves, controlling almost 65% of the world market. In view of this, the CPTPP will encourage existing manufacturers to expand as it provides access to new or untapped markets. It will indirectly reduce our reliance on the US market as well. Source : The Star Online

April - June 2017 | ASIA PALM OIL MAGAZINE

INDUSTRY NEWS 23

“Our focus will be to help the smallholders because it is important that they are not left behind in this process,” he said. Close to 40% of the total of 5.8 million hectares of oil palm plantations in Malaysia are managed by smallholders. On reports quoting China’s industry officials that there might be a drop in palm oil imports due to ample supply of soya oil, Mah said while this depended on market demand, Malaysia was heartened by China’s assurance that there would be no restrictions. “The fact that China’s authorities do not impose conditions on palm oil and palm oil-based products shows that they recognise our good agriculture practices,” Mah told reporters at the event.

GOOD NEWS FOR MALAYSIAN PALM OIL

T Keong.

here should be no issue about Malaysian palm oil entering the European Union market when all plantations and mills are certified for sustainability by the end of 2019, says Datuk Seri Mah Siew

The Plantation Industries and Commodities Minister said making it mandatory for all to have the Malaysian Sustainable Palm Oil (MSPO) certification saw the number of smallholders and corporations submitting applications shoot up by 210% over the past seven months. “By the end of next year, we would have fully complied with the EU ruling to certify our palm oil industry for sustainability and good practices. “We hope there will be no more issues or excuses made against our commodity once we meet this requirement,” he said at the MSPO Appreciation Day event here yesterday. The European Parliament last year passed a resolution requiring palm oil exporters to comply with a single certified sustainable palm oil scheme to be implemented from 2020.

ASIA PALM OIL MAGAZINE | April - June 2018

At the event, the minister also presented the certification to eight plantation companies – Sime Darby Plantation Bhd, JC Chang (Pte) Limited, TDM Bhd, KLK Bhd, Hap Seng Plantations Holding Bhd, Keresa Plantations Sdn Bhd, Sabah Softwoods Bhd and Achi Jaya Plantations Sdn Bhd. Source: The Star Online

The EU also proposed to ban palm oil biofuels by 2020, a move that could threaten the livelihood of thousands of smallholders and industry workers. The MSPO certification scheme aims to certify oil palm plantations, independent and organised smallholdings and palm oil processing facilities based on seven principles, which includes addressing management commitment and responsibility; transparency; compliance with legal requirements; and social responsibility, health, safety and employment conditions. It also addresses good agricultural practices which are essential for sustainable agriculture, producing a highquality product and enhancing productivity through yield optimisation. Mah said that by the end of 2018, the ministry had targeted 1.8 million hectares of oil palm land be certified for good practices, adding the Government had allocated RM150mil to assist 650,000 smallholders in the exercise. “Between now and next year, we will have to work hard to ensure 100% compliance.

In good hands: Mah (centre) and other representatives officiating at the opening ceremony of MPSO Appreciation Day in Putrajaya. — Bernama

April - June 2017 | ASIA PALM OIL MAGAZINE

24 INDUSTRY NEWS

EU PALM OIL MOVE CAN RESULT IN RETALIATION

alaysia will take all necessary steps to protect its palm oil industry and the 650,000 oil palm smallholders, including retaliating against the European Union (EU) if it were to pass a proposal to ban palm oil in biofuel beginning 2021. Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong said he would not rule out Malaysia stopping import of goods from the EU if the ban were to go through. “We are taking a lot of efforts to fight the challenge. If the EU takes unfair actions against our palm oil, it will jeopardise the livelihood of our 650,000 oil palm smallholders. “We do not want any conflict but if the EU presses us, I think nobody will benefit. There are bound to be retaliatory actions,” he told Bernama and the New Straits Times here today. In January 2018, the European Parliament approved a draft proposal to

ban palm oil in biofuel beginning 2021, a decision that would potentially affect the livelihood of millions of oil palm growers in Malaysia, Indonesia and Thailand. Following the move, Mah travelled to several key European countries in February, including France, the United Kingdom, Belgium, Spain and Germany, to seek support and to campaign against the ban. “Most of them are receptive. We have explained that they cannot blame palm oil unfairly, and I am confident these countries will not take action that discriminates against palm oil. “If they stop buying our palm oil, we will stop buying their products,” he said, adding that the government also highlighted the issue with the World Trade Organisation. The EU imported 2.06 million tonnes of palm oil worth RM10 billion from Malaysia in 2017, while the country’s total exports of palm oil increased to RM78bil last year from RM67.8mil in 2016.

ASIA PALM OIL MAGAZINE | April - June 2018

Mah said that palm oil, a very competitive edible oil, was a victim of its own success. “They gang up against palm oil because palm oil is increasing its domination in the world market. In the 90s, palm oil only accounted for 10 per cent of the global vegetable oil market.

Now it dominates 60% and if the trend continues, palm oil will be go on (to dominate) 80 to 90% (of the world market), - he said. He said the anti-palm oil sentiment from developed countries was also a protectionist policy used to protect their local home-grown oils such as grape seed, soybean and olive oil. Malaysia is the world’s second largest palm oil producer after Indonesia, while Thailand is ranked third. Source : The Star Online

CHINA AND INDIA EXPLORED AS NEW PALM OIL MARKETS

hina and India are among the new markets the Government are exploring for the export of palm oil, says Datuk Nasrun Mansur.

The Deputy Plantation Industries and Commodities Minister said the Government would continue to look for new markets for palm oil, following European Union’s decision to ban palm oil biofuels by 2020. “The country’s palm oil industry is facing challenges, especially from the decision by EU to phase out the use of palm oil in its industries. “At the same time, we will also look for new markets such as China and India. Both markets are huge and yet to be fully tapped,” he said in his reply to a supplementary question by Siti Zailah Mohd Yusoff (PAS-Rantau Panjang) in the Dewan Rakyat yesterday.

Siti Zailah had asked what were the measures taken by the Government to ensure that palm oil export continued to grow and that small farmers would not be adversely impacted by the EU decision. Nasrun said that apart from these two countries, the Government was also looking at Middle Eastern countries such as Iran. “Iran is another potential market but the country has not been aggressively buying palm oil yet,” he said, adding that the Malaysian Palm Oil Board has since opened up an office in Tehran, the country’s capital. He added that although a total ban by EU on palm oil would have an impact on Malaysia, it would be cushioned by exports to new markets. Source : The Star Online

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When demand is high and burning has long been practiced, what reason do farmers and developers have to change their habits to more arduous land-clearing methods? “We calculated whether existing incentives in the market are enough to change the situation on the ground,” says Purnomo. “The analysis looks at benefits distrubuted from oil palm plantation development using fire, who benefits, and what alternatives can be adopted to compensate.” The first step is for the market to support certified producers, incentivizing them not to burn as well as to employ value-added farmers. This, however, raises production costs, as well as the cost of fresh fruit bunches (FFB) of oil palm fruits. As this price margin grows, the next step is to make sure that the financial benefits go back into the hands of the farmers, to incentivize their good practices as well. “We know that 20% of fire incidences happen in oil palm plantation areas, so we tried to find out what caused the fires and how to reduce them.”

WHO’S GOT THE POWER?

TURNING DOWN THE HEAT IN INDONESIA’S OIL PALM INDUSTRY GOOD GOVERNANCE AND SUSTAINABILITY INCENTIVES CAN PROVIDE ALTERNATIVES FOR LAND CONVERSION FIRES

n Indonesia, palm oil is a hot industry in more ways than one. In 2015 alone, it contributed USD 20.75 billion to the country’s export revenue. Oil palm plantations cover more than 14 million hectares of the country and, together with Malaysia’s, dominate the global market.

In light of this, a new study led by Center for International Forestry Research(CIFOR) scientist Herry Purnomo looks at the extent to which good governance principles are applied to Indonesia’s palm oil value chain and analyzes options to help reduce the use of forest and land fires in the industry.

However, fire is still widely used in the development and planting of oil palm, including in carbon- rich peatlands. Resulting smoke and toxic haze have impacted the economy, the health and the environment of Indonesia and other Southeast Asian countries. In 2015, Indonesia’s peatland fires contributed to an economic loss of at least USD 16.1 billion and more than 100,000 premature deaths around the region.

“Palm oil is one of Indonesia’s main commodity exports, surpassing oil and gas,” says Purnomo. “But if we do not manage its sustainability, this sector can fail.

ASIA PALM OIL MAGAZINE | April - June 2018

The research focuses on Indonesia’s Riau Province, which experienced massive forest conversion to have the largest area of oil palm plantations in the country. Now, it has the highest domestic frequency of fires too.

In theory, the central government has power to influence the oil palm supply chain through law and policies; district-level governments have the most jurisdiction for law enforcement and information- spreading; and village governments are closest to plantation developers, thus having the responsibility of dealing directly with them. However, good governance for the industry is not as simple as a top-down approach. From consumers to mills, refineries and developers, players in palm oil influence governance processes in different, sometimes unexpected ways. “With the governance analysis, we looked at how existing powers contest,” says Purnomo. “Along the value chain, power is not at the landscape level but at the consumer level, or at the mills and refineries. The central government can only function through the district government, but mills can influence local government using incentives and coercion. “Sometimes the Ministry of Environment and Forestry and the Ministry of Agriculture get the blame for forest and land fire incidences. While potentially, the problem starts from the Investment Coordinating Board (BKPM) welcoming investment for refineries without considering whether there is enough capacity to supply them from legal sources.” Furthermore, the study found that illegal oil palm developers can hold a lot of influence at local levels and force village governments to support them, often through deceptive use of a Certificate of Land (SKT). This imbalance between governance and supply chain capacity can drive actors at the landscape level to meet the mill demands in ways detrimental to landscapes.

Now there are mills everywhere, even in national park areas. People respond by developing plantations everywhere. The fastest and cheapest way is by burning.

“Intermediaries have taken the benefit from this margin until now. Farmers should unite to gain more bargaining power, so once they receive a delivery order, they can cut the middleman and go straight to the mill. This will increase their value added. It is important that palm oil businesses are not only certified but also fair.” Another key step to fire reduction is agrarian reform. While many farmers possess an SKT, the land is still legally part of a state-owned forest area. The unclarity of land status dissuades farmers from investing resources in land. “Why should they spend money, when the government can take their land away at any time? The farmers should be guaranteed land legality at least for 25 years, so they can invest safely.”

CHANGING HEADLINES Recently on the international stage, the European Union in January approved draft measures to ban the use of palm oil in motor fuels by 2020. While this sent Southeast Asian governments reeling, Indonesia’s included, Purnomo believes that this boycott will change little. Instead, he says the EU market should give incentives for sustainable production, and Indonesia should create an environment in which that can be done. “Incentives can change the situation. The government of Indonesia should be more transparent with environmental problems faced by the palm oil industry, show real progress in improving the industry’s sustainability, draw a clear roadmap to meet international standards in three to five years and invite the EU to participate in palm oil in more constructive ways.” Cleaning up supply chains will come at a cost, but market incentives combined with strengthened national policies and international regulators (namely the Indonesian Sustainable Palm Oil system and Roundtable on Sustainable Palm Oil) can together compensate to make this effort viable – and cool things down. Source : Forests News

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France, meanwhile, has promised to oppose the EU ban and has vowed cooperation with Malaysia. France and the UK are notably both bidding to sell fighter jets to Malaysia, a defense contract valued at more than US$2 billion.

EUROPE-ASIA TRADE WAR LOOMS OVER PALM OIL

Mah, known as Malaysia’s global palm oil ambassador, has likened the EU proposal to “crop apartheid.”

Last April, the European Parliament voted in favor of a draft law that aims to ban on palm oil biofuel imports to the EU beginning in 2021 due to environmental concerns the crop is contributing to deforestation.

Indonesia and Malaysia employ around 3.5 million people in the palm oil industry, generating a combined export value of over US$40 billion annually.

Draft EU law seeks to ban all palm oil biofuel imports by 2021, a move Malaysia has likened to ‘crop apartheid’ and Indonesia has vowed to retaliate

ah Siew Keong, Malaysia’s minister for plantation industries and commodities, is on the front line of a looming trade war against what he sees as unfair European Union (EU) trade practices.

The European Commission, the EU’s principal executive body, has yet to formulate a final draft law. Each of the EU’s 27 national governments will have to ratify the ban before it is uniformly enforced. Still, the proposed move has spurred a diplomatic row with Malaysia and Indonesia, the world’s top palm oil exporters, and now threatens to spiral into tit-for- tat punitive trade measures.

Felda settlements in Malaysia are synonymous with rural aid programs and regional poverty reduction efforts. Nearly 640,000 smallholders in the country account for some 40% of global palm oil production. Given the EU’s clout as the world’s second-largest palm oil importer, trailing only India, Malaysian producers fear a precipitous drop in future demand and potential European divestment in the industry. Malaysia stands to lose about US$500 million in annual revenue if the EU goes ahead with palm oil curbs, analysts cited by Reuters estimate.

Malaysian Plantations Minister Mah Siew Keong has threatened retaliatory trade measures against any EU ban on palm oil imports. Photo: Youtube

Combined palm oil output between Indonesia and Malaysia is forecast to hit to record highs in 2018, putting further downward supply-side pressure on prices.

ASIA PALM OIL MAGAZINE | April - June 2018

Agriculture fires in Indonesia, where forest cover has dropped by almost a quarter since 1990 according to United Nations and World Bank data, have been linked to a deterioration in air quality that is blamed for respiratory illnesses, deaths and economic losses. Environmental groups advocate for restrictive criteria for palm oil imports to offset the crop’s deleterious effects, putting pressure on Malaysian and Indonesian producers, who together account for more than 85% of global supply, to conform.

The draft law, he notes, does not prohibit other similar oils such as rapeseed, olive and soybean that are mostly grown in EU member states.

Malaysia’s Federal Land Development Authority (Felda), a state body founded to organize smallholder cash crop plantations, is presently the world’s largest crude palm oil producer.

FILE PHOTO: An aerial view shows a palm oil plantation in South Sumatra province, Indonesia, October 16, 2010. REUTERS/Beawiharta/File photo An aerial view shows a palm oil plantation in South Sumatra province, Indonesia, October 16, 2010. Photo: Reuters/Beawiharta Businesses and smallholders have been accused of setting forests and carbon-dense peat lands aflame to clear land for plantations. Illegal slash-and- burn methods have given rise to annual bouts of transnational air pollution, blanketing Malaysia, Indonesia and Singapore with severe haze.

Indonesian authorities have already vowed to limit European imports as a retaliatory trade measure, though details are scarce on what products they may aim to target. Malaysian minister Mah has gone further, threatening to respond with “might and tact” by pulling back from pending free trade talks with the EU.

Workers collect palm oil fruit inside a palm oil factory in Sepang, outside Kuala Lumpur, June 18, 2014. Photo: Reuters/Samsul Said The edible vegetable oil is a lucrative commodity with diverse applications ranging from use as a cooking oil to an ingredient in processed foods, pharmaceuticals, soaps, detergents and cosmetics. Global per capita consumption of palm oil has doubled since 2000, reaching 17 pounds (7.7 kilograms) in 2015, reported Bloomberg. Palm oil is also blended with fossil fuels such as diesel to create renewable fuel sources for motor engines that have better fuel economy and emit fewer greenhouse gases like carbon dioxide. Some conservation groups, however, believe biofuels contribute to biodiversity losses, higher food prices and an increased reliance on fertilizers. But the bigger criticism is environmental, with widespread charges the industry has contributed to massive deforestation.

Analysts estimate that Malaysia could lose US$500 million in annual revenue should the EU ban come into full effect, blighting the fortunes of smallholder settlements that have long been a loyal vote bank for the United Malays National Organization (UMNO)-led government.

FILE PHOTO: French fighter jet Rafale made by Dassault performs during the Breitling Airshow in Sion, Switzerland September 15, 2017. REUTERS/Denis Balibouse/File Photo A French fighter jet Rafale made by Dassault performs during the Breitling Airshow in Sion, Switzerland September 15, 2017. Photo: Reuters/Denis Balibouse The minister has also threatened to steer lucrative defense industry deals away from EU suppliers and move towards closer ties with post-Brexit United Kingdom (UK) to pressure European governments not to support the palm oil ban. The UK government, which is reportedly split on the palm oil issue, has not confirmed its support of the proposed EU ban, though its High Commissioner in Malaysia reportedly described the measure as “unfair” and contrary to international trade practices in a meeting with Mah, according to media reports.

Though the prospect of lucrative contracts and strategic market access have compelled some European countries to oppose the palm oil ban, rising pressure on palm oilproducing nations is prompting wider adoption of sustainable procurement policies as national certification schemes are introduced more broadly. In February, Malaysia’s government announced that the Malaysian Sustainable Palm Oil (MSPO) certification scheme, a bid to introduce sustainable agricultural practices across all palm oil plantations, would be made mandatory. Some, however, say the measures fall short of European sustainability schemes. Demand for sustainably produced products gave rise to the multi-stakeholder Roundtable on Sustainable Palm Oil (RSOP), a voluntary governance scheme initiated by transnational nongovernmental organizations and corporations, in 2004. It introduced a comprehensive certification scheme in 2007, though experts and environmentalists now regard the scheme’s effectiveness as limited. RSOP critics helped to propel the “No Deforestation” movement in 2013 that prompted Asian agribusiness giant Wilmar International to adopt a new “No Deforestation, Peat, Exploitation” (NDPE) standard that introduced supply chain traceability and banned suppliers from destroying forests and peatlands. Around 60% of global palm oil trade is now believed to meet the NDPE norm. With that progress and threats of retaliatory trade measures, some doubt the EU will actually implement the palm oil ban, which may anyway also run afoul of World Trade Organization (WTO) rules. “It seems rather unlikely that legislation will be passed given the wider economic interests of a number of EU members in maintaining trade, investment and defense links with Malaysia,” says Helen E S Nesadurai, a professor of international political economy at Monash University Malaysia.

A giant SOS carved into an oil palm plantation in Sumatra by Lithuanian artist Ernest Zacharevic to draw attention to the damage caused by deforestation to wildlife and indigenous people in Indonesia. Picture courtesy: Ernest Zacharevic A giant ‘SOS’ carved into an oil palm plantation in Sumatra by Lithuanian artist Ernest Zacharevic to draw attention to the damage caused by deforestation to wildlife and indigenous people in Indonesia. Photo: Ernest Zacharevic via Reuters

Source : Asia Times

April - June 2017 | ASIA PALM OIL MAGAZINE

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GREENPEACE SAYS BRANDS REFUSING TO REVEAL PALM OIL SOURCES

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reenpeace says several major household brands including Hershey and Johnson & Johnson have failed to disclose where they get their palm oil from despite vows to stop buying from companies that cut down tropical forests to grow the widely used commodity. The environmental group said Monday that in January it asked 16 major brands to reveal their suppliers of palm oil, which is mainly grown in Indonesia and Malaysia and used in a slew of consumer products from snacks to cosmetics. It said eight disclosed the information and eight refused. Greenpeace said that adds to concerns international consumer goods companies are “way off track” in meeting a 2010 commitment to remove deforestation-linked palm oil from their supply chains by 2020. “Corporate commitments and polices have proliferated, but companies have largely failed to implement them,” it said. Colgate-Palmolive, General Mills, Mars, Mondelez, Nestle, Procter &

Gamble, Reckitt Benckiser and Unilever agreed to publicly disclose the mills that produce the palm oil they buy and the names of groups that control the mills. Ferrero, Hershey, Kellogg’s, Kraft Heinz, Johnson & Johnson, PepsiCo, PZ Cussons and Smucker had not provided the information, according to Greenpeace. PepsiCo said in a statement Monday that a list of the mills that make the palm oil it uses would be released “in the coming days.”

PepsiCo remains committed to our goal of 100 percent certified sustainable palm oil by 2020, - the company said. Globally, four industries — palm oil, soya, logging and cattle rearing — are the biggest destroyers of the virgin forests that are a crucial buffer against the rise in global temperatures. Indonesia, which has overtaken Brazil as the country cutting down its forests at the fastest rate, lost 24 million hectares of rainforest between 1990 and 2015, Greenpeace said citing government data.

ASIA PALM OIL MAGAZINE | April - June 2018

“Alarmingly, the destruction of Indonesia’s rainforests for palm oil shows no signs of slowing down,” the group said. Groups representing the palm oil industry in Indonesia and Malaysia contend that much of the opposition to palm oil is a protectionist effort by rival industries in Western nations. They point to an initiative known as the Roundtable on Sustainable Palm Oil as evidence they are taking conservation and other commitments seriously. But Greenpeace said neither the industry initiative nor governments can be relied on to prevent palm oil producers from clearing forests. “Palm oil traders, typically corporations that also have plantation interests, continue to allow oil from rainforest destroyers into their mills, refineries and distribution systems,” it said. Source: abcNEWS

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MALAYSIA SAYS EU PALM OIL CURBS COULD WEIGH ON FRANCE IN FIGHTER JET DEAL

alaysia, the world’s No.2 producer of palm oil, on Thursday said the European Union’s decision to curb imports of the commodity could impact France’s hopes of winning one of Asia’s biggest fighter jet deals.

MALAYSIA’S ECONOMY TO GET BOOST FROM EXPORTS, CONSUMPTION IN 2018-C.BANK

France’s Rafale jet, built by Dassault Aviation, had until recently been seen as the frontrunner in Malaysia’s plan to buy up to 18 new fighter planes in a deal potentially worth over $2 billion (1.44 billion pounds), but negotiations hit a snag after European lawmakers pushed to stop using palm oil in motor fuels. Malaysia said earlier this week that it would not shy away from a trade war and that it would respond with “might and tact” if the EU does not back down on curbing palm imports. “As you know, the jet fighters the French are looking at, the Rafale, are also competing with the Brits who have left the EU. So they have to take that into consideration (in relation to palm oil curbs),” Malaysia’s defence minister, Hishammuddin Hussein, said at a news conference outside parliament. Britain’s BAE Systems has been on a consistent and public campaign for nearly a decade now to win the Malaysia contract, even establishing a regional office in the capital, Kuala Lumpur. Hishammuddin’s latest statement raises hopes for BAE, which looked to be on the backfoot after Malaysian Prime Minister Najib Razak said that he had discussed the possible purchase of Rafale fighters with Francois Hollande during the then-French president’s visit in March last year. Both Dassault and BAE did not immediately respond to requests for comment.

set to be a bitter fight between Prime Minister Najib Razak and his one-time mentor and a former premier Mahathir Mohamad.

In its annual report released on Wednesday, Bank Negara Malaysia (BNM) said private consumption will also help to boost growth, forecasting 5.5-6 percent expansion in 2018, up from 5-5.5 percent the government had forecast in its annual budget in October last year.

Malaysia’s gross exports were expected to climb 8.4 percent this year, slowing from 2017’s preliminary figure of 18.9 percent growth.

alaysia’s economy is expected to grow at a faster pace than forecast earlier thanks in part to improving global demand, the central bank said, but it warned of risks to the outlook from monetary tightening in advanced nations and heightened trade protectionism.

FILE PHOTO: Malaysia’s Defence Minister and acting Transport Minister Hishammuddin Hussein speaks at a news conference inside the hotel near the Putra World Trade Centre (PWTC) in Kuala Lumpur April 17, 2014. REUTERS/Samsul Said

Southeast Asia’s third-largest economy could lose some $500 million in annual revenue if the EU goes ahead with its plan to crimp palm imports, analysts have estimated.

not just look at economic considerations separate from other considerations, especially when it come to defence because we do have other options,” he said.

The move also adds to the troubles of Prime Minister Najib, whose ruling coalition will rely heavily on the votes of over 600,000 palm oil plantation smallholders and their families in national polls that must be held by August.

Malaysia has for several years been weighing France’s Rafale jet and the Eurofighter Typhoon, built by a European consortium including BAE, as it looks to replace its Russian MiG-29s most of which are grounded.

Hishammuddin said Malaysia “cannot put a price tag” on the interests of the country and its people when negotiating bilateral deals. “So (to) those who want to have strong bilateral relations with us, do

ASIA PALM OIL MAGAZINE | April - June 2018

However, a decision has been delayed due to the upcoming national polls and a shift in Malaysia’s focus towards upgrading aerial surveillance capabilities. Source: Yahoo News

The Southeast Asian nation has enjoyed an export boom, while public spending on infrastructure gave an extra fillip to gross domestic product which was up 5.9 percent in 2017 - its best in three years. In January, the central bank raised interest rates for the first time in over three years, joining the likes of the Federal Reserve and the European Central bank in tightening monetary policy. The Malaysian rate hike signalled confidence in the economy, and came well ahead of the general elections that must be held by August, which is

“Malaysia’s export performance will be supported by favourable demand from major trading partners, continued expansion in the global technology upcycle and broadly sustained commodity prices,” BNM said.

It cautioned about risks to exports from any unfavourable shifts in monetary and regulatory policy in advanced economies, rising trade protectionism among major trading partners, and the potential for China’s economy to moderate more than expected. The central bank said these same global factors could rekindle volatility in the ringgit currency, which has continued to strengthen in 2018. Governor Muhammad Ibrahim said domestic demand underpinned the forecast growth upgrade. “For our exports this year, IMF projected 3.9 percent (global economic)

growth and we will benefit from that, provided there are no trade wars, volatility in financial markets and no surprises on monetary policies,” Ibrahim told reporters. Private sector expenditure will be supported mainly by continued growth in wages and employment, business optimism and favourable demand, the central bank said. Headline inflation will average lower to 2-3 percent from 3.7 percent in 2017. The bank said despite expectations of higher energy and commodity prices, the higher base effect in 2017 will result in a smaller contribution to headline inflation. A stronger ringgit could also alleviate the impact of rising oil prices. “Given the dependency of domestic inflation on the trajectory of global oil prices, there remains a high degree of uncertainty surrounding the inflation projection,” the bank said. Malaysia, the world&#39;s secondlargest exporter of liquefied natural gas and crude palm oil (CPO), projected the rise in commodity prices to slow this year. It also expects CPO price to decline due to elevated inventory levels. Source: webindia123

April - June 2017 | ASIA PALM OIL MAGAZINE

34 REFINERY NEWS

FGV EYES NEW PALM OIL MARKETS AS INDIA, EUROPE CURB IMPORTS

FGV CHIEF EXECUTIVE ZAKARIA ARSHAD SAYS THE COMPANY IS PLANNING TO BUILD REFINERIES IN MYANMAR, THE PHILIPPINES AND CAMBODIA.

elda Global Ventures Holdings Bhd (FGV), the world’s biggest crude palm oil producer, is looking to new markets as traditional customers India and Europe take steps to curb purchases, the company’s chief executive said today.

The European Union in mid-January approved draft measures to reform its power market and reduce energy consumption to meet more ambitious climate goals. The draft includes banning the usage of palm oil in motor fuels from 2021.

The firm is planning to build palm oil refineries in Myanmar, the Philippines and Cambodia in the next two years, Zakaria Arshad told Reuters in an interview.

India, the world’s biggest edible oil importer, last week raised import tax on crude and refined palm oil to the highest level in more than a decade, in a move designed to support local farmers.

“We want to spread our sales to various countries, looking at new markets which are looking for additional crude palm oil and olein supply,” he said. Peanut oil supplies have not been able to keep pace with growing demand in Myanmar, Zakaria said, meaning there is scope to boost palm oil sales there. The Philippines, which traditionally uses coconut oil, is facing tight supplies of the product as coconut water becomes popular with some health-conscious consumers. “There is (also) scope to meet growing demand in Pakistan where we have a refinery,” Zakaria said on the sidelines of an industry event in Kuala Lumpur.

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India has to import, they have (supply) limitations. Sooner or later they have to import palm oil. This is only temporary - Zakaria said. FGV’s production of fresh fruit bunches of palm oil are expected to rise 15% in 2018 from a year ago, Zakaria added. “We are looking at a much better crop this year,” he said. “We have new areas that are starting production and we have sorted out other issues such as labour shortages and the weather has improved.” Two thirds of palm oil produced at FGV comes from smallscale farmers across Malaysia. Source: www.freemalaysiatoday.com

ASIA PALM OIL MAGAZINE | April - June 2018

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36 INTERNATIONAL NEWS

INDIA TO DOUBLE STATE PURCHASES OF OILSEEDS, PULSES TO HELP FARMERS

INTERNATIONAL NEWS

OKOMU NIGERIA SEES SUBDUED 2018 FOR PALM OIL ON MARKET WOES

komu Oil Palm Plc, Nigeria’s second-largest producer of palm oil, expects its sales will probably slow for the rest of the year due to a supply glut and weak consumer demand.

Prime Minister Narendra Modi has been trying to cut India’s edible oil import bill of more than $10 billion a year. India imports vegetable oils mainly from Malaysia, Indonesia, Brazil and Argentina. Pulses are bought from Australia, Russia, Tanzania, Canada and the United States.

ndia’s cabinet approved on Wednesday doubling state purchases of oilseeds and pulses from farmers, in a bid to boost local output and prevent distressed sales. The amount that state agencies guarantee to buy at pre-set prices will double to 190 billion rupees (US$2.9 billion) for a five-year period ending in 2021/22, government spokesman Frank Noronha said in a tweet. India is the world’s biggest edible oil buyer and frequently imports pulses, or lentils, because many Indian farmers

tend to swing from one commodity to another depending on government incentives, leading to oversupplies one season and shortages in the next. The government has been seeking ways to encourage farmers to invest in those commodities.

This will help in protecting the farmers producing these commodities from making distressed sales during peak arrival periods and to provide remunerative prices with a view to encourage higher investment and production ... -Noronha said.

ASIA PALM OIL MAGAZINE | April - June 2018

Prime Minister Narendra Modi has been trying to cut India’s edible oil import bill of more than $10 billion a year, but consumption has far outpaced demand in the country known for its love for deep-fried food. India imports vegetable oils mainly from Malaysia, Indonesia, Brazil and Argentina. Pulses are bought from Australia, Russia, Tanzania, Canada and the United States. ($1 = 65.1550 Indian rupees).

There’s a surge of illegal shipments from neighboring West African countries in recent months contributing to oversupply of the domestic market, Okomu Chief Executive Officer Graham Hefer said in a Feb. 12 telephone interview. There are fears the situation may get worse if the government gives import waivers “to some people for political reasons” ahead of 2019 general elections, as happened in the past, he said. Nigeria’s central bank in 2015 stopped importers of 41 items, including palm oil, from getting foreign exchange from official channels. That helped to support local producers and conserve dollars after the price of crude, the nation’s major revenue earner, plunged in mid-2014. The measure was a boon to Okomu as its revenue surged 47 percent and profit rose 85 percent in 2016. While the restriction remains, palm-oil shipments increased last year as importers gained more access

to foreign exchange following a new trading window introduced by the central bank for investors. There hasn’t been enough demand to absorb all that supply as Nigeria recovers from its worst economic slump in 25 years, Hefer said. “We hope that the bottom line will be more or less in line with what we had before because we are closely monitoring our costs,” Hefer said. “We make sure we find the cheapest supplier in the market and that which can give us the best quality and the best returns on input.” Okomu, which currently mills 30 metric tons of palm oil per hour, plans to double its capacity by 2020 on the completion of a $50 million plant, he said. The company operates 33,000 hectares (82,000 acres) of oil palm and rubber trees, according to its website. With a drop in demand for rubber from China, Okomu is seeking new markets in other countries, Hefer said, without identifying the targeted markets. The company sells palm oil locally and exports rubber. Source : www.bloomberg.com

Source: The Star

April - June 2017 | ASIA PALM OIL MAGAZINE

38 INTERNATIONAL NEWS

EQUATORIAL PALM OIL REPORTS PROGRESS WITH PALM OIL MILL CONSTRUCTION

quatorial Palm Oil PLC said Tuesday that the Palm Oil Mill is currently under construction at the Palm Bay Estate in Liberia in a modular fashion, with two lines of 30 metric tonnes per hour planned.

The construction of the first module is progressing well, with commissioning expected in the third quarter of 2018. The first shipment of crude palm oil is expected to take place in the final quarter of 2018. The mill will include a kernel crushing plant and biogas plant which is set to be completed in the third quarter, with the kernel plant having a capacity of 10 metric tonnes per day. In addition, the biogas plant will capture methane from the palm oil mill effluent to generate electricity for use in the mill and surrounding office and renewable buildings. In addition, the Liberian government approvals for construction of the bulking station have been obtained, and is expected to be completed in the third quarter.

ASIA PALM OIL MAGAZINE | April - June 2018

Equatorial Palm Oil also said that it has continued work at both the Palm Bay and Butaw estates to tend to the already 7,900 hectares planted since 2011, and with further land development awaiting the conclusion of certain assessments and consents, it is unlikely that any further land development will take place during the rest of the company’s financial year to the end of September. “The commissioning of the new POM in the third quarter of 2018 will be a significant milestone for EPO and for the re-development of the palm oil industry in Liberia. Working with the newly elected government of President George Manneh Weah and key stakeholders, we shall look to progress a sustainable palm oil operation in Liberia as the region represents a major opportunity to create a key, new global supply hub for seaborne export to international markets,” said Executive Director Geoffrey Brown. Source: GNN Liberia

April - June 2017 | ASIA PALM OIL MAGAZINE

40 COVER STORY

41 Organization Background and History. A Walk Down Memory Lane For Biotec: 1984 1986 1988 90’s:

1999 2006

2008 2009 2010

INTERVIEW WITH

MR. PHILIPPE CONIL Group CEO of Biotec International

2013 2014 2015

Creation of Biotec in Belgium Biotec is set up in Colombia First bio-digester to treat the effluents of palm oil mills in Latin America (Colombia) - Wave of bio-digesters (UASB reactors and other models) for paper industry, livestock and poultry slaughterhouses, coffee industry, sugar mills, yeast factories, rendering plants and urban wastewater. - Composting plants for sugar cane filter mud cake, household waste, vegetable waste. First Palm Oil Mill Effluent (POME) biodigester in the world in the form of a covered lagoon (Colombia) First POME bio-digester in the world registered as CDM (Clean Development Mechanism - tool of the Kyoto Protocol) (Honduras) Establishment of Biotec International Asia (Malaysia) First biodigester for lemon juice effluent in the world (Argentina) First system in the world of monitored liquid organic fertilization in oil palm plantation (Honduras) - application by macro-drippers First bio-digester that combines POME and effluent from biodiesel plant (Colombia) First large POME bio-digester in Africa (Nigeria) First POME bio-digester in Brazil

Biotec is a Belgian company established in 1984, with its main office located in Cali, Colombia. We have been actively operating in Colombia for about 30 years already. Notably, we have also set up a company in Malaysia 10 years ago to cater to the South East Asia market, where our wide scope of business includes organic fertilizers, waste water treatment and renewable energy. We are highly renowned for our biogas plants. We promote sustainability for various agro-industries by providing our products and services to clients, and enabling them to be certified. For example, from the Roundtable of Sustainable Palm Oil (RSPO) or Malaysia Sustainable Palm Oil (MSPO) body that provides certification to the palm oil industry. I am also proud to say that we are the first company in the global palm oil industry to get the Certified Emission Reduction (CER) accreditation. A huge accolade for us.

From the left, Philomena Joseph, Human Resource Executive; Julee Edmund, Director; Nur Aini Yee, Accounts Executive.

ASIA PALM OIL MAGAZINE | April - June 2018

Mr. Philippe Conil and the team of Biotec International Asia Sdn Bhd.

Team Profile I graduated from the University of Brussels in 1981, with a degree in Bioengineer after which I founded Biotec in 1984. I have spent a lifetime in research and development (R&D) dedicated to the field of biogas, bio-fertilizer and sustainability for the industries. Biotec houses a variety of international teams (e.g. the Malaysia team, Indonesia team, foreign team etc.) with professional knowledge, where some of them have been working for 8-10 years with the company. We have an experienced team here from South America to support and provide training to the local team. The team is well structured and work harmoniously with each other for efficient performance. For example, we have the Project Management Office and Facility Management Office which have different roles based on their expertise to ensure each project is implemented successfully. Interview Questions:

As a world leader in palm oil mill waste water and by-products treatment since 1988, what are the major factors contributing to the success of Biotec?

I always believe that one should have a clear direction and objective so as to achieve the target with proper tools. In the case of Biotec, our objective is to achieve sustainability for the industry while adding value to the by-products. We provide solutions for a sustainable agroindustry, be it palm oil, sugarcane, livestock, or others. This involves recycling carbon and nutrients recycling, leading to zero waste. We endeavour to always look for ways to improve soil fertility and decrease chemical fertilization requirement. Most people are so focused on the end product (like palm oil) that they forgot about sustainable agricultural practices. Attributing to this, we are backed by a strong Research and Development (R&D) background to develop solutions to solve problems faced by mills and factories. We also have a wide portfolio of products and services which allow the company to remain resilient during any economic downturn in the last 35 years. In the economic crisis of 1986, oil prices were down and people lacked interest in

investing in the renewable energy sector, as such, we decided to focus on the biofertilizer business during those turbulent times until the situation improved in 2005.

What is your company’s unique competitive advantage that makes you stand out from competitors?

Our main competitive advantage is that we see the ‘big picture’ in the agro-industrial business and by-products valorisation options based on our global experience (across 3 major continents). Biotec is equipped with over 30 years of experience in the palm oil industry starting from its first large biodigesters and ferti-irrigation systems in palm oil mills in Latin America in 1988. We also focus on the integration of the “EnvironmentalEnergy- Agriculture” components in our solutions rather than tackling each one on its own. This unique integrated solution approach enables the achievement of sustainability. A sustainable plant should be still operating in its prime when we revisit it 10 years later while we provide maintenance and services to our clients in the long term. Biotec also owns a large portfolio of products and services for different agro- industrial sectors, not limited to biogas plants which are our primary source of revenue. For example, when a palm oil mill approaches us for biogas plant services, we could introduce them simultaneously our other services such as waste water treatment because these are actually interconnected to palm oil processing. We may also provide solutions to handle the empty fruit bunch too. Our business model is not limited to Engineering, Procurement, and Construction (EPC) but also includes Operation (at least for one year). Operation allows us to “live” and experience the daily problems and to orientate our R&D, and engineering to real sectorial problems. It also allows us to give a permanent feed-back to the engineering team and construction team, generating highly valued improvements. Our design team located in Cali, Colombia, would receive the feedback from all parts of the world and would then channel back these experiences and improvements.

April - June 2017 | ASIA PALM OIL MAGAZINE

42 COVER STORY

Just like any other company, Biotec does experience challenges from time to time. One of it is to find a way to reduce construction time where we are currently addressing this by improving our group-wide standardization and our development in fast-mounting tanks. Other challenges include convincing the palm oil sector and Department of Environment (DOE) that by-products (POME and EFB) management is fundamental to achieve environmental sustainability and that most of the nutrients required by the plantations are available in those by-products. Why don’t we complete the cycle as nature has always done it before? Lastly, we have the challenge to also offer, in remote places of Malaysia and Indonesia, the new Biotec concept of “gas farms” (biodigesters fed with grass) to generate energy and local economy. Biotec aims to become a large-scale renewable energy producer using the gas farms concept, replacing progressively fossil fuels and establishing a decentralized power distribution system.

Where do you see Biotec in the next 5 years?

What do you feel about the standard sustainability in Malaysia now? How do you think it can be improved?

integrated management of organic matter

The Malaysian palm oil landscape is currently gaining speed in the adoption of sustainability practices and it is great that the industry itself is being responsible in this important area. Of course there is always room for improvement, and Biotec is ready to lead the industry towards sustainable palm oil via its solutions in biogas and biofertilizer. Paired with our experience since 1988 in Latin America, we are confident in being the leader of this initiative.

CPO

Any good interesting advice you would like to give to the palm oil industry players so they could learn from your experience?

Some people focus on the end products such as extracting the palm oil but have neglected sustainable agricultural practices. With proper management, by-products could bring additional income too. We also advise those who are thinking of joining the biogas trend to not make decisions on starting a biogas plant construction straightaway or even jumping into the biodigester model, without a proper pre-feasibility study. Such a study would allow you to have a clearer picture on POME and empty fruit bunch (EFB) management for a more sustainable practice in your business. A “road map” is needed before we chart into sustainable POME and EFB management. Biogas may be part of that journey, but there may also be other less well-known paths that can complement biogas and ultimately optimizing the profitability of a biogas plant. Only the “big picture” allows the due integration of the “bio-tools” inside the CPO business. Hence, before leaping forward just like everyone else, make sure you have an idea of what lies ahead.

BREAKTHROUGH/technology Ferti-irrigation

Evaporation+Dryer

FER MEALU T V USD $

T FFB

Control Room+SCADA

TERNATI O C IN TE I N N E R

L NA

BIO

Moreover, we also plan to develop deeper relationships and alliances with Malaysian companies such as suppliers, energy users and fertilizer distributors etc. We would also like to engage more with organizations such as the Roundtable of Sustainable Palm Oil (RSPO), Malaysian Palm Oil Board

Palm Oil Sustainability

ZER ILI E

We strive to lead the local and global palm oil industry towards POME valorisation as bio-fertilizer, either in liquid form (monitored ferti-irrigation system) or in solid form (evapo-drying system). This year, we are introducing a new, disruptive concept of a combined solution of biodigester, evaporator and dryer to transform palm oil mill effluent (POME) into a high value, powder-form bio-fertilizer that can replace chemical fertilizers which are currently widely used in the industry. We also plan to provide Operation and Maintenance (O&M) services for Business Developers as well as for large plantation groups since O&M is a key factor that can “make or break” your biogas and bio-fertilizer systems.

(MPOB) and the Malaysian Palm Oil Certification Council (MPOCC). Establishing a good relationship with these organizations will enhance our collaborations in the future to achieve sustainability for the palm oil industry.

What major hurdles do you all face in the industry?

mental Best Envircoan Impact tegory

ASIA PALM OIL MAGAZINE | April - June 2018

April - June 2017 | ASIA PALM OIL MAGAZINE

SPECIAL INSIGHT 45

“The consultation process is getting more and more challenging, because it touches the lives of more and more people,” says Webber. RSPO conducted one round of consultations last October, and the next round will take place in April. RSPO then has six months to consolidate feedback and finalise the criteria, which must be submitted for endorsement at the next general assembly meeting in November.

WHAT 2018 HAS IN STORE FOR SUSTAINABLE PALM OIL A worker on a palm oil plantation in Colombia. Colombian palm oil firm Daabon is the first in the world to attain the Roundtable on Sustainable Palm Oil’s RSPO Next certification. Image: Solidarity Center, CC BY 2.0 As the Roundtable on Sustainable Palm Oil continues its work of making sustainable palm oil the global norm, its chief executive officer Darrel Webber talks to EcoBusiness about the trends that will shape the organisation’s work this year.

arrel Webber, Chief Executive Officer of the Roundtable on Sustainable Palm Oil (RSPO), heads the industry association’s global effort to break the link between palm oil—an increasingly in-demand commodity— and environmentally and socially devastating consequences such as deforestation, wildlife habit destruction, labour exploitation, and the violation of the rights of indigenous communities in tropical countries.

This is a big task, overseeing the business practices of companies which demonstrate a varying degree of corporate responsibility, placating critics who say that RSPO’s sustainability standards are too low, and explaining the value of certified sustainable palm oil to increasingly conscious consumers.

esque set of criteria which prohibit all RSPO members from clearing forests, developing on peatlands—that is, carbon-rich soils that must be drained before they can be cultivated—and impose other strict criteria, “we should go for the product that moves the most people and brings the greatest change,” says Webber.

Though it seems daunting, Webber finds it helpful to think of these seemingly-competing priorities using an analogy from a far-removed industry: transport.

This is why RSPO’s work this year is prioritising one principle: being inclusive.

“It’s no use buying the perfect car or a shiny Ferrari if only one person can afford to buy it and get around in it,” he tells Eco-Business in a recent interview. “What we need is a bus: it’s ugly and slow, but it brings a lot more people along.” So when it comes to making the global palm oil sector more sustainable, rather than a Ferrari-

ASIA PALM OIL MAGAZINE | April - June 2018

RSPO’s plans for 2018 build on a milestone 2017, where the first ever RSPO Next—that is, a stricter variation of RSPO rules that prohibit deforestation and peatland development, among other things— was attained by Malaysian firm United Plantations and Colombian company Daabon; and zoos and aquariums all over the world started a movement to educate consumers on sustainable palm oil.

This year, the Kuala Lumpurheadquartered RSPO is looking to engage stakeholders that have to date not been a prominent part of the palm oil conversation. Here are four things the Kuala Lumpur-headquartered association has in store for this year:

SUSTAINABLE SMALLHOLDERS

RSPO is focusing closely on encouraging sustainable practices among smallholder farmers, who produce about 40 per cent of the global supply of palm oil, as well as growers in countries that have just begun palm oil cultivation—many of them are in South America and Africa. Traditionally, they often suffer from lower productivity and resort to practices such as burning land to clear it, because they cannot afford better alternatives. To engage smallholders, RSPO last year unveiled a strategy to include these farmers in the certification system through a variety of approaches including funding support for communities, and providing administrative support to smallholders to complete the certification process. “The clock has already started ticking for us in 2018,” says Webber. “It will take a few years to completely roll out since there are millions of smallholders and they are everywhere.”

One key ingredient to success is partnerships, says Webber. “It could be anyone,” he adds. “Technical partners who know about palm oil and agriculture; financial partners who can share the cost burden; or governmental partners who can solve legality issues related to smallholders—anyone interested in changing the lives of smallholders to be more sustainable and successful.” VETERANS AND NEWBIES: A FINE BALANCE

This year is also a big milestone for RSPO as it prepares to deliver a new, updated set of principles and criteria (P&C) after extensive consultation with its stakeholders. First released in 2007, the P&C have been reviewed every five years. A key development in the palm oil sector since the last review in 2013 has been the rise of palm oil cultivation in Africa and South American countries such as Gabon and Ecuador. This means that for the first time, the RSPO P&C will need to set strong standards for the relatively mature and sophisticated practices adopted by industry veterans in countries like Malaysia and Indonesia, some of whom have commitments far exceeding RSPO standards, while at the same time providing an accessible starting point for emerging palm oil producer countries.

For now, he says that it is too early to know how the P&amp;C will change. The current criteria have been widely criticised in the past for being too lax, because there is no firm clause banning deforestation, peatland development, and the use of hazardous pesticides—though many of these have been addressed in the voluntary, more ambitious RSPO NEXT certification.

“Our priority has always been the same throughout the years: To find new friends to work with, and keep those who are already our friends on board by engaging more and keeping them connected to our work.” Datuk Darrel Webber, chief executive officer, RSPO

But while the outcome of the P&C consultation process is uncertain, one thing is clear: RSPO intendsnto ensure that its standards are, as Webber puts it, a bus rather than a Ferrari; they must be accessible, and attainable for everyone. In fact, this was the key outcome from the association’s 15th annual roundtable meeting, held in Bali last November. Key outcomes from the meeting, which unfortunately coincided with the eruption of volcano Mount Agung, included the launch of RSPO’s 2017 impacts report. This documented a 70 per cent increase in RSPO-certified area in Africa, and an 11 per cent rise in Latin America. In Africa, RSPO members also identified 13,405 hectares of new “high conservation value” area— this land cannot be cleared for cultivation—a 4,323 per cent increase from 2016.

April - June 2017 | ASIA PALM OIL MAGAZINE

46 SPECIAL INSIGHT

a f r i c a

In Latin America, the second largest palm oil producing region in the world after Asia, RSPO has been engaging growers on sustainability through measures such as a regional conference for growers, piloting a ‘jurisdictional approach’ to RSPO certification in Ecuador—whereby entire landscapes are certified, rather than individual plots—and a workshop for growers, government officials, and nongovernmental organisers to facilitate this. The new P&C will have strong input from these emerging producer markets, says Webber, adding that hot topics in the consultations include issues around deforestation, labour— especially child labour—and social conflict. “I don’t know for sure if the new criteria is going to be higher or lower, but my personal opinion is that it’s never going to be lower than it is today. There are enough checks and balances in the system to say there are clear minimum requirements.” He adds that regardless of the degree to which the criteria become stricter they ultimately remain a floor for the industry, not a ceiling. “The height of the bar is set by RSPO, but you can certainly jump much higher if you want,” says Webber. “We just say this is the minimum you should clear if you want to perform as a sustainable player.”

TRANSPARENCY AND ACCOUNTABILITY

Another area that RSPO expects major progress this year is making information about its social and environmental impact more accessible, shares Webber. “RSPO has always been working on transparency, a notable example of which is the online maps of all our members’ concessions,” Webber says. “But being transparent and accessible are two different things,” he adds. To make the information on RSPO easier for the general public to understand, RSPO is working on measures such as making its online maps more simple to understand, and presenting the yearly progress updates from members—officially known as ACOPs, or annual communications of progress—more user-friendly.

TECHSPERIMENTS

Lastly, Webber also has his eye on emerging technology trends that could have a huge impact on the palm oil industry. From using sensors to monitor conditions on oil palm plantations more closely to harnessing the potential of blockchain to make the notoriously complex palm oil supply chains more transparent, Webber says that “technology will be the key to sustainable palm oil”.

Driven by the philosophy that it is more important to make it easier for stakeholders to do the right thing than it is to discourage or penalise errant parties, Webber is also keen to explore how Nudge Theory—a behavioural economics principle that explores how to make some decisions intuitive, easy, and effortless for target audiences—can drive change in the palm oil sector. Despite their massive potential, these initiatives are still in their infancy, he says. RSPO is working with a consultant to understand how best to apply emerging technologies to its work, and still learning about Nudge Theory. But regardless of the new tools or strategies RSPO deploys in its work this year, some things are constant, says Webber. As he puts it: “Our priority has always been the same throughout the years: To find new friends to work with, and keep those who are already our friends on board by engaging more and keeping them connected to our work.” “We need to live up to our description as a multi-stakeholder initiative,” he adds. RSPO’s renewed focus on smallholders and emerging markets “is us moving in that direction, and keeping true to our core values that we are inclusive and leave no one behind.”

0T E1 N TH ITIO ED OF

ASIA PALM OIL MAGAZINE | April - June 2018

April - June 2017 | ASIA PALM OIL MAGAZINE 7 INDONESIA INTERNATIONAL PALM OIL CONFERENCE 2018 th

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ASIA PALM OIL MAGAZINE | April - June 2018

NEW PORT BULK TERMINAL SDN BHD Add: PO Box 64, 81707 Pasir Gudang, Johor. Tel: +607 251 1445 Fax: +607 251 1864 NEXSOL (MALAYSIA) SDN BHD Add: Plo 61, Jalan Tegar, Tanjung Langsat Industrial Complex, Mukim Sg. Tiram, 81700 Pasir Gudang, Johor. Tel: +607 861 1611 / 07 253 3888 / 07 252 3177 Fax: +6 07 863 1909 / 07 251 1614 / 07 252 8717 NGO CHEW HONG OILS & FATS (M) SDN BHD Add: Batu 23, Jalan Seremban, Jalan Rinching Hulu, 43000 Semenyih, Selangor Tel: +603 8723 7772 Fax: +603 8723 7773

RAGAMO SDN BHD Add: PO Box 1, Kong Kong Road, 81757 Masai, Johor Tel: +607 255 1111 Fax: +607 255 5117 SAWIT RAYA SDN BHD Add: Lot 2227, Jalan Kasawari, Kebun Baru, 42500 Teluk Panglima Garang, Kuala Langat, Selangor Tel: +603 3122 9333 Fax: +603 3122 9933 SEHCOM INDUSTRIES SDN BHD Add: Plo 291, Jalan Timah 2, Kaw. Perindustrian Pasir Gudang, 81700 Pasir Gudang, Johor Tel: +607 251 3228 Fax: 07 251 3488 SERI ULU LANGAT PALM OIL SDN BHD Add: Lot 3115, Batu 34, Jalan Banting, 43800 Dengkil, Selangor Tel: +603 8768 6630 / 8768 6631 / 8768 6632 Fax: +603 8768 7636 SINN HWAT HENG EDIBLE OILS SDN BHD Add: Lot 121, Lumut Port Indutrial Park, Kampung Aceh, 32000 Sitiawan, Perak Tel: +605 693 1364 Fax: +605 692 0252

SYNN PALM OIL SDN BHD Add: Batu 1, Jalan Kampung Dew, 34700 Simpang, Taiping, Perak. Tel: +605 847 3536 Fax: +605 847 2469 TENCATE GEOSYNTHETICS ASIA SDN BHD Add: 140 Jalan Kapar 27/89, Seksyen 27, 40400 Shah Alam, Selangor. Tel: +603 5191 2609 (ext 706) Fax: +603 5191 4768 TUNG GUAN OIL MILL SDN BHD Add: Batu 26, Sungai Besar, 82200 Benut, Pontian, Johor Tel: +607 424 1054 Fax: +607 424 1895 VANCE BIOENERGY SDN BHD Add: Plo 668 & 669, Jalan Keluli 5, Kaw. Perindustrian Pasir Gudang, 81700 Pasir Gudang, Johor Tel: +607 254 3668 ext 123/126 Fax: +607 254 3778 / 07 252 2778 ZUREX CORPORATION SDN BHD Add: E-06-04, Plaza Mont Kiara, No.2, Jalan Kiara, 50480 Kuala Lumpur Tel: +603 6203 5136/089 863 180 Fax: +603 6203 5134

April - June 2017 | ASIA PALM OIL MAGAZINE

50 IN THE HOT SEAT

IN THE HOT SEAT 51

INTERVIEW WITH ACADEMICIAN EMERITUS

PROF. TAN SRI DATUK DR AUGUSTINE S.H. ONG PRESIDENT OF THE MALAYSIAN OIL SCIENTISTS’ AND TECHNOLOGISTS’ ASSOCIATION (MOSTA) – ABOUT OILS AND FATS INTERNATIONAL CONGRESS (OFIC) 3. What are the highlights of OFIC? There are several interesting highlights I would like to share about OFIC. The conference covers the prospects of palm oil yield improvements. Current palm oil yield in Malaysia is less than 4 tonnes per hectare per year, while the Palm Oil Research Institute of Malaysia (PORIM) has done research that indicates that future palm oil yield can reach up to 14.5 tonnes per hectare per year. Besides this, some scientists working on the factors of increasing palm oil production also concluded that the optimum yield can reach up to around 19 tonnes per hectare per year (palm oil 18 tonnes, palm kernel oil 1 tonne). These are what studies show but yet to be achieved practically. We want the industry to realize potential developments from the research done and that is why we bring experts to the conference.

1. Briefly introduce the Oils and Fats International Congress (OFIC) event? OFIC events have been held since year 1992 and form one of the major events of the palm oil industry besides the MPOB International Palm Oil Congress and Exhibition (PIPOC). OFIC and PIPOC are organized every 2 years, where OFIC is held on every even year to avoid overlapping with PIPOC. Thus, the Malaysian palm oil industry has at least one major event every year. Besides Malaysian manufacturers, the conference attracts other industry players from overseas too. Besides palm oil, there are a total 16 other oils and fats, such as rape seed oil, soy bean oil, sunflower oil, coconut oil and so on. We do understand that palm oil is an important ingredient, and at the same time it is also manufactured in combination with other oils. 2. What are the objectives of OFIC? The main objective is to bring up- to- date the latest developments in science and technology to people who are working in the related field. Generally, the conference will cover issues such as technology advancements, research in oils and fats, oleochemicals and other lipid associated substances, to collate and disseminate information on science and technology, as well as to promote trade and commerce of oils, fats and oleochemicals.

ASIA PALM OIL MAGAZINE | April - June 2018

Tan Sri Lee Oi Hian of Kuala Lumpur Kepong Berhad briefed YM Datuk Seri Mah Siew Keong, Minister of Plantation Industries and Commodities on healthy and sustainable products produced by their Oleochemical Division

Different stages of palm fruit bunch formation on display.

Overwhelming response to the technical visit at Sime Darby Plantation at Carey Island. Delegates were thrilled at what they saw and heard.

Another interesting prospect would be the recent trending topic, Artificial Intelligent (AI) and Internet of Things (IOT) for the palm oil industry. For example, we could have a device to check palm tree health condition by collecting data of palm trees e.g. water levels, nutrient levels, diseases etc. The palm oil industry is indeed moving towards industry 4.0. Moreover, the sustainability issue is always a hot topic to be discussed. A few professors who are experts on sustainability are invited to cover this prospect each event. The palm oil tree is one of the best plants for sustainability in the world. It has less carbon emissions, also requires less land area for oil production due to its high productivity, which is about 10 times higher compared to other plants. This program is actually funded by our foundations such as the Tan Sri Dato’ Seri B. Bek-Nielsen Foundation, Raja Alias Foundation, Tun Dr. Lim Keng Yaik Foundation and so on with the motive to educate our industry players with proper and updated information. Besides the above, we also invite some overseas experts from organizations such as the American Oil Chemists’ Society (AOCS) to share about soy bean oil. Europe’s experts will share on rape seed oils, Filipino experts will share about coconut oil and palm kernel oil and so on. Not forgetting we also have exhibitions which provide education about the latest technology, palm oil processing (from upstream to milling and refining) and also palm oil products e.g. cooking oils, margarine, chocolates etc.

cooking oil. It is indeed a good opportunity for people to learn and to update themselves with useful knowledge. During OFIC 2016, visitors from a total of 17 countries were attracted to the event, which constituted 20% of the total number of visitors. We expect more participants for OFIC 2018. 5. How does OFIC benefit the industry? How does it support the industry players? We often promote the latest information and exhibit the latest technology during OFIC, where industry players are able to gain knowledge and apply them to their practice. They will learn how to become more productive and more efficient in producing quality palm oil products. OFIC also provides networking among the industry players from all over the world which enables information exchange or sharing. Besides, we will also organize a field trip to the MPOB tissue culture lab. As we know, MPOB is the pioneer in tissue culture technology. They have been working on tissue culture of oil palms. It is a very useful technique to produce high oil yield palm trees.

4. Who should attend or participate in OFIC?

6. What could be the specific support needed by OFIC so that it can continue to benefit the industry?

Everyone from the palm oil industry, even the public is encouraged to attend as well. We will display a variety of palm oil products, and also give education on proper usage of

We receive support from several groups or organizations ranging from local to overseas. They are the Malaysian Palm Oil Board (MPOB), Malaysian Palm Oil Council (MPOC),

Malaysian Palm Oil Association (MPOA), The Palm Oil Millers’ Association (MEOMA), Malaysian Oleochemical Manufacturers Group (MOMG), Council of Palm Oil Producing Countries (CPOPC), Oil Technologist Association of India (OTAI), The International Society for Fat Research (ISF), Chinese Academy of Tropical Agricultural Sciences from China, FBI Publications (M) Sdn Bhd, Maps & Globe Specialist in Map Solutions etc. They support us by sharing and distributing the news around the world about OFIC. 7. Last but not the least, would you like to share some advice to the readers? A successful company will continue to grow with continuous updating of systems and technology. Application of IOT in the palm oil industry would increase palm oil process performance and improve oil yields. For example the latest research and development on 3MCPD (3-monochloropropanediol), an organic chemical compound which is produced during palm oil processing, is suspected to be carcinogenic, which means having the potential to cause cancer. Thus, people want to reduce 3-MCPD during edible oil processing. With low 3-MCPD, the oil could earn a higher premium, where sometimes the price may rise up to 100 USD per tonne more. Technology changes over time and we have to keep ourselves always up- to- date, where OFIC is a good platform for industry players to network and to gain knowledge.

April - June 2017 | ASIA PALM OIL MAGAZINE

GREEN SOLUTIONS 53

WILD BOARS ADAPTING WELL IN OIL PALM PLANTATIONS

earded pigs or wild boars in Sabah’s Lower Kinabatangan area seem to have successfully adapted to oil palm plantations but there is still a need for them to live within forests. A scientific study published in Wildlife Research found that the bearded pigs were consistently present in both degraded forest fragments and adjacent oil palm plantations. However, the animals prefer to use forests more often for their nesting and wallowing than plantations, according to the study carried out by Sabah Wildlife Department, Danau Girang Field Centre (DGFC), in collaboration with two foreign universities.

“Our results show just how important forests are for bearded pigs. “Oil palm fruits may be exploited by bearded pigs, but pigs require many other resources that are typically found in their natural forest habitat,” said lead author Kieran Love who is from DGFC. He added the forests provide broad food resources, materials for nesting, areas for wallowing, and places for avoiding predators. The forest habitat is also dependent on pigs for accomplishing many ecosystem processes as the animals consume and disperse seeds, aerate soil and modify plant communities.

ASIA PALM OIL MAGAZINE | April - June 2018

Love said they are also an important source of food for higher predators, including vulnerable Sunda clouded leopards.

In parts of Sumatra and Borneo, the species has also been declining as agriculture activities have expanded.

The bearded pig is a protected species in Sabah but can be hunted with a licence.

In Borneo, the tradition of bearded pig hunting by the non-Muslim community in rural areas has led to the species being rare or absent in many places.

It is also considered a vulnerable species by the International Union for Conservation of Nature due to habitat loss and overhunting in many areas.

Co-author David Kurz said that the bearded pigs were present in all forest and most oil palm sites in the study and their condition was robust.

The bearded pig population in peninsular Malaysia has declined by more than 80% in the last 60 years due to deforestation and fragmentation of key resources.

“The fact that we have well-fed bearded pigs throughout a fragmented forest oil palm landscape shows that there may be several options for long-term bearded pig management, which is good news for both hunters and conservationists,” he added.

DGFC director Dr Benoit Goossens said they have just started a long-term study on the spatial ecology of the bearded pig in the Lower Kinabatangan Wildlife Sanctuary.

“We aim to fit satellite collars on several animals in order to understand their movements and their use of the oil palm forest landscape,” added Dr Goossens. Source : The Star Online

April - June 2017 | ASIA PALM OIL MAGAZINE

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PALM OIL POTENTIAL FOR alm oil has the potential to be processed into bio-energy, acting head of the Indonesian Institute of Science (LIPI) Prof Bambang Subiyanto said here on Tuesday.

“Palm oil stalk could be used as bio-energy. Moreover, with our palm oil tree that has reached 25 years old,” Bambang told the press. The palm oil stalk juice could be processed into bio-ethanol, its fiber could be processed into pellets to replace coal. “Fuel energy from palm oil trees pellets worth equally with lignite,” he added. LIPI and the Korean Invention Promotion Association (KIPA) have conducted a joint study in bio-fuel technology for South Asia.

ASIA PALM OIL MAGAZINE | April - June 2018

The two institutions held a seminar on bio-fuel and consultation on intellectual property rights in Jakarta, in a bid to evaluate the development in bio-fuel policy and the trend on intellectual property rights for bio-fuel technology.

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It was the second event to be held jointly, after the first seminar in Jeju, South Korea. KIPA Vice President Chel Hwan Kang said, the seminar is expected to raise people`s awareness on the use of bio-energy, especially bio-fuel. “In Korea, energy consumption has continued to increase. Therefore, we need clean energy sources,” Kang said. Source : astra-agro.co.id

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ASIA’S ONLY PALM OIL INDUSTRY & TECHNOLOGY NEWS MAGAZINE

A worker checks freshly harvested oil palm fruit on a truck in Pangkalan Bun, East Kalimantan, in this undated photograph. (JP/Dhoni Setiawan)

GOVT PUSHING AHEAD WITH LOCOMOTIVE BIODIESEL PLANS

he government will decide whether to resume the 20 percent biodiesel blend ( B20 ) policy for the locomotive sector by the end of June, when it expects to complete a fuel performance test in Sumatra.

The government decided in May 2017 to relax the B20 policy for locomotives operated by state-owned railway company PT KAI following sporadic cases of engine failure the company experienced since the policy was first implemented in 2016. Since January, the government has been testing the performance of locomotives manufactured by two American companies, General Electric (GE) and Electro-Motive Diesel (EMD), running on 20 percent-blended biodiesel on the TarahanTanjung Enim railway from Lampung to South Sumatra. “The testing will run for six months until June,” the Energy and Mineral Resources Ministry’s bioenergy director, Andriah Feby Misna, said recently. ASIA PALM OIL MAGAZINE | April - June 2018

Reach Out to Qualiﬁed Leaders & Key Decision Makers!

While awaiting the result of the [locomotive performance] test, we will restart the biodiesel blend program in the locomotive sector, but at a lower concentration of only 5 percent, - she said. The government aims to increase the annual consumption of palm oil-based biodiesel this year by 76.47 percent, to 5.7 million kiloliters.

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BMI Research, a unit of the Fitch Group, has projected that palm oil prices will average at around 2,500 Malaysian ringgit (US$636.1) per ton in 2018, down 7.5 percent year-on-year. “[Palm oil] production will continue to grow, keeping palm oil supply ample and prices subdued,” BMI Research stated on Feb. 27. (bbn) Source: The Jakarta Post

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April - June 2017 | ASIA PALM OIL MAGAZINE

Website: www.asia-palmoil.com

58 GREEN SOLUTIONS

B10 INCREASE EYED TO ABSORB PALM OIL SURPLUS Know what you are planting NOW Dura and tenera palms are physically identical, but a tenera palm will yield up to 30% more oil! Now you can identify dura and tenera palms with a simple DNA test as early as the pre-nursery stage. Planting tested palms will impact operating profit, drive sustainability and generate millions of ringgit for the individual plantations and the oil palm industry.

Oil companies such as PTT and Bangchak plan to offer B10 to motorists next year. PATTARAPONG CHATPATTARASILL he Department of Energy Business (DOEB) plans to increase the proportion of palm-based biodiesel to absorb the surplus in crude palm oil.

“A tentative agreement has been reached with European car assemblers, but a response has yet to be issued from Japanese and US bands.”

B10 will be available in the local automotive market by early 2019 to replace B7 biodiesel.

The additional methyl ester needed for B10 will cost 8-12 satang more per litre on a trial production scale, but it should be on a par with B7 once it goes commercial.

B7 is 7% palm-based biodiesel blended with 93% diesel, but the government is looking to increase the content of methyl ester made from crude palm oil to 10%. The DOEB is confident car assemblers and motorists will not be affected by the new B10 biodiesel regime once it goes into effect. Last Friday, the DOEB kicked off an official B10 trial with a State Railways of Thailand (SRT) train operating on the 30-kilometre Ban Laem-Mae Klong route in Samut Sakhon and Samut Songkhram. Before that, PTT Plc also conducted a trial test with a B10compatible vehicle engine.

Mr Witoon said the next step will be the B20 trial, which will be conducted by the Department of Alternative Energy Development and Efficiency (DEDE).

Plant near 100% tenera with SureSawit SHELL testing

In 2012, the DEDE conducted a trial for B20 with an old truck engine, but the tests came to a halt because the palm oil price at that time was too high. Diesel consumption volume in Thailand reached a new high of 65-66 million litres per day in 2017, when the global oil price collapsed below US$40 per barrel. PTT is the sole B10 contributor to the SRT.

Experience it now - Orion Biosains Sample Collection Kits & DNA Tests: • SureSawit SHELL - precisely determine the tenera (DxP), dura, and pisifera fruit form of a seedling, nursery palm or field planted palm.

Jiraphon Kawswat, senior executive vice-president for oil business at PTT, said the test is expected to be done over the next six months, with a report conducted every 12,000km.

• SureSawit VIR - enables early differentiation of virescens from nigrescens fruits, allowing selection for desired future fruit colour.

Energy policymakers are discussing the possibility of enforcing the use of B10 with oil traders nationwide and expect to finalise that feedback process by year-end.

The move is intended to help curb the import of crude oil, replacing it with locally made biodiesel.

• SureSawit KARMA - predicts potential abnormalities of clonal palms that could lead to the mantled fruit form.

“Once the B10 is in commercial use at petrol stations nationwide, 43% of the surplus crude palm oil will be absorbed, with daily consumption increasing from 4.62 million litres per day from B7 to 6.6 million” - Mr Witoon said.

Source: Bangkok Post

Director-general Witoon Kulcharoenwirat said the DOEB is confident that the trials will bear out the fuel’s viability.

ASIA PALM OIL MAGAZINE | April - June 2018

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60 DID YOU KNOW?

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Positive outlook: Prof Nafeeza showing her research results from rat studies looking into the effects of palm vitamin E on stress induced gastritis.

uffering from stress-induced gastritis? Palm vitamin E may be the solution.

Studies on the use of this vitamin in rats have shown that it reduces stress-induced gastritis. The rats, which were pre-treated with palm vitamin E, had gastritis induced in them following the stress of being immersed in water. When examined afterwards, they had reduced formation of stress-induced gastritis and reduced oxidative stress, said Universiti Teknologi Mara (UiTM) Professor Dr Nafeeza Mohd Ismail. “This could mean that palm vitamin E reduces oxidants, which could damage the rats’ cells,” said the molecular pharmacology and advanced therapeutics research group head. Prof Nafeeza said that stress can activate the production of various hormones, including the “fight or flight” hormones noradrenaline and adrenaline from the adrenergic system (part of the nervous system). But she and her research team at UiTM, and later, Universiti Kebangsaan Malaysia (UKM), found that palm vitamin E appears to suppress the adrenergic system, she said. “There is reduced stomach cramps, and the reduced noradrenaline and adrenaline levels lead to better perfusion (blood flow) to the stomach lining.

Because it improved the blood flow, it helps improve stress-induced gastritis, - she said.

She added that she hoped to get funding to carry out clinical trials in humans and collaborate with interested gastroenterologists. Prof Nafeeza had earlier done similar research on rats placed in plastic containers to induce stress and similar results were obtained. Palm oil has two types of vitamin E – 78% tocotrienols and 22% tocopherols – and Prof Nafeeza said its high content of tocotrienols, also known as tocotrienol-rich fraction (TRF), has better antioxidant properties.

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She has also previously conducted research on the effect of tocotrienols from the annatto plant in delaying cataracts in diabetic rabbits. These rabbits were pre-treated with annatto tocotrienols (ATT) daily for three weeks, after which a diabetic-like-state was induced by giving them streptozotocin. “We then monitored the cataract progression and found that ATT slowed down the progression compared to the control group,” she said.

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Asked if she could do such research for palm vitamin E, Prof Nafeeza said she would need funding for it. She said that the use of palm vitamin E to delay cataracts could save the Government a lot of money as Malaysia has a huge population of people with diabetes and a growing population of ageing citizens who suffer from cataracts. Source: The Star

ASIA PALM OIL MAGAZINE | April - June 2018

April - June 2017 | ASIA PALM OIL MAGAZINE

62 PLANTERS CORNER

INDONESIA VOWS

TO SOLVE PALM OIL REPLANTING PROBLEMS TO BOOST YIELDS

ndonesian government has taken measures to settle problems in palm oil replanting scheme in a bid to boost yields, a minister said here on Friday.

President Joko Widodo has launched a campaign to distribute millions of certificates to farmers in an effort to ensure them get financial support from banks.

One of the major problems is that many of growers have not received certificates of their lands which is necessary to recieve financial support from banks.

Indonesia has set a replanting plan for 4.7 million hectares of palm oil plantation in the country aimed at boosting fields, according to agriculture ministry.

Indonesian Minister of Agrarian Affairs and Spatial Planning Sofyan Djalil said that absence of the certificate has been an obstacle for the growers to borrow money from bank in a bid to finance their new planting plan.

Many of palm oil plants has been aging and have low seeds quality, it said.

“To conduct replanting program it is required to get land certificates. This is very important,” he said at chief economic ministry office. Sofyan said that a coordination meeting attended by chief economic minister Darmin Nasution to solve the problem was carried out on Friday. ASIA PALM OIL MAGAZINE | April - June 2018

Productivity of the country’s palm oil plantations is only 2 to 3 tons per hectare lower than that of 12 tons per hectare in Malaysia. oil.

Indonesia is a world’s major producer and exporter of palm

Source: XinHua

April - June 2017 | ASIA PALM OIL MAGAZINE

PLANTERS CORNER 65

64 PLANTERS CORNER

PALM OIL SOCIETY:

FUND DISTRIBUTION IS UNFAIR

he Palm Oil Farmers Society (SPKS) demanded the government revise the policy regarding palm oil plantation distribution funds. According to SPKS Advocacy Center Chairman, Marselinus Andry, the fund has been distributed unequally because it is too partial to large companies. “Currently, the fund disbursement is very unfair and disadvantages farmers,” said Andry in Jakarta, Tuesday, March 27. According to SPKS records, the fund of palm oil collected during 20152017 reached Rp27.94 trillion. But the distribution of funding the oil palm plantation development was very low and most of the funds were used to subsidize the sale of biodiesel. The amount for the development was about 1 percent or Rp25 million per hectare in 2015-2016, 5 percent in 2017, and 22 percent in 2018.

Marselinus criticized the process in distributing the fund was difficult for the farmers because it went through several levels, ranging from the district, provincial, plantation agencies, and then to the Fund Management Agency of Oil Palm Plantations (BPDP KS). He also reported that many farmers were reluctant to take replanting funds because it was managed via one-stop management. The scheme put farmers to give up 80 percent of their land to be managed by the company as an avail party. In return, the corporation will carry out the replanting for plasma farmers aged above 20 years old. The plasma farmer, Marselinus said, is also required to submit ownership certificate of land declaration as a debt assurance that will be handed over to the bank. In a one-stop scheme, the farmer must sell his palm oil production to the corporation at a set price. That

ASIA PALM OIL MAGAZINE | April - June 2018

INDONESIA MULLS MORATORIUM ON PALM OIL PLANTATION

means the farmers have to bear the debt plus its interest for 15 years and their land will likely be taken by banks if they cannot pay the debt. Marselinus stated that his party had filed a judicial review of Government Regulation No. 24/2015 on Plantation Funds Management Article 9 (2). SPKS considered the belied to be formally defective because it is contradictory to Law No. 39 of 2014 on Plantation. The lawsuit was issued by farmers&#39; associations to the Supreme Court in early February. The Ministry of Agriculture’s Plantation Director General, Bambang, denied that the government did not equally treat the farmers. “This year we are planning to do replanting for 185 thousand hectares of palm oil land,” he said. Source: mpob.gov.my

he Indonesian government plans to issue a presidential decree for stopping enlargement of palm oil plantation and increasing productivity.

government plans to double it to 8 tons per hectare every year, he said. That compares with 10 tons per hectare in Malaysia.

Presidential Chief of Staff Moeldoko said on Tuesday that coordination and discussion would be held with ministries to draft the decree on halt of opening new plantation and evaluation of the existing licenses in palm oil sector.

“The measures to raise productivity is in line with President Joko Widodo guidance in replanting palm oil plantations” said Moeldoko.

With the planned policy, the government expects one of Indonesia’s major exported commodity to boost productivity, said Moeldoko.

Indonesia produces 38.17 million ton crude palm oil in 2017 and 35.57 million ton in 2016, according to data from the country’s palm oil association.

Currently the productivity of the palm oil plantation in the country is only 2 to 4 tons per hectare per year and the

Source: www.xinhuanet.com

April - June 2017 | ASIA PALM OIL MAGAZINE

5TH AFRICA

OIL PALM & RUBBER SUMMIT DRAWS PLANTATION OWNERS, END USERS TO GHANA THIS APRIL CMT’S 5TH AFRICA OIL PALM & RUBBER SUMMIT ON 25-26 APRIL, 2018 IN ACCRA, GHANA FOCUSES ON NEW INVESTMENTS IN AFRICA’S PALM OIL AND RUBBER MARKETS, RSPO CERTIFICATIONS, SUSTAINABILITY, TRACEABILITY, RESPONSIBLE SOURCING AND ADVANCED FARMING TECHNIQUES.

Opening session by Mr. David Jackson, Director of Oils Research, LMC International brings to light rapid slowdown in palm oil planting in Southeast Asia which is expected to affect supplies and prices. He presents on – Are We Heading Towards Higher Palm Oil & Rubber Prices? Palm oil producer Olam, that recently received RSPO certification in Gabon, presents on ‘Integrating Africa with the Global Industry’. Palm oil end users sharing their perspective at the summit are – Flour Mills of Nigeria presenting on ‘Backward Integration and Maximizing Local Content’ highlighting oil palm demand and supply projections, investments in palm plantations as well as developing downstream processing industry. Unilever Ghana shares its Sustainability Strategies in Supply Chain with details of its traceability, sourcing and transparency aspects of sustainable palm oil. PZ Cussons Nigeria provides a vital perspective for

Personal Care on ‘Sustainable Palm Oil Sourcing Policies - its Implementation Challenges’. Advances in farming techniques is another key focus with ‘New Technologies - Migrating Traditional to Precision Agriculture’ particularly use of drones and Artificial Intelligence presented by WeFly Agri. In addition, ‘New Planting Materials &amp; Procedures, Improving Cultivation Techniques & Yields’ and the need for commercial oil palm varieties is shared by PalmElit. The program also includes a session by Sime Darby Plantation. Natural rubber markets in Africa is analysed by Socfin providing details of ‘Sustainability in Natural Rubber Supply Chain - Between Standards, Commitments & Assessments as well as share the expectations of a rubber grower’. The summit also features discussions on: Serendipalm - Organic Palm Oil: From Seeds to Soaps ICL Specialty Fertilizers - Sustainable Fertilization in Oil Palm Plantations by Using Controlled Release Fertilizers

ASIA PALM OIL MAGAZINE | April - June 2018

Responsible & Sustainable Development of Palm Oil & Rubber Sectors in Central Africa – Communauté Economique Des Etats De L & Afrique Centrale (CEEAC) / ECCAS

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s Malaysia and Indonesia – two of the largest palm oil producers, intensify their ventures in developing palm oil plantations in Africa, it is an opportune time to find business opportunities in these sectors. The summit provides a vital platform to learn about the latest projects as well as network with major players from the industry.

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Managing Major Diseases of the Oil Palm (Elaeis guineensis Jacq.) – Institute of Agricultural Research for Development (IRAD) Potentials of the Oil Palm Industry in Contributing in the Bank’s Feed Africa Strategy – African Development Bank Group Facilitating & De-risking Investments along the Palm Oil Value Chain in Nigeria – Nigeria Incentive Based Risk Sharing Agriculture (NIRSAL) Kobe Marine’s Biomass Fuels Generation Plans for Ghana – Kobe Marine Corporation In addition, a post conference site visit to Wilmar Refinery in Ghana is arranged on 26 April.

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68 EVENT HIGHLIGHT

EVENT HIGHLIGHT 69

SUSTAINABILITY HERE AND NOW AND IN THE FUTURE

From left: Daniel Ng, Vice President, Food & Water, Alfa Laval South East Asia; Ambassador Dag JuhlinDannfelt and YB Datuk Seri Mah Siew Keong, Minister of Plantation Industries and Commodities having a chat by Alfa Laval’s booth during POC. (Photo from MPIC Facebook.)

Alfa Laval has big goals to help palm oil industry achieve sustainability throughout the processing value chain

arlier in March, Alfa Laval showcased expertise in Palm, Lauric and Edible Oil in the Price Outlook Conference (POC) 2018 and Sweden-Malaysia Sustainable Plantation Day in Shangrila KL. While POC was a conferenceexhibition aimed at palm and lauric audience, the latter was a sustainabilityfocused palm oil customer seminar hosted by the Embassy of Sweden and Business Sweden. There was one objective in mind: focus on innovative solutions that can help Malaysian plantation industry players to increase their productivity and become more sustainable across the value chain. Swedish companies which were involved in the high-level seminar include Husqvarna, Alfa Laval, SKF, and Scania. Attendees were able to see how Swedish solutions could benefit the entire value chain from plantation to processing, automation to transportation - in terms of efficiency, digitalization and most importantly, sustainability.

Through Alfa Laval’s presentation “The New Concept of Integrated Palm Oil Complex”, attendees were offered a glimpse into the possible future of palm oil processing industry where mills and refineries are no longer separated, but instead integrated as one to provide better traceability and sustainability, full automation and high food standards, energy utilization and waste management. The “Integrated Palm Oil Complex” solution aims to tackle several issues that are present in the processing chain today. The fact that mills are often situated far from the high capacity refineries means that many mills are required to fulfil the demand of one single refinery, and it takes a long time for the crude oil to reach its destination. On the surface the problem seems quite logistical, but in actual fact it poses traceability and quality issues where there is a lack of centralized control over the oils coming from different sources.

ASIA PALM OIL MAGAZINE | April - June 2018

With the new concept however, where the extraction unit (previously known as mill) and integrated oil complex (previously known as refinery) are located in the same proximity, the integrated oil complex size will be matched to the size of the extraction unit i.e. 100T FFB/hr to 500 TPD refinery; but food standard, safety, efficiency, automation and sustainability will be substantially increased through optimization in multiple aspects – whereas traceability is not even an issue anymore. The industry norm for a fruit to be processed and refined into oil and then gets shipped off probably takes a month or more, but with this new concept, having the fruit to food and beyond within 36 hours suddenly becomes very plausible. On food safety requirement particularly the mitigation of 3-MCPDE and Glycidyl Ester (GE), “The Integrated Palm Oil Complex” is highly effective in addressing these concerns. As of now, Alfa Laval already has the latest solutions to meet the stringent requirement for 3-MCPDE

and GE mitigation with the most cost effective and proven solutions for both millers and refiners. But when these solutions are incorporated into the “Integrated Palm Oil Complex”, the course is then very much in elevating the food standards to an even higher level and not merely in mitigating the issues on hand. With environmental regulations which are becoming stricter, limitations with waste handling have also been contributing to the headaches of mill owners. The “Integrated Palm Oil Complex” cleverly recycles wastes generated from the integrated complex and turn it into energy and clean water to be channeled back into its total operations. Daniel Ng presenting to a floor of almost 100 attendees on the “The New Concept of One of the readily available Integrated Palm Oil Complex”. solutions that we can already start using today, would be the Palm Oil Mill Effluent by an industry player to present on Evaporation Technology (POMEvap) The seminar was a great success “3-MCPDE and GE Mitigation” at a where by-products are more oil, solids with turnouts of prolific profiles, and palm oil forum in August, which is and coconut-like clear water – making high interests generated on the forwardexpected to have over 600 participants. waste disposal a whole lot more thinking solutions offered by all the This is not an ordinary invitation but convenient and even profitable. Other involved Swedish companies. truly, an endorsement to the credibility than being non-biological, it eliminates of Alfa Laval’s proven solution. the need for methane capturing or Subsequently Daniel Ng, Vice ponding, one of which has high CAPEX, President, Food & Water, Alfa Laval and both of which are land-consuming. South East Asia has also been invited

April - June 2017 | ASIA PALM OIL MAGAZINE

ADVERTISER INDEX

PAGE ADVERTISERS 43 61 63 57 13 15 9 35 19 31 IBC 59 47 47 47 47 39 67 5 55 3/ IFC/ OBC

Biotec International 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) JJ-Lurgi Engineering Sdn Bhd Malaysian Palm Oil Certification Council (MPOCC) Muar Ban Lee Engineering Sdn Bhd Myande Group 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

WEBSITE

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ASIA PALM OIL MAGAZINE | April - June 2018

Quality Creates Future

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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

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- 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%.