Vol. 12. No. 4, Jan-Mar 2024 Image caption: 400 TPD Teck Guan Fatty Acid and Alcohol Plant China Provided by JJ-Lurgi Engineering Sdn Bhd
El Niño Expected to Have Minimal Impact on Palm Oil Production Malaysia, the Netherlands Enhance Sustainability in Oil Palm Industry CPOPC Urges Palm Oil Producing Countries Facing EUDR to Remain Calm, Stay Optimistic in 2024
IN THE HOT SEAT
REVOLUTIONIZING PALM OIL INDUSTRY WITH MyPalm Interview with AIREI Sdn Bhd
Editor's Message
H
appy New Year 2024! Cheers to a new beginning! As the new year dawns, may it bring new hopes, new aspirations, and a new zest for life. May this year be a canvas of beautiful moments, a masterpiece painted with love, laughter, and success.
2023 has seen palm oil industry players welcomed Johari Ghani’s appointment as plantation and commodities minister following cabinet reshuffle and thanked the previous minister, Fadillah Yusof. On a side note, price of crude palm oil (CPO) experienced fluctuations throughout 2023, ranging from US$800 to US$1,000 (RM4,670) per tonne, compared to the previous year’s US$1,000. Dr. Rizal Affandi Lukman, Secretary General of the Council of Palm Oil Producing Countries (CPOPC), attributed the palm oil industry’s exceptional performance to the Ukraine war, which impacted global crude oil and vegetable oil prices, contributing to inflation and affecting fertilizer costs. The upcoming performance of the oil palm industry might be influenced by various factors, including policies related to importing countries’ taxes, levies, import duties, and regulations like the European Union Delegated Regulation (EUDR). These policy measures and regulations could significantly impact the industry’s operations and outcomes in the coming year.
Susan Tricia Editor Follow us: : Asia Palm Oil Magazine : Asia Palm Oil Magazine
On behalf of the editorial team, thank you for your continuous support of Asia Palm Oil Magazine. Stay in touch with us at www.asia-palmoil. com and follow us on Facebook and LinkedIn for more updates.
PUBLISHER FBI Publications (M) Sdn. Bhd.
PUBLICATION MANAGER Vanny Lim vanny@asiafbi.com
MARKETING COMMUNICATION Nur Izyan binti Dzulkifli izyandzul@asiafbi.com
FBI Publications (M) Sdn Bhd (1168942-P) Unit 9-3, Jalan PJU 5/6, Dataran Sunway, Kota Damansara, 47810 Petaling Jaya, Selangor. | Tel: (+603) 5636 1952
DISTRIBUTED BY Central Paper Agencies Sdn Bhd (111330-T) 11, Jalan SS 13/3C, Subang Jaya Industrial Estate, 47500 Selangor Darul Ehsan. Tel: (+603) 5636 1278 / 5636 1358 Fax: (+603) 5636 1952 Email: cpa@tm.net.my Web: www.centralreader.net
ASSISTANT EDITOR
PRINTED BY
Atthira Zawana atthirazawana@asiafbi.com
MMS PRINT SHOP (M) SDN. BHD. (1246387-v) NO 43G, Jalan PBS 14/2, Taman Perindustrian Bukit Serdang, 43300 Seri Kembangan, Selangor.
CREATIVE DESIGNER Muhammad Fadzil design@asiafbi.com
ENDORSED & SUPPORTED BY
BOARD OF DIRECTORS Kenny Yong Susan Tricia
OFFICIAL MAGAZINE OF
JJ-Lurgi Engineering Sdn Bhd ASIA PALM OIL MAGAZINE | Jan-Mar 2024
DISCLAIMER The assertions and opinions expressed in articles and announcements on this magazine reflect the views of the author(s) and do not (necessarily) reflect the views of the publisher. Asia Palm Oil Magazine can in no way be held responsible for the content of such views nor can it be held liable for any direct or indirect damage that may arise from such views. The information in this magazine is regularly supplemented and/or modified. Asia Palm Oil Magazine reserves the right to make any changes with immediate effect and without providing any notice thereof
22
Analysts See CPO at RM4,000 in 2024, Name IOI Corp as Top Sector Pick
> ORGANIZATION NEWS 08 - CPOPC Urges Palm Oil Producing Countries Facing EUDR to Remain Calm, Stay Optimistic in 2024 10 - Kinergy Advancement in Bioenergy Partnership to Innovate Palm Oil Industry 12 - FGV Reflects on Excellent 2023 16 - Malaysian Palm Oil Association Welcomes New Leadership at Plantation and Commodities Ministry
30
> INDUSTRY NEWS 18 - El Niño Expected to Have Minimal Impact on Palm Oil Production 22 - Analysts See CPO at RM4,000 in 2024, Name IOI Corp as Top Sector Pick 24 - Palm Oil Sector to Gain from Johari’s Cabinet Appointment 26 - Palm Oil Industry Outlook, Challenges for 2024 30 - Mobilizing Sarawaks Youth in The Palm Oil Industry
Mobilizing Sarawaks Youth in The Palm Oil Industry
> INTERNATIONAL NEWS
> GREEN SOLUTIONS
32 - Indonesia Confident About Winning EU Lawsuit on Palm Oil Biofuel 34 - Indonesia to Fine Palm Oil Companies $411 Million for Operating In Forests
36 - DARE Palm Oil Producers Need to Further Improve Sustainability 40 - A Brighter Future for Oil Palm
ASIA PALM OIL MAGAZINE | Jan-Mar 2024
> TECHNOLOGY AND PRODUCT NEWS
36
50 - IBG Biofertilizer and MPOB Jointly Develop iM-bioGuard to Prevent Ganoderma Infection in Oil Palm Plantations.
> SPECIAL INSIGHT 52 - Malaysia, the Netherlands Enhance Sustainability in Oil Palm Industry 56 - Malaysian Oil Palm Industry to Stage Stronger Performance Next Year
> IN THE HOT SEAT DARE Palm Oil Producers Need to Further Improve Sustainability
60 - Revolutionizing Palm Oil Industry with MyPalm: Interview with AIREI Sdn Bhd
56
60
Malaysian Oil Palm Industry to Stage Stronger Performance Next Year
Revolutionizing Palm Oil Industry with MyPalm: Interview with AIREI Sdn Bhd
> PLANTERS CORNER
> EVENT HIGHLIGHT
44 - Mixed Prospects for Plantation Sector
64 - MPOB to organize R&O 2024 on 11th January
ASIA PALM OIL MAGAZINE | Jan-Mar 2024
8
CPOPC Urges Palm Oil Producing Countries Facing EUDR to Remain Calm, Stay Optimistic in 2024 The EU announced the EUDR on Dec 6, 2022, stating that the regulation aimed to prevent deforestation due to agricultural activities. Deputy Prime Minister Datuk Seri Fadillah Yusof, who is now the energy transition and public utilities minister, said previously the regulation’s implementation is based on unsound reasoning and had a weak scientific basis.
Palm oil producing countries should remain calm and optimistic next year, and not get nervous about facing the European Union Deforestation Regulation (EUDR) that will be enforced in 2025, said the Council of Palm Oil Producing Countries (CPOPC). Its secretary general Dr Rizal Affandi Lukman said the council stands ready in communicating all of the preparation under the joint task force which focuses on five work streams, namely ensuring the inclusion of smallholders in the supply chain, recognition of the national certification schemes (Malaysian Sustainable Palm Oil and Indonesian Sustainable Palm Oil), establishment of traceability tools, country benchmarking, and protection of privacy data. “We don’t have to be nervous in approaching this because under the joint task force, the CPOPC stands ready in communicating all this preparation. “So just be confident that we can pass through all the preparation smoothly next year once the EUDR is implemented,” he told the media after presenting a round-table discussion titled “How CPOPC views the Challenges and Opportunities of Palm Oil Industry in 2024” at the Royale Chulan hotel. ASIA PALM OIL MAGAZINE | Jan-Mar 2024
The former plantation and commodities minister had formed a mutual agreement with Indonesia’s Coordinating Minister for Economic Affairs Dr Airlangga Hartarto to protect the interests of the palm oil sector by strengthening efforts in dealing with the discrimination against the industry. Earlier in May, Fadillah and Airlangga together went on a joint mission to the EU to defend the palm oil industry, and following the mission, they established an ad hoc task force to find solutions to compel the EU to consider the views of producing countries, and discuss the effects of the regulations on the countries, particularly smallholders, and the guidelines on the implementation.
“Palm oil can support food security, as it can be used for food ingredients such as bakery, chocolate, etc, and also can boost energy security, as palm oil can be used as a source of biodiesel and sustainable aviation fuel,” she said. She noted that the production of palm oil is going to be on a declining trend, mainly because of the uncertainties in weather conditions, such as the El Niño and ageing plants both in Malaysia and Indonesia. “Of course, global geopolitical tensions, such as from the Ukraine-Russia conflict and also Palestine-Israel, are going to create some sentiments, which are going to impact the global economic situation and also the purchasing power of consumers, indirectly impacting food security and prices,” she said. Meanwhile, CPOPC deputy secretary general Datuk Nageeb Wahab said he acknowledges that 2024 is going to be challenging, but the council is going to focus on the joint task force addressing the issues resulting from the EUDR. “We also expect the new legislation on forced labor besides the EUDR to come out,” he said. Nageeb said the CPOPC organized the Sustainable Vegetable Oil Conference in Bali, Indonesia in November 2022, and in Mumbai, India in September 2023, in order to embrace the world’s main vegetable oil. The CPOPC plans to organize the third Sustainable Vegetable Oils Conference in the Netherlands in September next year to discuss sustainability standards within different vegetable oils, among others. “This conference can get the attention of the European media as by that time, the EUDR will be implemented within three months,” he added. CPOPC sustainability and smallholder director Citrasena Darmosarkoro said palm oil producing countries are expected to collaborate on a stronger, visible and effective response in communicating about the palm oil industry to the world.
In the context of the EUDR, she said that at this point in time, even the European Commission cannot provide information related to how to implement the EUDR’s requirements. “We are still awaiting the application of the implementing act, and as of today, we still do not have competent authority from each EU member state who are going to implement the EUDR requirements. “This competent authority will do due diligence process in every member state with regard to the implementation of the EUDR,” she said, adding that it indirectly may create an opportunity for the joint task force to put forward what they want to be incorporated in the EUDR implementing regulations. Industry experts forecast Malaysia’s crude palm oil to trade between RM4,000 and RM4,200 per tonne next year, down from RM4,900 per tonne recorded in 2022, impacted by weather developments, geopolitical risks, government policies and slower global economic growth.
It was reported that the CPOPC aims to have 93% of the world’s palm oil producing countries as members by next year, and countries such as Thailand, Papua New Guinea, Colombia, Ghana, and Nigeria are expected to be on board by then. CPOPC strategy and policy director Puah Chiew Wei said that although 2024 will be a challenging year, it will create a lot of opportunities and peace for the vegetable oil industry.
Source: theedgemalaysia.com
ASIA PALM OIL MAGAZINE | Jan-Mar 2024
10
Kinergy Advancement in Bioenergy Partnership to Innovate Palm Oil Industry Kinergy Advancement Bhd (KAB) has teamed up with Agromate Holdings Sdn Bhd, to spearhead bioenergy or renewable energy (RE) generation across palm oil mills (POM) in the country.
KAB said its unit, KAB Energy Holdings Sdn Bhd (KABEH) entered into a shareholder agreement with Agromate to establish a cooperative partnership via Genplan Advisory & Management Sdn Bhd.
The sustainable energy & engineering solutions specialist said the KAB-AGROMATE collaboration seeks to capitalize on a largely under-tapped market with huge recurring income potentials.
“We are aggressively moving in-line with global efforts to transition to sustainable energy solutions. This partnership with AGROMATE reflects our genuine interest and commitment to lead the charge in innovating the sustainable energy sector, specifically within the palm oil industry. “Our collaboration will push forward the creation of advanced bioenergy projects and sustainable energy solutions that meet top-notch environmental criteria. Moreover, bioenergy stands as a crucial element among the six energy transition levers outlined in the National Energy Transition Roadmap (NETR),” KAB executive deputy chairman cum group managing director Datuk Lai Keng Onn said in a statement.
KAB executive deputy chairman and group managing director Datuk Lai Keng Onn -LOW BOON TAT/THE STAR
ASIA PALM OIL MAGAZINE | Jan-Mar 2024
“Biogas also promises a 95% reliability rate. This waste-toenergy system transforms waste into useful resources such as steam and electricity. Biogas serves as an ideal replacement for carbon-intensive, non-renewable fossil fuels, which helps to significantly lower the amount of fossil fuels used in the production of energy from renewable sources,” he added.
Source: www.thestar.com.my
12
FGV Reflects on Excellent 2023 With 2023 having come to a close, FGV takes a moment to reflect on a decade of unwavering commitment to providing Malaysians with quality and affordable food products.
These initiatives are crucial steps toward aligning the company with the government’s vision of having all palm oil entrepreneurs in the country certified.
Over the past decade, FGV Holdings Bhd has transcended its role as a contributor to national income and employment.
In a sector where each player is dealt a unique hand, FGV stands out as the largest off-taker of smallholders’ FFB in Malaysia, with 70 per cent of its processed FFB sourced from Felda settlers and independent smallholders. On the company level, beyond plantations, FGV oversees multiple sectors compared with other market players.
With 2023 having come to a close, FGV takes a moment to reflect on a decade of unwavering commitment to providing Malaysians with quality and affordable food products. From wholesome fresh milk and farm-to-table produce to essential cooking ingredients like cooking oil, margarine and refined sugar, FGV told the Business Times that its dedication to meeting the nation’s culinary needs had never been more robust. Empowering Smallholders Throughout 2023, FGV has reaffirmed its commitment to uplifting smallholders by focusing on education and sustainable practices. The company’s dedication is evident in its efforts to educate independent smallholders and fresh fruit bunches (FFB) suppliers on the significance of Malaysian Sustainable Palm Oil and the Roundtable on Sustainable Palm Oil certifications. ASIA PALM OIL MAGAZINE | Jan-Mar 2024
Supporting Food Security Agenda FGV is actively contributing to the country’s food security agenda by ensuring the availability of high-quality, nutritious and affordable food products for all Malaysians, through its consumer goods brands such as SAJI, Adela, Seri Pelangi, Gula Prai, Ladang’57 and Bright Cow. HORECA Fragrant Rice In collaboration with the Agriculture and Food Industry Ministry, FGV continues to champion the Large-Scale Smart Padi Field Programme (Smart SBB) with a focus on the Fortified Field️ Fragrant Rice (3FR) programme. The programme is a planting system that integrates padi farming activities through smart agriculture practices, mechanization, automation and Internet of Things technologies. To date, FGV has worked with 361 contract rice farmers who are cultivating more than 690ha of fragrant rice plots in northwest Selangor and Seberang Perak. Ladang’57 Ayam Kampung The Ladang’57 Ayam Kampung was launched in August to meet local demand for fresh, free-range chicken with excellent quality and affordable pricing. In collaboration with FGV’s retail and distribution partner, Aeon BiG (M) Sdn Bhd, the Ladang’57 Ayam Kampung is available at 21 Aeon BiG hypermarkets.
Celebrating homegrown brand SAJI is synonymous with cooking oil in Malaysia and continues to see growth in the consumer segment. It achieves 177 per cent growth in Consumer Reach Points (CRP) in the last decade, surging from 8.9 million in 2012 to 24.7 million in 2021. It was recognized as the “Top outstanding brand with the most incremental shoppers in 2022” by world-leading consumer data, insights and consulting company Kantar Group in July last year. The BrandLaureate has also awarded SAJI with the “Sustainable Best Brand” award for consumer products. Exploring New Frontiers
FGV entered the local dairy scene a few months before the
FGV’s premium cooking oil and margarine brand, ADELA, expanded into the flourishing Middle East and North Africa (Mena) market in February last year via the introduction of the
COVID-19 pandemic struck.
ADELA Margarine.
Bright Cow, initially known for its fresh milk, UHT milk, flavored kefir, milk yoghurt, yoghurt drinks, and cheese products, has reached a significant milestone.
The product was unveiled at Gulfood 2023, the world’s largest food exhibition held at the Dubai World Trade Centre.
Bright Cow Acerola Yoghurt and UHT Milk
In July, the dairy brand appointed new distribution agents, resulting in an extensive expansion with its products now available at an additional 5,000 retail locations. Maintaining this momentum, the brand unveiled an addition to its product line in October — the Bright Cow Acerola Yoghurt.
FGV’s foray into the Mena market marks a step in the company’s vision of exploring new frontiers. The launch of ADELA Margarine underscores FGV’s commitment to delivering premium products and showcases its adaptability and agility in responding to global market trends and demands.
ASIA PALM OIL MAGAZINE | Jan-Mar 2024
14
Meanwhile, the World HRD Congress recognized FGV with the Malaysia Best Employer Brand 2023 award and the Top Most HR Leaders Malaysia award. FGV’s corporate zakat contributions amounting to RM35.3mil benefited underprivileged communities in urban and rural areas. In the spirit of Rahmah, FGV has been engaging with Bottom 40 communities in Kuala Lumpur with FGV Seikhlas Hati packs from April last year. Furthering commitment to sustainability At FGV, sustainability is at the front and center of its business. “We are committed to respecting human rights, protecting the environment and promoting economic growth, particularly in the communities we serve,” it said. In its continuous pursuit of ensuring sustainability as well as in addressing the withhold release order by the United States Customs and Border Protection Department, FGV successfully completed the third phase of its recruitment fees reimbursement on Sept 15 last year, which was part of the remediation process.
More than 10,000 packs have been sold for RM10, each comprising basic food items such as 2kg of cooking oil, 500g of sweetened creamer, 200g of coconut cream from Saji and a 1kg packet of sugar from Gula Prai. On Dec 15, FGV launched an upsized Sukuk Murabahah programme of RM3 billion and received an “AA” investment grade corporate rating from Malaysian Rating Corp Bhd with a stable outlook.
It disbursed RM72.2 million to 19,673 migrant workers in March, June and September. On the environmental, social and governance (ESG) front, FGV was honored at the ESG Positive Impact Awards 2023 when it bagged a Gold award in the renewable energy category. FGV’s Milestones FGV has attained a series of achievements, affirming its commitment to excellence, integrity, and sustainability across various domains.
A Sustainable Future
It recently bagged the Best Annual Report in Bahasa Malaysia (Gold) award at the NACRA Awards 2023.
Since its establishment in 2012, FGV has recognized its significant role in shaping the corporate landscape of Malaysia.
FGV’s biofuel business in Kuantan was awarded with the Malaysia Brand Leadership Awards 2023 by the World Brand Congress.
As the company looks ahead, it anticipates a promising 2024, driven by its steadfast mission of “RE-Defining” itself as a leader in championing sustainable foods and agriproducts.
This culture of excellence, which permeates throughout FGV, has born fruit when FGV was recognized as Malaysia’s Most Preferred Employers (conglomerate category) by the Graduan Brand Awards 2023.
“As one of the key food players in Malaysia, FGV aims to play a significant role in the country’s national food security agenda by bringing high-quality and nutritious food products at affordable prices to all Malaysians.
ASIA PALM OIL MAGAZINE | Jan-Mar 2024
Source: www.nst.com.my
Clean Energy for A Better Future
As a palm oil plantation and palm oil mill owner, you understand the importance of sustainable practices. That's why we are proud to offer a complete biomass energy generation solutions that are both eco-friendly and cost-effective. Our services include customizing, fabricating and servicing steam turbines, oil room equipment, kernel crushing plants, and biomass pallets. We are committed to providing clean energy for a better future, and we believe that our solutions can help you achieve your sustainability goals. By choosing our services, you can reduce your carbon footprint, improving efficiency, reducing waste and increase your profitability. Our unique selling proposition is that we are one of the largest player in the industry providing sustainable biomass energy generation solutions. To learn more about our services and how we can help you achieve your sustainability goals, please visit our website or contact us today by scanning the barcode. Together, we can create a better future for our planet and future generations. Steam Turbine
• Single / Multi Stage - Back Pressure Turbine • Multi Stage - Full Condensing / Extraction Condensing Oil Room Equipment and Parts
• Rotary Brush Strainer • Automatic Desanding Cyclone System • Circular Vibro Separator • Specialised In Replacement Parts • Decanter • Separator (High Speed) • Purifier • Bowl Disc Kernel Crushing Plant
• Palm Kernel Oil Machine • Palm Kernel Oil Filter • KCP Dust Collecting System • KCP Monitoring System • Screw Press Biomass Pellet Plant
• Biomass Palleting Plant • Biomass Fuel • Drying System • Auxiliaries Equipment
WASCO AGROTECH SDN BHD (Formerly Known As PMT Industries Sdn Bhd)
Lot 1929, Jalan Bukit Kemuning, Seksyen 32 40460 Shah Alam, Selangor Darul Ehsan, Malaysia
T +603 5525 7555 F +603 5525 7599 E watenguiry@wascoenergy.com W www.wascoenergy.com
16
Malaysian Palm Oil Association Welcomes New Leadership at Plantation and Commodities Ministry
The Malaysian Palm Oil Association congratulates Datuk Seri Johari Abdul Ghani (2nd right) and Datuk Chan Foong Hin (right) on their appointments as the new Minister and Deputy Minister of the Plantation and Commodities Ministry, respectively. — Bernama pic
The Malaysian Palm Oil Association (MPOA) congratulates Datuk Seri Johari Abdul Ghani and Datuk Chan Foong Hin on their appointments as the new Minister and Deputy Minister of the Plantation and Commodities Ministry (KPK), respectively. In a statement, the association said that closer collaboration between the ministry and industry stakeholders in the facilitation processes can enable the conduct of businesses that all stakeholders can benefit from. “Recognizing the significance of fostering enabling policies that priorities cost-productivity, market access, and sustainability within the commodity sector, MPOA stands ready to actively engage and support initiatives aligning with these key objectives.
ASIA PALM OIL MAGAZINE | Jan-Mar 2024
“Looking ahead, MPOA reiterates its commitment to continue fostering and enhancing a robust partnership with KPK,” it said. MPOA pledged its continued support, working hand in hand with the Ministry to navigate challenges, unlock opportunities, and ensure a prosperous and sustainable future for Malaysia’s palm oil industry and the nation. The association also expressed its appreciation to Datuk Sri Fadillah Yusof for his pivotal role in advancing the industry with his remarkable leadership and unwavering support during his tenure as the KPK Minister.
Source: www.malaymail.com
ELEVATE YOUR PALM OIL BUSINESS WITH MyPalm – THE KEY TO SMARTER & EFFICIENT OPERATIONS.
MyPalm is a cutting-edge AI-based software platform meticulously crafted to oversee and streamline production and maintenance operations across various sectors, including Oil Palm Nursery, Oil Palm Plantation, FFB Dealer, Palm Oil Mill, Kernel Crushing Plant and Refinery. Reduced manpower dependency
Simplified maintenance program
Data-driven decision making
Reduced machinery breakdown rates
Predictive analysis by Artificial Intelligence
Optimized production efficiency
AIREI SDN. BHD. Radius Business Park, H4-1, Block H, Jalan Radius 1/1E, 63000 Cyberjaya, Selangor, Malaysia.
SPEAK TO OUR EXPERT +6016-2087070 (Pravin) info@airei.com.my
18 INDUSTRY NEWS
El Niño Expected to Have Minimal Impact on Palm Oil Production A
lthough the El Niño weather phenomenon is expected to last until April according to weather and climate monitoring bodies, the persistent rainfall observed in Malaysia of late begs the question of how strong an impact it would have on crude palm oil (CPO) production. Earlier last year, the scorching heat that sent temperatures soaring in this region had many wondering whether El Niño was in the offing after an absence of three consecutive years. El Niño brings hot and dry weather to Malaysia and Indonesia — at times, drought in severe cases — a concern to the world’s main producers of palm oil should the agricultural commodity’s production and yield be impacted. In other parts of the world, the weather phenomenon causes wetter than usual conditions, such as along the Gulf Coast from Texas to Florida.
ASIA PALM OIL MAGAZINE | Jan-Mar 2024
Interestingly, the El Niño event this time round appears different from the last. As the World Meteorological Organization highlighted, no two such events are exactly the same. “The impact of this El Niño is different from previous events as it did not bring prolonged dryness or drought to Malaysia and northern Indonesia — northern Sumatra and northern Kalimantan — due to the late coupling of the oceanic and atmospheric indicators. That is why we are still receiving good rainfall in Malaysia, especially with the onset of the northeast monsoon,” says Ling Ah Hong, director of Ganling Sdn Bhd, which focuses on plantation research and consulting. Nevertheless, some prolonged dryness is happening in southern Indonesia, namely southern Sumatra, southern Kalimantan and Java, he adds.
This article first appeared in Capital, The Edge Malaysia Weekly on December 18, 2023 - December 24, 2023
What does this mean for CPO production and prices in 2024, taking into account the time lag of six to 12 months before fruit production is affected? “Based on our analysis of weather information to date, the impact of the current El Niño on palm oil yield and production will likely be minimal in Malaysia and mild in Indonesia compared to previous events and it will be nowhere near that of the 2015/16 super El Niño,” opines Ling. During the super El Niño cycle in 2015, temperatures soared to as high as 39.3°C in Malaysia, contributing to a 13.2% decline in the country’s total palm oil production to 17.32 million tonnes in 2016 from 19.96 million tonnes in 2015. Concurrently, palm oil stocks declined 23.2% to 21.28 million tonnes in 2016 from 27.69 million tonnes in 2015. In its Dec 5 report, CGS-CIMB Research says the El Niño phenomenon has turned out to be “less severe and shorter term than expected”. Hence, it is anticipating CPO production in 2023 and 2024 to reach 18.6 million tonnes and 19.2 million tonnes respectively. This represents a year-on-year production growth of 1% in 2023 and 3% in 2024.
“Our higher CPO production projections also factor in a recovery in the labor force as estates have been receiving foreign workers in stages since end-2022, while there have been improvements in fertilizer application,” the research house adds. CGS-CIMB Research says it would be “difficult” for CPO to trade significantly above RM4,000 per tonne for an extended period in the future given the current normalisation of plantation activities and supply chains. It forecasts that without any material supply shocks, the commodity’s price will average RM3,800 a tonne in 2023 and RM3,700 a tonne in 2024. While a worse-than-expected El Niño could lead to lower fresh fruit bunch (FFB) yields in 2024 and drive CPO prices up, the current price levels have already reached those recorded during previous severe El Niño events, says the research house. For example, during the 2015/16 El Niño, CPO prices rallied in 2016 and the first quarter of 2017, surging from RM2,198 per tonne on Dec 31, 2015, to RM3,202.50 per tonne on Dec 30, 2016, before hitting a high of RM3,344.50 per tonne on Feb 10, 2017.
In 2022, Malaysia produced 18.45 million tonnes of CPO.
ASIA PALM OIL MAGAZINE | Jan-Mar 2024
20 INDUSTRY NEWS
conjunction with support from the Brent market, will insert a floor under prices,” it says. Meanwhile, Hong Leong Investment Bank Research in a Dec 6 report notes that most planters believe the monthly FFB production is likely to have peaked in October and that the current El Niño phenomenon will only impact FFB output minimally in 2024. The research house has a CPO price assumption of RM3,850 per tonne for 2023 and RM4,000 per tonne for 2024. It was neutral on the sector.
Currently, CPO prices are hovering at RM3,600 to RM3,700 per tonne. Year to date, the CPO third-month futures contract had fallen 12% to RM3,693 per tonne last Wednesday. In its Nov 22 report, BMI Country Risk & Industry Research forecasts CPO prices to average RM3,515 per tonne in 2024, representing a 7.5% year-on-year decline from its 2023 forecast. “It remains our view that the global palm oil sector will generate a production surplus of 1.2 million tonnes in both 2022/23 and 2023/24, compared to an average surplus of the five most recent completed seasons of three million tonnes which, in
ASIA PALM OIL MAGAZINE | Jan-Mar 2024
It maintained its neutral stance in a subsequent report. For exposure to the sector, it recommends IOI Corp Bhd and Hap Seng Plantations Holdings Bhd. CGS-CIMB Research retained its “underweight” rating on the sector, with “sell” recommendations on IOI Corp and FGV Holdings Bhd and “buy” calls on Genting Plantations Bhd and Ta Ann Holdings Bhd.
Source: theedgemalaysia.com
22 INDUSTRY NEWS
Analysts See CPO at RM4,000 in 2024, Name IOI Corp as Top Sector Pick
A
The research house maintained its average CPO price estimate at RM4,000 per tonne for 2024, following price fluctuation ranging between RM3,600 and RM3,800 per tonne.
In a sector update on Wednesday, Hong Leong Investment Bank (HLIB) maintained its crude palm oil (CPO) price assumptions for 2023 at RM3,850 per MT, and RM4,000 per MT for 2024.
The research house put “buy” calls on TSH Resources Bhd (TP: RM1.41) and Wilmar (S$4.58), followed by a “hold” stance on Sime Darby Plantation Bhd (RM4.67), IOI Corp (RM4.27) and Kim Loong Resources Bhd (RM1.95), and “sell” calls on Kuala Lumpur Kepong Bhd (RM21.50), FGV Holdings Bhd (RM1.41) and United Malacca Bhd (RM4.01).
nalysts remain neutral on the plantation sector, amid palm oil stockpile data indicating a dip of 1.1% monthon-month (m-o-m) to 2.45 million metric tons (MT) due to lower production and a drop in exports, marking the first decline after six consecutive months of increases.
The research house expects stockpiles to remain flattish in December 2023, as seasonally low production will be offset by weak near-term demand sentiment arising from weak demand sentiment in China and price competition from other competing oils. “We maintain our ‘neutral’ stance on the sector, given the absence of a notable demand catalyst. For exposure, our top picks are IOI Corp Bhd (buy; target price or TP: RM4.66) and Hap Seng Plantations Holdings Bhd (buy; TP: RM2.06),” HLIB said.
“Cargo surveyors estimated that palm oil exports for the first 10 days of December 2023 decreased by 7.38% m-o-m to 369,000 tonnes (Intertek Testing Services), and 4.09% m-o-m to 387,000 tonnes (AmSpec Agri),” TA Securities said. “In terms of fresh fruit bunch (FFB) yield, the average FFB yield in Sarawak decreased the most by 9.8% m-o-m to 1.38 tonnes/ hectare, followed by Sabah (-5.5% m-o-m to 1.56 tonnes/ha) and Peninsular Malaysia (-5.2% m-o-m to 1.63 tonnes/ha),” the research house added.
Likewise, TA Securities expects the low-yielding season to persist until the first quarter of 2024 (1Q2024), before production picks up again in 2Q2024.
ASIA PALM OIL MAGAZINE | Jan-Mar 2024
Source: theedgemalaysia.com
Customer:
Palm Oil Producer with excess fuel.
Challenge:
Generate power for a factory far off the grid.
Result:
Elliott steam turbine generators produce reliable, renewable on-site electricity.
They turned to Elliott
to generate power and reduce their environmental footprint.
The customer turned to Elliott to develop a flexible energy plant for two palm oil mills using empty fruit bunches as fuel. Elliott’s steam turbine generators provide 7000 kWe of low-cost, clean, renewable electricity, enough to power the entire industrial estate. Who will you turn to?
C O M P R E S S O R S
n
T U R B I N E S
n
G L O B A L
S E R V I C E
The world turns to Elliott. www.elliott-turbo.com/Plant-Oils
24 INDUSTRY NEWS
Palm Oil Sector to Gain from Johari’s Cabinet Appointment Industry bodies are bullish on Johari Ghani’s appointment as plantation and commodities minister. Palm oil industry players have welcomed Johari Ghani’s appointment as plantation and commodities minister following Cabinet reshuffle and expect him to improve the agricultural sector’s governance and practices.
Malaysian Palm Oil Board (MPOB) director-general Ahmad Parveez Ghulam Kadir said Johari is an experienced corporate figure and as a former finance minister II, he has “national administration experience”. “Among the challenges he may face are issues such as the European Union Deforestation Regulation (EUDR), labor shortages, rising costs, low smallholder yields, and slow replanting,” he told Bernama. Ahmad Parveez said smallholder issues need to be addressed by the new minister because they operate individually with limited capacity and need government help. “With his experience in the corporate sector, Johari may be able to help us strengthen the smallholders so that we can achieve an optimal economic level for them,” he said.
Johari Ghani is expected to improve the agricultural sector’sgovernance and practices, said palm oil industry players
ASIA PALM OIL MAGAZINE | Jan-Mar 2024
He also said the palm oil industry is facing a labor shortage and insufficient local workers.
“Therefore, we hope his experience can help us in our efforts to use technology such as the mechanization and automation research consortium of oil palm (MARCOP) which focuses on the latest technology within the fourth industrial revolution (IR 4.0) framework. “MARCOP is able to attract more young people to join this industry,” he added. Ahmad Parveez also expressed hope the new minister, who is also the Titiwangsa MP and Umno vice-president, will hold dialogue sessions frequently with industry stakeholders. “We hope he can maintain this culture. By involving industry players, we can sit together in an engagement process to understand the challenges faced by the industry. “This engagement with all stakeholders will strengthen and facilitate the resolution of issues in the industry,” he said. Ahmad Parveez also thanked the previous minister, Fadillah Yusof, and welcomed Johari as the new minister.
Source: www.freemalaysiatoday.com
“We in the industry and at MPOB are always open to working with him and will provide full support for the development of the industry,” he added. Meanwhile, Malaysian Palm Oil Council chairman Carl BekNielsen said he is “very positive” about the appointment. “Johari possesses a strong background in finance and is known for his meticulousness, sharp judgment and decision-making ability. We intend to collaborate closely with him,” he said. On the challenges, Bek-Nielsen said there is a need for initiatives aimed at reversing declining national yield trend. “This is vital to ensure the long-term economic viability of our industry. “We must continue efforts to keep trade channels open and convey an important message to the world – that when it comes to quality and sustainability, Malaysian palm oil is at the top of the class and sets the gold standard,” he added.
ASIA PALM OIL MAGAZINE | Jan-Mar 2024
26 INDUSTRY NEWS
Palm Oil Industry Outlook, Challenges for 2024 T
he price of crude palm oil (CPO) experienced fluctuations throughout 2023, ranging from US$800 to US$1,000 (RM4,670) per tonne, compared to the previous year’s US$1,000. Council of Palm Oil Producing Countries (CPOPC) Secretary General Dr Rizal Affandi Lukman attributed the exceptional performance in 2022 to the war in Ukraine, impacting global crude oil and vegetable oil prices, contributing to inflation and affecting fertiliser costs. Highlighting challenges faced by Indonesia and Malaysia, Rizal Affandi pointed out that ageing palm oil plants necessitate a strategic focus on replanting to sustain productivity. Additionally, he addressed the evolving dynamics of the European Union Deforestation Regulation (EUDR), stating that Malaysia has enhanced its sustainability standards through the Malaysian Sustainable Palm Oil (MSPO) 2.0.
ASIA PALM OIL MAGAZINE | Jan-Mar 2024
Meanwhile, Indonesia is accelerating efforts, particularly among smallholders. While the European market’s influence on Indonesia’s export share declined to 10%-11% from 15.7% in the past five years, Rizal Affandi expressed optimism about maintaining demand through initiatives like the B35 biodiesel programme in Indonesia, utilising 43% of national palm oil production. He anticipated a robust market, especially in India, China and Pakistan, with increased demand expected around the Chinese New Year. “In terms of price, we expect the price to hover around US$800 to US$1,000 per tonne, unless a global situation happens,” he said during the CPOPC discussion on the challenges and opportunities in the palm oil industry in 2024 on Dec 12 in Kuala Lumpur (KL).
Rizal Affandi also emphasised the CPOPC secretariat’s commitment to ensuring a smooth supply in 2025, emphasising collaboration between the palm oil-producing countries and the European Commission to address concerns, especially for smallholders. On the Malaysian front, CPOPC deputy secretary-general Datuk Nageeb Wahab discussed the challenges in the biodiesel sector, highlighting Malaysia’s nascent stage compared to Indonesia. According to Nageeb, a 10% increase in domestic consumption equates to approximately 300,000 tonnes, a stark contrast to Indonesia, where a similar increase represents three to four million tonnes. Presently, Indonesia’s consumption ranges from 10 to 12 million tonnes, while Malaysia’s biofuel consumption is merely 300,000 tonnes. He opined that even if Malaysia were to raise domestic consumption to 30%, the impact would not be as significant as in Indonesia, where a 10% increase translates to three to four billion tonnes. Looking at the supply perspective, an oversupply of palm oil in the future appears improbable, suggesting firm prices. Nageeb said palm oil’s current position is fundamentally sound. Growers are shifting focus from expanding acreage, given the associated costs and environmental concerns. Instead, the emphasis is on enhancing existing yields, although this will take time.
Unlike a decade ago when Indonesia experienced annual production increases of four to five million tonnes, creating oversupply, the current situation suggests a more stable growth trajectory. “I personally believe, fundamentally prices should firm up because it is all about supply and demand,” said Nageeb. Looking ahead to 2024, he expressed bullish sentiments about prices despite challenges, especially related to negative perceptions of palm oil and potential labour-related regulations. He added that it is crucial to note that the EU’s perspective centres not on palm oil being inherently bad but on protecting their own oil sources — grapeseed, canola and soybean — which face heavy subsidies and struggle to compete with palm oil, necessitating the imposition of barriers.
ASIA PALM OIL MAGAZINE | Jan-Mar 2024
28 INDUSTRY NEWS
Furthermore, CPOPC director of sustainability and smallholders Dr Witjaksana Darmosarkoro highlighted a significant difference between smallholders in Indonesia and Malaysia — whereby, approximately 90% of smallholders in Malaysia have certification, whereas in Indonesia, the figure is likely less than 1%.
Witjaksana highlighted that addressing the risk is crucial in discussions with the EU regarding the requested approach.
This implies that in terms of cruise line certification, Malaysia is more prepared for implementation compared to Indonesia.
Witjaksana said a parallel extension is also sought for uniformity in EUDR implementation timelines.
Addressing the differences of certification model in Indonesia and Malaysia, Witjaksana said presently, palm oil supplied to the European market adheres to certifications like RSPO, MSPO or the International Sustainability and Carbon Certification (ISCC), aligning with EUDR parameters.
Earlier in the discussion, the council engaged with academicians to address misinformation about the palm oil industry, EUDR and smallholders, underscoring the council’s dedication to transparent communication and collaboration.
Additionally, EU smallholders have an extended preparation period, implementing EUDR by June 2025, unlike Indonesia and Malaysia’s January 2025 timeline.
However, concerns arise about the EUDR’s impact on mills, particularly its requirement for a segregated approach, necessitating separation from certified sources like MSPO or RSPO. The situation, according to Witjaksana, poses a challenge for smallholders without current certifications, who may need to access different mills, potentially distant. Contrasting this, the existing mass balance approach allows smallholders to supply without immediate certification. ASIA PALM OIL MAGAZINE | Jan-Mar 2024
Source: themalaysianreserve.com
30 INDUSTRY NEWS
Mobilizing Sarawak’s Youth in The Palm Oil Industry A
s Malaysia’s palm oil industry looks to press its global advantage, Pertubuhan Transformasi Dayak (Trada) called on the youth of Sarawak to help play a key part in extending Malaysia’s lead in sustainable palm oil. In 2022, Malaysia’s palm oil export revenue reached RM135 billion, accounting for 2.4 per cent of GDP, with exports projected to increase to 16.30 million tonnes in 2023.
Trada president Joseph Janting said: “Palm oil is a lifeline for many in Malaysia, especially in Sarawak. Our smallholders, who form a substantial portion of the industry, are not only supporting their families but also paving the way for our youth to step into a sector that promises sustainability and growth.”
Smallholders, who make up 30 to 40 per cent of cultivation and number nearly 250,000, predominantly in Johor, Sarawak, and Sabah, are crucial to the industry’s success.
He added: “Palm oil is at the forefront of Malaysia’s journey towards sustainable agriculture. Our commitment to sustainable practices places us in a unique position to lead globally, benefiting not just the current but future generations. This sustainable approach is crucial for Malaysian youth, offering them a landscape to grow and thrive.”
These smallholders provide livelihoods for many families and opportunities for youth, contributing significantly to palm oil production. In general, the agriculture sector, including palm oil, employed 1.86 million people in 2022.
Around 96 per cent of Malaysian palm oil plantations are now MSPO-certified under the Malaysia Sustainable Palm Oil scheme. This was a new nationally mandated sustainability standard enforceable by law, and the first of its kind in the world.
ASIA PALM OIL MAGAZINE | Jan-Mar 2024
Positive government action has continued in more recent years, with a plantation area cap established in 2019 through 2023, and new forestry laws enacted in 2022 to stiffen penalties for illegal logging. The initiatives employed by the Malaysian government and oil corporations appears to be bearing fruit with some 83 per cent of palm oil refining capacity now operating under a ‘No Deforestation, Peat and Exploitation (NDPE)’ commitment. Joseph also highlighted the declining rate of deforestation in Malaysia, which has been trending lower for some time, with Global Forest Watch recently reporting a sharp reduction in forest loss.
Highlighting the sector’s impact on the local economy, Trada believes that Sarawak’s youth can help unlock the potential of agriculture to move the domestic economy’s performance needle. In addition, TRADA views young people as powerful allies in ensuring the continued success and positive narrative of the palm oil industry both locally and globally. By involving youth in palm oil agriculture, Sarawak can capture more value in production, distribution, and logistics. This will also increase employment in the sector, which is crucial for Malaysia to quickly extend its lead in the industry. On track to lead global sustainability goals, Trada stresses the importance of placing a strong emphasis on the empowerment of Malaysian youth in the sector. “We are calling on the youth of Malaysia to become active participants in shaping the narrative around palm oil, as it will pay dividends, long term, from an employment perspective. “Their energy and voices are powerful in dispelling myths and advocating for the truth about our industry’s commitment to sustainability and its economic importance,” he added.
Source: www.theborneopost.com
ASIA PALM OIL MAGAZINE | Jan-Mar 2024
32 INTERNATIONAL NEWS
Indonesia Confident About Winning EU Lawsuit on Palm Oil Biofuel
W
orld’s largest palm oil producer Indonesia is confident about winning its biofuel lawsuit against the European Union (EU) while saying that the ongoing dispute will not affect the negotiations on the long-awaited trade pact with the 27-membered bloc. In 2019, Indonesia filed a World Trade Organization (WTO) lawsuit against the EU, claiming that the bloc’s Renewable Energy Directive II was discriminatory. The RED II sees the EU phasing out palm oil-based biofuel by 2030, claiming that such products might be at high risk of indirect land use changes (ILUC). The EU alleges that biofuel production might take place on cropland previously destined for food. This can lead to farmers extending
the production of agricultural land into areas with high carbon stock such as forests, potentially negating the emission savings from biofuel use. The biofuel may be exempt from the limitations if the palm oil is classified as low-risk of ILUC. Although the WTO panel has yet to issue a report on this palm oil biofuel lawsuit, Indonesia has high hopes of claiming a victory. “We have some disputes with the EU at the WTO. The DS592 is on nickel, while the DS593 is on palm oil. We are confident about winning the palm oil dispute. Just you wait,” Deputy Trade Minister Jerry Sambuaga told reporters in Jakarta.
This undated photo shows a farmer carrying fresh fruit bunches. (Antara Photo) ASIA PALM OIL MAGAZINE | Jan-Mar 2024
News agency Deutsche Welle reported that the EU imported 6.3 billion euros (approximately $6.9 billion) worth of palm oil and palm oil products in 2021, most used for biofuels. Indonesia and Malaysia represented 44.6 percent and 25.2 percent of those imports, respectively.
“The next round is sometime around February, … but such talks take time. We hope that we can finish it by this year,” Djatmiko told the press later that day.
Last year, the WTO ruled in favor of the EU in a dispute over Indonesia’s ban on unprocessed nickel export. Indonesia immediately lodged an appeal, which remains to be reviewed to this day due to a lack of a functioning appellate body. Amidst these WTO lawsuits, Indonesia has been trying to close a trade deal with the EU since 2016. “Dispute and a trade agreement are two different things,” Jerry said while adding that the lawsuits had “no impact” on the negotiations. Both sides are aiming to wrap up the overdue Indonesia-EU Comprehensive Economic Partnership Agreement (CEPA) negotiations in 2024. The 17th round of the talks is slated to take place next month, according to Djatmiko Bris Witjaksono, the ministry’s director general for international trade pacts. Source: jakartaglobe.id
ASIA PALM OIL MAGAZINE | Jan-Mar 2024
34 INTERNATIONAL NEWS
Indonesia to Fine Palm Oil Companies $411 Million for Operating In Forests
I
ndonesia said on Dec 22 that it would slap palm oil companies operating within forest areas with fines amounting to a total of 4.8 trillion rupiah (S$411 million). More than 475 billion rupiah in fines have been issued so far, an official from the Ministry of Maritime Affairs and Investment, Mr Firman Hidayat, told reporters. He did not provide further details or identify the companies fined. Indonesia said in November that it had identified some 200,000ha of oil palm plantations in areas designated as forests, which are expected to be returned to the state to be converted back into forests.
operating in areas that are supposed to be forests, aimed at fixing governance in the sector. Officials said the measures were necessary as some companies have already been tending the land for years. Companies have to submit paperwork and pay fines to obtain cultivating rights on their plantations by Nov 2, 2023, according to the rules. While 3.3 million ha of the country’s nearly 17 million ha of palm plantation has been found in forests, only owners of plantations with a combined size of 1.67 million ha have been identified.
Indonesia, the world’s biggest palm oil producer and exporter, issued rules in 2020 to sort out the legality of plantations
Indonesia said in November it had identified some 200,000ha of oil palm plantations in areas designated as forests. PHOTO: REUTERS ASIA PALM OIL MAGAZINE | Jan-Mar 2024
Source: www.straitstimes
36 GREEN SOLUTIONS
DARE: Palm Oil Producers Need to Further Improve Sustainability Growing oil palms and harvesting their fruits is a major source of income for 500,000 smallholders in Malaysia who depend solely on the commodity for their livelihoods, according to the Datametrics Research and Information Centre (DARE). It said that for smallholders, palm oil cultivation is also crucial in the battle against poverty and plays a vital role in the improvement of socio-economic conditions in rural areas. ASIA PALM OIL MAGAZINE | Jan-Mar 2024
As for the country, the government also collects substantial revenue in the form of taxes, and this includes excise duty and levies from planters, it said in a statement. Based on the forecast in the 2024 Budget, the government›s revenue from the two taxes alone is expected to hit RM1.64 billion and rise to RM1.8 billion next year.
The government also collects substantial income tax proceeds from planters, both from major corporations and smallholders. As such, DARE said having sustainable palm oil business operations that meet the global Roundtable on Sustainable Palm Oil (RSPO) standards is crucial to the nation›s economy and the livelihood of those involved directly or indirectly in the global palm oil supply chain.
Hence, palm oil must be produced sustainably, not only to ensure we continue to enjoy the by-products that vegetable oil contributes to our daily lives but also for natures and environmental protection,” it noted.
While Malaysian palm oil sustainability efforts have borne fruit for those in the industry, there is still much more than the industry as a whole can do in its efforts to be truly green vegetable oil, it said. DARE said that the impact of palm oil and its derivatives on people›s daily lives is evident because they make up 60 per cent of composite products in a typical supermarket. This includes cooking oil, chocolates, biscuits, shampoo, detergents, and margarine. While palm oil is the most widely used vegetable oil globally, it has also at the same time been associated with issues related to deforestation and threats to wildlife.
Growing oil palms and harvesting their fruits is a major source of income for 500,000 smallholders in Malaysia who depend solely on the commodity for their livelihoods, according to the Datametrics Research and Information Centre (DARE).
ASIA PALM OIL MAGAZINE | Jan-Mar 2024
38 GREEN SOLUTIONS
DARE said that palm oil producers can further improve the sustainability of their business operations by engaging in a variety of environmental, social, and governance (ESG)-related initiatives, in addition to earning certifications from the RSPO and Malaysian Sustainable Palm Oil (MSPO).
engagement, housing for employees, equitable pay, respecting human rights, workplace safety); and governance concerns. However, the exact impact on the bottom line may not be easily captured, DARE said.
This includes the goal of achieving net zero emissions, reforestation initiatives, planting more trees, and determining the level of Scope 3 emissions. DARE said that this also entails having enhanced labour rights and working conditions, as well as a diversity and inclusivity policy that takes into account factors like gender, race, culture, and religion in addition to educational background. A portion of these sustainability-related initiatives can be measured and quantified in terms of their effects on the environment (carbon emissions, water use, renewable energy, ethical sourcing, paper waste); the social cost (better employee ASIA PALM OIL MAGAZINE | Jan-Mar 2024
Source: www.nst.com.my
40 GREEN SOLUTIONS
A Brighter Future for Oil Palm Malaysia’s oil palm industry has grown into one that has a strong competitive edge, based on its progressing efforts to support sustainable palm oil production.
Malaysia is currently the second largest producer of palm oil in the world. The country currently accounts for 23% of world palm oil production and 31% of world exports.
Since 2015, Malaysia has taken a global leadership role in continuously implementing sustainable oil palm cultivation and palm oil process innovations.
Oil palm is a perennial crop, with trees producing economically viable volumes of fresh fruit bunches (FFB) throughout its entire 25-year economic life cycle.
IN 1905, a young Frenchman named Henri Fauconnier arrived in Malaya in search of opportunities for fortune.
“The oil palm is the most efficient oil-bearing crop in the world, requiring only 0.28 hectares of land to produce one tonne of oil while soybean, sunflower and rapeseed require 2.24, 1.49 and 1.37 hectares, respectively, to produce the same,” said MPOC.
Two years later, in 1907, Fauconnier planted some oil palm seeds for its oil at the Tennamaram estate in Batang Berjuntai, Selangor — making it the first commercial oil palm plantation which laid the foundation for Malaysia’s palm oil industry development. Little did Fauconnier know, Malaysia’s oil palm industry would go through a boom leading to plantations occupying 5.67 million hectares. Malaysia exported around 25 million tonnes of palm oil and palm-based products in 2022. Malaysia’s palm oil industry was valued at around RM137bil, contributing 35 billion ringgit to the nation’s total gross domestic product (GDP).
ASIA PALM OIL MAGAZINE | Jan-Mar 2024
These high-yield characteristics of oil palm can be considered a promise for profitable returns, while its superior economic competitiveness sets it apart from other oil bearing crops.
Moving towards nett-zero Switching to alternative vegetable oils would not reduce the impacts given that other oil bearing crops have much lower yields per hectare than oil palm.
Its fibre waste can be used in many things like mulching, furniture, mattress, ropes, and sticks, while shell waste can be used as solid fuels for steam boilers in palm oil mills, and the steam generated is used to run turbines for electricity production.
Research shows that oil palm is a zero-waste crop, making the industry in line with the 12th Malaysia Plan (12MP) which outlines plans of a carbon neutral nation by as early as 2050.
EFB waste can be made into a renewable biological resource called biofuel, cultivation of straw mushrooms, and animal feed, especially livestock.
Oil palm biomass can be exemplified in palm trunks, empty fruit bunches (EFB), fibre, or shells.
Malaysian Oil Palm estate’s standard practices uses EFB as organic fertiliser and mulching for their field due to the high moisture volume and rich nutrient content.
Meanwhile, its wastewater can be classified into palm oil mill effluent (POME) that is generated from the processing of FFB into crude palm oil (CPO). Palm trunks can be utilised for organic fertiliser, mulching, particleboard, fibreboard, plywood, paper production, and others, while oil palm fruits will produce oil palm fibres, palm kernel shells, and EFB after being harvested and crushed to extract the oils.
The palm kernel cake by-product that is produced after the kernel oil extraction from the mesocarp can be processed into organic fertiliser and animal feed, while the last by-product produced after the processing step in the palm oil mill is called POME. Biogas — generated from POME via methane capture facilities — can contribute to a substantial amount of energy, especially in areas with no electricity. Some of the mills are using biogas as their biological energy to run the mill operation. This is a great way to ensure zero waste in palm oil production. Furthermore, the oil palm leaf extract (OPLE) is rich in antioxidant activity, a finding which a Universiti Putra Malaysia’s research had also reported. Sustainable production practices The East Asia Forum had once mentioned that Malaysia has a competitive edge over Indonesia based on its progressing efforts to support sustainable palm oil production. This is because Malaysia took a global leadership role in continuously implementing oil palm cultivation and palm oil process innovations aimed at making palm oil production more sustainable and environmentally friendly. Malaysia is committed to the United Nations Sustainable Development Goals (UN SDGs) agenda 2030 to drive and attain higher sustainability commitment within the oil palm industry, as reflected in Malaysia’s national development blueprint, the 12MP.
ASIA PALM OIL MAGAZINE | Jan-Mar 2024
42 GREEN SOLUTIONS
In line with the UN SDGs, Malaysia introduced the Malaysian Sustainable Palm Oil (MSPO) certification scheme in 2015, requiring plantations, independent and organised smallholdings, as well as palm oil processing facilities to be certified sustainable. MSPO, which was made mandatory beginning Jan 1, 2020, addresses critical issues on deforestation; biodiversity loss and conservation of high biodiversity value areas; issues relating to climate change; planting on peatland; fire; haze; greenhouse gases (GHG); employment and work conditions; child and forced labour; communal Native customary rights land and ownership rights as well as employee health. In 2022, the MSPO standards were revised and streamlined to five principles — management commitment and responsibility; transparency; compliance with legal and other requirements; responsibility to social, health, safety and employment conditions; and environment, natural resources, biodiversity and ecosystem services.
Other critical requirements added in the MSPO 2022 are the traceability and legality of FFB as well as ethical conduct. Meanwhile, MSPO 2022 also contains an additional standard requirement to assess conformity for FFB dealers and palm oil traders against the MSPO to ensure all types of dealers under MPOB licensing, including exporters and importers that purchase and sell oil palm products will not change the chemical properties of the materials. During the International Sustainable Palm Oil Forum 2023, Deputy Prime Minister Datuk Seri Fadillah Yusof, in his keynote address “Sustainable Trade and Responsible Business Practice in a New Global Area”, said Malaysia made government-mandated sustainability certification a requirement for its oil palm industry.
According to MPOC, the MSPO 2022 contains integration of the high conservation value (HCV) approach and states that a comprehensive HCV, environmental, and social impact assessment will be conducted before new plantings or establishments occur. The cut-off date had been set as Dec 31, 2019 — meaning no conversion of natural forest, protected areas, and HCV can take place after the aforementioned date.
At time of writing, the MSPO Trace app shows that the total certified area, which includes certified planted area, infrastructure, buildings, roads and conservation, has reached 6,282,429.88 hectares. From this figure, a total of 5,339,115.13 hectares of planted area of independent smallholders, organised smallholders and plantations has been reached. A total of 581 entities including mills, refineries and processing facilities, have achieved the MSPO Supply chain certification Standard (MSPO SCCS), as shown in the MSPO Trace app.
These principles form the general requirements of a management system framework, based on the three pillars of sustainability — economic, environmental and social.
The MSPO SCCS covers management requirements and traceability of the production throughout the supply chain from the raw materials to processing and manufacturing of palm oil and palm oil-based products.
Protocol 29 of the International Labour Organisation, an indicator for labours, was also included as part of the MSPO 2022 revision, in addition to the GHG from land-used change and GHG measuring methods.
Malaysian palm oil biofuel exporters also meet the strict standards of sustainability required by European consumers including being certified by the German International Sustainability and Carbon Certification (ISCC).
ASIA PALM OIL MAGAZINE | Jan-Mar 2024
Source: www.thestar.com.my
44 PLANTERS CORNER
Mixed Prospects for Plantation Sector HLIB Research maintained its CPO price assumption, forecasting an average of RM4,000 per tonne in 2024. Analysts are maintaining a “neutral” stance on the plantation sector, citing the absence of clear catalysts and a landscape of mixed prospects. Hong Leong Investment Bank Research (HLIB Research) said the palm oil industry faced ups and downs in 2023. The research house said, although there was a brief recovery in crude palm oil (CPO) prices after hitting a low of RM3,331 per tonne in early June, the upswing was short-lived.
ASIA PALM OIL MAGAZINE | Jan-Mar 2024
“The recovery could not be sustained as high stockpiles in Malaysia, a decline in global sunflower oil prices and elevated vegetable oil reserves in major palm oil importing countries failed to lift demand for palm oil,” it noted. AmInvestment Bank (AmInvest) Research also said, at this juncture, the prospects for the plantation sector are mixed. Positive factors include resilient demand from China and healthy biodiesel consumption in Indonesia, while negative factors consist of higher output in Malaysia and Indonesia, as well as weak demand from Europe and India.
The research outfit said it would upgrade the sector to “overweight” if CPO production is lower than expected. Factors that could lead to a poor CPO production include tree stress, dry weather, diseases and a shortage of workers.
lagging impact of El Nino on palm oil output expected in 2024. HLIB Research expects the lackluster CPO price sentiment to persist in the next few months, possibly until the second quarter.
“Currently, there is no indication of tree stress. Also, the shortage of workers in Malaysia has been alleviated by a massive recruitment exercise from late-2022 to mid-2023,” AmInvest Research noted.
The projection is based on several factors, including the unattractive price discount of CPO against soybean oil, with a value of US$258 per tonne at the end of 2023 compared to three-month and six-month averages of US$367 and US$499, respectively.
According to HLIB Research, the weak sentiment sent 2023’s CPO spot prices lower by about 11%, bringing average CPO prices to RM3,832 per tonne in 2023 against an average of RM5,126 in 2022.
An unfavorable palm oil-gas oil spread that hamper palmbased biodiesel blending and elevated stock levels in key vegetable oil-importing countries, particularly China and India, are also contributing factors.
However, the brokerage highlighted that, notwithstanding the weak performance of CPO prices, the Bursa Malaysia Plantation index concluded the year slightly higher, up by 0.5% at 7,008 points.
HLIB Research, however, believes the CPO price sentiment will likely improve once El Nino’s lagging impact on palm production is felt, likely by the end of the first half of 2024 (1H24) or early 2H24.
This performance, exceeding the FBM KLCI by 1.8%, was primarily attributed to investors’ optimism regarding the ASIA PALM OIL MAGAZINE | Jan-Mar 2024
46 PLANTERS CORNER
“Depending on intensity and timing of the occurrence, weather anomalies arising from El Nino will in turn result in lower fresh fruit bunch yield through bunch failure, floral abortion and prolonged male flowering phase,” it noted. According to the research house, during the most recent two El Nino episodes, which occurred in 2009-2010 and 2015-2016, the impact on CPO yields was felt eight or nine months after the occurrence.
HLIB Research maintained its CPO price assumption, forecasting an average of RM4,000 per tonne in 2024. Similarly, AmInvest Research anticipates an average CPO price of RM4,000 per tonne in 2024, which implies a trading range between RM3,500 and RM4,500 per tonne. The research house said the improvement in CPO prices in 2024 is expected to be underpinned by strong demand from the biodiesel industry in Indonesia. AmInvest Research said Indonesia’s biodiesel consumption is expected to rise by 16.5% to 11.7 million tonnes in 2024, mainly due to the full year impact of B35 fuel. Indonesia started implementing a programme to use biodiesel with 35% blend of palm oil-based fuel, known as B35, from February 2023. “Although B35 was rolled out in February 2023, it was only implemented in August as the infrastructure was not yet ready. Indonesia’s biodiesel consumption was estimated at 10 million tonnes in 2023,” the research firm said. Both research houses have maintained their “neutral” stance on the plantation sector, while HLIB Research has named IOI Corp Bhd and Hap Seng Plantations Holdings Bhd as its top picks within the sector.
ASIA PALM OIL MAGAZINE | Jan-Mar 2024
Source: www.thestar.com.my
50 TECHNOLOGY AND PRODUCT NEWS
IBG Biofertilizer and MPOB Jointly Develop iM-bioGuard to Prevent Ganoderma Infection in Oil Palm Plantations. iM-bioGuard Biofertilizer Unveiled at PIPOC 2023: A Breakthrough in Ganoderma Prevention In a ground-breaking collaboration with the Malaysian Palm Oil Board (MPOB), IBG Manufacturing Sdn. Bhd. proudly launched its latest innovation, iM-bioGuard biofertilizer, at the prestigious Palm Oil and Agricultural Commodities Exhibition (PIPOC) 2023 held at the Kuala Lumpur Convention Centre (KLCC) from November 7th to 9th. The launch was a momentous occasion as iM-bioGuard biofertilizer marks the first bacteria liquid formulation designed for Ganoderma prevention, setting a new standard in sustainable agricultural practices. As an honored participant in PIPOC 2023 alongside MPOB, IBG Manufacturing Sdn. Bhd. showcased iM-bioGuard biofertilizer at both the MPOB Main Pavilion and the Biology and Sustainability Research Division (BSRD), providing attendees with a first-hand look at this pioneering biofertilizer. ASIA PALM OIL MAGAZINE | Jan-Mar 2024
iM-bioGuard biofertilizer is more than a preventive measure against Ganoderma; it represents a paradigm shift in biofertilizer technology. Formulated with prebiotic elements as a nutrient source, this innovative product not only supports general soil health but also acts as a shield against pathogenic fungi and bacteria, offering comprehensive protection for plants. Each 100 ml of iM-bioGuard biofertilizer delivers at least 106 cfu/g of beneficial endophytic bacteria Pseudomonas aeruginosa, Bacillus subtilis and other prebiotic elements. IBG Manufacturing Sdn. Bhd. is certified with ISO 9001 and ISO 17025 (chemical & microbiology lab certified).
“We are thrilled to present iM-bioGuard biofertilizer to the market, a product born out of our collaboration with MPOB. This marks a significant step forward in the preventive measures against Ganoderma disease,” expressed Yeat Nai Jin, Marketing Director at IBG Manufacturing Sdn. Bhd. “The soft launch at PIPOC 2023 has been met with great enthusiasm, and we extend our gratitude to everyone who visited our station, expressing their keen interest in this revolutionary product.” The positive feedback received during the soft launch underscores the potential impact of iM-bioGuard biofertilizer on the palm oil industry. With its unique formulation and preventive properties, the biofertilizer promises to enhance crop yields while promoting environmentally sustainable practices. In addition to its preventive capabilities, iM-bioGuard biofertilizer’s prebiotic elements composition contributes to the overall health of the soil, aligning with the industry’s growing commitment to sustainable and green agricultural practices. IBG Manufacturing Sdn. Bhd. looks forward to the wider release of iM-bioGuard biofertilizer, confident that it will play a pivotal role in transforming the landscape of palm oil cultivation. The collaborative effort with MPOB signifies a commitment to innovation and sustainability, paving the way for a greener and more resilient future in the palm oil industry.
IBG Manufacturing Sdn. Bhd. extends its invitation to all the interested personnel/parties to visit their factory at the address below: No. 3 Jalan TPP 3, Taman Perindustrian Putra, 47130 Puchong, Selangor Darul Ehsan. Tel. no. 03 – 80662875. Email: info@ibgv.com.my
ASIA PALM OIL MAGAZINE | Jan-Mar 2024
52 SPECIAL INSIGHT
Malaysia, the Netherlands Enhance Sustainability in Oil Palm Industry Early this month, the Prime Minister of the Netherlands Mark Rutte paid a courtesy call on the Minister of Plantation and Commodities Datuk Seri Fadillah Yusof at the Malaysian Palm Oil Board (MPOB) during his working visit here. This visit is hoped to strengthen the established good relations between Malaysia and the Netherlands. At MPOB, Rutte planted Clonal Palm Series 3 (CPS3), advanced oil palm planting material that helps boost palm oil productivity to meet the nation’s aspiration in sustainable agriculture by maximizing yield per unit land area.
ASIA PALM OIL MAGAZINE | Jan-Mar 2024
CPS3 records impressive oil-to-bunch at 37.5 per cent and oil yield of 11.32 tonnes per hectare per year. The clone, intended for high oil yield produces higher crude palm oil yield estimated at 8.5 tonnes per hectare per year compared to the national average of 3.25 tonnes per hectare per year in 2022. CPS3 is MPOB’s latest addition to the Clonal Palm Series (CPS) and was introduced to the industry in 2020. CPS3 was awarded Gold at the International, Invention, Innovation and Technology Exhibition (ITEX) 2020, and received a Malaysia Innovative Product Award (MIPA) in 2020.
Not many are aware of the significant relationship between Malaysia and the Netherlands in promoting sustainability in the country’s oil palm industry. MPOB inked memorandum of understanding (MoU) with two organizations of the Netherlands namely IDH The Sustainable Trade Initiative and Solidaridad Network Asia Ltd in February 2020. The MoU signed between MPOB and IDH The Sustainable Trade Initiative is entitled “Sustainable Climate Smart Palm Oil Production by Smallholders in Malaysia” while that between MPOB and Solidaridad Network is named “National Initiative for Sustainable and Climate Smart Oil Palm Smallholders (NISCOPS)”. The objectives of the memorandum included among others, to accelerate the aspiration of Malaysia on the production of palm oil in a sustainable manner, particularly under the NISCOPS programme by assisting smallholders in Malaysia; and to increase the adoption of sustainable certification scheme of the smallholders through enhancing sustainable practices. NISCOPS has four key performance goals which are to increase productivity, improve smallholders’ resilience and to adapt to climate change, support forests preservations, and contribute to Malaysian Sustainable Palm Oil (MSPO) Certification Scheme revision. Rutte also visited the MPOB Gallery, which showcases the history, cultivation, processing, and various uses of palm oil and its significance in Malaysia’s economy and global importance. I had shared with the Prime Minister of the Netherlands the history of the oil palm in the Southeast Asia which began in 1848 when the Dutch shipped four dura oil palm seedlings from Africa to Southeast Asia. They were meant as botanical samples for planting at the Buitenzong (now known as Bogor) Botanical Gardens, Indonesia. Over time, the Dutch refined cultivation techniques and improved processing methods, making palm oil a significant commodity in the region’s economy. Their efforts laid the foundation for the expansion of the oil palm industry in Southeast Asia, transforming it into a key global producer of palm oil.
A farmer harvests oil palm fruit at a plantation - AFP
54 SPECIAL INSIGHT The scopes of work under these MoU will contribute to the sustainable development of the Malaysian oil palm industry, particularly in ensuring the inclusiveness of the oil palm smallholders including mainstreaming of the MSPO certification scheme at landscape approach. These MoUs intensify a closer strategic partnership and cooperation between Malaysia and the Netherlands in the sustainable initiatives, particularly for the oil palm industry and mitigation of climate change. Rutte, during his two-day working visit, had said that the Netherlands would maintain its involvement in the NI-SCOPS programme in Malaysia for the next five years. The Netherlands, which has been supporting Malaysia in issues related to palm oil over the years and has also assured that the Ad Hoc Joint Task Force between the EU, Indonesia and Malaysia will discuss the implementation of the European Union’s Deforestation Regulations (EUDR) so that it would have a minimum impact on smallholders. The EUDR is a major concern to Malaysia as it will prevent our smallholders from accessing the EU market. The EU should recognize our Malaysian Sustainable Palm Oil (MSPO) Certification Scheme, which is mandatory for our entire palm oil production sector. We also hope that the EU will agree to recognize the MPSO as an EUDR audit process at the meeting. In terms of trade, Malaysia exported palm oil and palm-based products worth RM5.12 billion to the Netherlands for the period of January until October 2023.
In 2022, the Netherlands was Malaysia’s 14th largest trading partner globally and the second largest among the European Union’s (EU) member states, with total trade amounting to RM48.04 billion (US$10.93 billion); an increase of 33.4 per cent, compared to RM36.01 billion (US$8.68 billion) in 2021. The Netherlands was also the largest palm oil importer among the EU countries, with the volume amounted to 732,325 tonnes in 2022. Last year, the total value of palm oil and palm-based products exported to the Netherlands was RM10.54 billion, an increase of 22.7 per cent from RM8.59 billion in 2021. In terms of quantity, palm oil and palm-based products exported in 2022 slipped 7.8 per cent to 1.62 million tonnes from 1.76 million tonnes in 2021. The Netherlands is the EU’s largest importer of palm oil and also Malaysia’s most important palm oil export destination in the EU. A large part of the imported palm oil is processed in the Netherlands. Our palm oil is also exported to other EU member states. We anticipate the Netherlands will continue to increase its imports of palm oil from Malaysia and support our endeavors in promoting sustainable palm oil production, and in fighting negative allegations against palm oil. The writer is director-general of Malaysian Palm Oil Board, Datuk Dr Ahmad Parveez Ghulam Kadir
ASIA PALM OIL MAGAZINE | Jan-Mar 2024
Source: www.nst.com.my
56 SPECIAL INSIGHT
Malaysian Oil Palm Industry to Stage Stronger Performance Next Year Our oil palm industry is set to move into 2024 with a better prospect. We are looking at a brighter performance next year in anticipation of rising demand for vegetable oils in sync with the increasing world’s population. The anticipated stronger performance of our oil palm industry for 2024 will be attributed to several factors which include higher production, better prices of palm oil and stronger demand from key export destinations. Crude palm oil (CPO) production in 2024 is expected to continue to increase, supported by a recovery in labor supply, which is expected to provide a boost to the oil palm industry. CPO production, which was 18.12 million tonnes in 2021 has increased almost two per cent to 18.45 million tonnes in ASIA PALM OIL MAGAZINE | Jan-Mar 2024
2022. Throughout the period of January to November this year, CPO production increased by almost one per cent to 17 million tonnes compared to 16.84 million tonnes in the same period of 2022. The Government’s effort in resolving labor issues in the oil palm industry will improve the CPO production for next year. Additionally, the 2024 Budget which has allocated RM100 million for the implementation of oil palm replanting programme for the smallholders. This move is aimed at accelerating the replacement of old or unproductive palm trees using quality seedlings and encouraging the implementation of Good Agricultural Practices (GAP). This initiative is offered through a matching grant, expected to benefit 1,500 independent smallholders, involving the replanting of 5,900 hectares of oil palm and will boost their income. This
measure will increase the productivity of fresh fruit bunches (FFB) and in turn the yield of palm oil per hectare. A total of RM70 million has also been allocated in the 2024 Budget to increase the level of sustainability of our oil palm industry and to address the anti-palm oil campaign on the international stage as well to deal with issues raised by the European Union. This will improve the image of our oil palm industry and expand our export market. The government has also proposed to expand the scope of automation tax incentives to cover the plantation sector to increase productivity and reduce the dependence on foreign labor through mechanization and automation. This will make prices of machineries become cheaper and affordable which will lead to higher productivity as it will reduce dependence on human labor, especially foreign labor, and can attract local workers to join the oil palm plantation sector. In addition, MPOB is currently advocating for oil palm growers to adopt the Shell DNA testing diagnostic technology, SureSawit, in a comprehensive manner before field planting. This initiative aims to minimize contamination, boost yield production, and align with sustainability goals.
As such, we expect CPO production to be higher for this year and continue to record better numbers for 2024. We do not foresee El Nino to significantly affect CPO production for next year. Efforts to strengthen traditional and explore new market will improve our export of palm oil. We anticipate higher demand from our importing countries, especially China and India. Exports of palm oil for the first 11 months of this year stood at 13.75 million tonnes compared with 15.71 million recorded for 2022.
ASIA PALM OIL MAGAZINE | Jan-Mar 2024
58 SPECIAL INSIGHT
Exports of palm oil and other palm-based products in the first 11 months of 2023 increased by 0.36 per cent or 79,000 tonnes to 22.25 million tonnes compared to 22.43 million tonnes for the same period in 2022.
The performance of our oil palm industry for next year may be affected by several factors which include policies related to taxes of importing countries, levies, import duties, and regulations such as the European Union Delegated Regulation (EUDR).
We exported these products to our key markets namely India, China, European Union, Turkiye dan Kenya since 2021.
We will elaborate in details the performance of our oil palm industry for this year and the outlook for 2024 in our Palm Oil Economic Review and Outlook Seminar 2024 which will take place in Pullman Kuala Lumpur City Centre Hotel on Jan 11 2024.
Backed by the rising demand especially China and India, we expect exports of palm oil and other palm-based products to be better for this year compared to 24.72 million recorded for 2022. We are looking at a better average price of CPO in 2024 in anticipation of higher demand of palm oil from our major importing countries, especially China and India. The average price of CPO in November was RM3,700.50 per tonne, an increase of RM60.50 or 1.66 per cent compared to October’s average price of RM3,640 per tonne.
We welcome industry players involved in oil palm, palm oil and other oils and fats industry including research and development personnel, planters, millers, traders, manufacturers, exporters, economists, policy makers and academicians to participate in this seminar. The writer is director-general of Malaysian Palm Oil Board, Datuk Dr Ahmad Parveez Ghulam Kadir
Insufficient supply of palm oil to accommodate the increasing demand of the commodity may be another factor that could attribute to the better average price. Additionally, the implementation of B35 in Indonesia will also support demand for biodiesel which in turn may drive the price of our palm oil for 2024.
ASIA PALM OIL MAGAZINE | Jan-Mar 2024
Source: www.nst.com.my
60 IN THE HOT SEAT
REVOLUTIONIZING PALM OIL INDUSTRY WITH MyPalm Interview with AIREI Sdn Bhd SURENDRAN Founder and Chief Executive Officer Surendran is the Founder and Chief Executive Officer of AIREI Sdn. Bhd. He hails from a family associated with the palm oil industry, representing the third generation involved in both upstream and downstream aspects of the business. His forefathers were brought in by the British to work in the palm oil plantations. Over the years, both his parents served under reputable palm oil organizations. Having been born in a palm oil estate himself, Surendran inherited the plantation knowledge and furthered his studies at Universiti Tenaga Nasional (UNITEN) and graduated with a Bachelor of Engineering majoring in Mechanical Engineering and subsequently his Masters in Chemical Engineering at Universiti Putra Malaysia (UPM). His main goal was to pursue his passion in the palm oil industry, particularly the processing facilities. He currently runs a palm oil mill as well as a plantation. He is a certified Grade 1 Steam Engineer under the Department of Safety and Health (DOSH) Malaysia since 2012 and has more than 13 years of working experience in the field of palm oil milling. He is a qualified member of the Board of Engineers Malaysia (BEM), Institution of Engineers Malaysia (IEM), ASEAN Engineering Register (AER), and Institution of Mechanical Engineers UK (IMechE). Surendran had always envisioned the Malaysian Palm Oil industry to grow at par with any other industry in terms of technology adoption. His active involvement in information technology back in university days and inborn passion for the industry resulted in the inception of AIREI Sdn Bhd which focuses on Big Data Analytics, Artificial Intelligence, and Robotics.
ASIA PALM OIL MAGAZINE | Jan-Mar 2024
1.
As a dynamic multinational company based in Malaysia and India, AIREI has established itself as a trusted partner in the palm oil sector. Tell us about AIREI’s background and achievements.
AIREI was founded in 2018 with a unique vision to revolutionize the palm oil sector through digitalization and automation. Our core competencies include Big Data Analytics, Artificial Intelligence (AI), Supply Chain Traceability using secure software platforms, and the utilization of Blockchain technology. Additionally, we specialize in Customized Robotics Development. Our clientele extends to both government and private sectors, and we take pride in tailoring innovative solutions to meet the distinctive demands of the palm oil and commodity industries. What sets us apart from other IT companies is our leadership team, exclusively comprised of industry experts with diverse backgrounds in palm oil, spanning plantation and milling operations. Our journey has been marked by significant milestones, underscoring our commitment to innovation and excellence. In recognition of our relentless efforts and dedication, we are pleased to share that AIREI has recently been bestowed with the SME100 Fast Moving Companies Award 2023. This accolade holds profound significance for us, serving as a testament to the collective hard work and unwavering commitment exhibited by our team. It reinforces our position as a dynamic, forwardthinking multinational company that continues to make substantial contributions to the palm oil sector.
2. How did AIREI decide to venture into an AI cloud-based software platform for the palm oil industry? And how does MyPalm, the culmination of this venture, contribute to the industry’s transformation? AIREI’s decision to embark on the development of an AI cloud-based software platform stemmed from a deep-seated recognition of the palm oil industry’s substantial contributions to the economy. Despite its significance, the industry persisted with conventional operational methods. AIREI identified glaring inefficiencies within operation, production, and maintenance processes, recognizing a unique opportunity to address these challenges through cutting-edge technologies. The culmination of this venture is MyPalm, AIREI’s flagship solution, a comprehensive AI-based web and mobile application designed to revolutionize the palm oil industry and enhance operational efficiency. MyPalm was conceived to unravel complexities hidden from plain view, acknowledging that traditional methods were inadequate. MyPalm stands as a testament to AIREI’s commitment to the industry’s digital transformation, reflecting a strategic alignment of potential, the identification of inefficiencies, and a forward-thinking approach to data utilization. It represents innovative solutions to bridge longstanding gaps and foster sustainable growth in the palm oil industry. 3. Can you elaborate on how MyPalm addresses specific needs in the palm oil industry? MyPalm comprises multiple categories, each equipped with specific modules and features tailored to optimize operations and enhance efficiency at various stages of the palm oil industry supply chain. These categories include MyPalm Oil Palm Nursery, MyPalm Oil Palm Plantation, MyPalm Dealer, MyPalm Palm Oil Mill, MyPalm Refinery, and MyPalm Kernel Crushing Plant.
ASIA PALM OIL MAGAZINE | Jan-Mar 2024
62 IN THE HOT SEAT Each category encompasses essential modules, such as operational, maintenance, production, human resources, finance, and supply chain management. These modules collectively empower users with tools to optimize their operations comprehensively. MyPalm is also embedded with AI capabilities and acts as a potent business intelligence tool, analyzing data to provide actionable insights and predictions. This strategic integration enhances decision-making, augments operational efficiency, and contributes to the digital transformation of the palm oil sector. 4. How does MyPalm Palm Oil Mill address the dual challenge of mitigating oil losses and minimizing frequent machinery and mill breakdowns, both of which can significantly impact mill revenue and overall efficiency in the palm oil milling process? MyPalm Palm Oil Mill addresses these two challenges in the milling process through its production and maintenance module. In the Production Module, our approach is all about predictive insights. MyPalm, armed with advanced AI algorithms, analyze key parameters like FFB Quality, Sterilization, and Pressing data in real time. This provides us with the foresight to anticipate challenges and potential oil losses in mesocarp fibre during the production process. But we don’t stop at predictions. MyPalm goes a step further by offering actionable solutions based on identified factors. This means our mill operators can take immediate, informed actions to prevent the losses from happening and at the same time will be able to optimize the Oil
ASIA PALM OIL MAGAZINE | Jan-Mar 2024
Extraction Rate (OER), making the production process more efficient. To keep everyone in the loop, MyPalm sends instant notifications. Whether you’re part of the management team or working on the floor, you get real-time updates on what’s happening, facilitating swift decision-making. The Maintenance Module within MyPalm functions as a guiding force propelling palm oil mills toward operational excellence. This module optimizes maintenance efficiency through advanced features, including Corrective Maintenance for prompt reporting of breakdowns, Routine Preventive Maintenance with flexible inspection schedules, and Replacement Preventive Maintenance incorporating automatic tracking of machine running hours. MyPalm adopts a proactive strategy with the integration of predictive maintenance algorithms, allowing us to foresee potential equipment issues before they escalate into downtime or operational disruptions. Continuous monitoring of equipment health is crucial, and MyPalm ensures that preventive measures are taken to maintain optimal performance and minimize unexpected breakdowns. In addition, communication within the maintenance team is streamlined through MyPalm. It ensures that everyone has the information they need about equipment status, maintenance schedules, and required actions, enhancing coordination and response times. In essence, MyPalm is our way of making production and maintenance smarter, more efficient, and
seamlessly connected in the dynamic landscape of the palm oil industry. 5. What potential challenges do you foresee with this product? How does AIREI plan to mitigate risks or obstacles? Like any other ambitious product, we acknowledge the presence of potential challenges, and at AIREI, we believe in a proactive approach to mitigate risks and overcome obstacles. One potential challenge could be the integration of MyPalm into existing systems across various user environments. To address this, we’ve developed a meticulous implementation plan that involves close collaboration with our clients. This ensures a seamless integration process, and our dedicated support team will be readily available to assist with any issues or concerns that may arise during this transition. Another challenge may involve adapting to diverse operational environments. To mitigate this risk, we’ve designed MyPalm to be flexible and customizable, allowing it to align with the specific needs and nuances of each user. Our team at AIREI is committed to providing tailored solutions and ongoing support to ensure a smooth and successful implementation. Furthermore, potential technical glitches or unforeseen issues might occur during the initial stages. AIREI has implemented a robust quality assurance and testing process to identify and address any such issues before they impact the functionality of MyPalm. Additionally, we have a responsive technical support team in place to provide immediate assistance and resolutions. In summary, while challenges are inherent in any product, AIREI is well-prepared to navigate them. Our proactive measures, collaborative approach, flexibility in implementation, and dedicated support structure underscore our commitment to ensuring the success of the product and the satisfaction of our clients.
6. Are there any contingency plans in place? Will AIREI require additional support or expertise? At AIREI, we prioritize meticulous planning and foresight, including the development of contingency plans to ensure the success of MyPalm implementation for our clients. We acknowledge that unforeseen challenges may arise, and we are well-prepared to address them. Our contingency plans cover various scenarios that could potentially impact the product implementation timeline, deliverables, and overall product efficiency. These plans are designed to be flexible, allowing us to adapt quickly to changing circumstances. Regular risk assessments are also implemented to identify any emerging issues and adjust our plans accordingly. Regarding additional support or expertise, AIREI is committed to leveraging our internal resources effectively. We boast a skilled and experienced team well-versed in addressing a wide range of challenges. However, should the need arise for specialized expertise beyond our current capabilities, we are open to collaborating with external partners or consultants who bring the necessary skills to the table. Our primary focus is on ensuring the seamless implementation of MyPalm for our clients and we remain agile and responsive to any evolving requirements. By maintaining a proactive stance and fostering a culture of adaptability, we aim to navigate challenges effectively and deliver successful outcomes for our clients. ASIA PALM OIL MAGAZINE | Jan-Mar 2024
64 EVENT HIGHLIGHTS
MPOB TO ORGANIZE R&O 2024 ON 11TH JANUARY fighting against anti-palm oil campaigns, and the benefits of Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) to the Malaysian economy. MPOB Director General Datuk Dr Ahmad Parveez Haji Ghulam Kadir will present a paper on the performance of the oil palm industry in 2023 and the outlook for 2024. Meanwhile, oils and fats expert Dr. Julian McGill of Glenauk Economics will share his thoughts on the market prospect and price outlook of palm oil for 2024. BANGI, 15 December 2023 -- The Malaysian Palm Oil Board (MPOB) will organize the Palm Oil Economic Review and Outlook Seminar (R&O) 2024 on 11 January 2024 to disseminate information related to the performance of the Malaysian oil palm industry in 2023, market and price outlook for 2024 as well as the latest market developments in the industry. R&O, an annual event, is one of MPOB’s platforms to share information on the performance of the Malaysian oil palm industry and to forecast its performance for the current year. Themed “Meeting Global Needs with Sustainable Palm Oil”, R&O 2024, which will take place in Pullman Kuala Lumpur City Centre Hotel will focus on mechanization and automation in oil palm plantations, impact of global challenges on palm oil supply and demand as well as prospect and future outlook of palm oil.
“R&O 2024 will provide opportunities for participants to obtain latest information on the performance of the oil palm industry. Industry experts will share their thoughts on strategies, challenges, opportunities, prospects and market developments in the oil palm industry not only in Malaysia but around the world,” said Datuk Dr. Ahmad Parveez. Industry players involved in oil palm, palm oil and other oils and fats industry, including research and development personnel, planters, millers, traders, manufacturers, exporters, economists, policy makers and academicians are encouraged to participate in this seminar.
The seminar will also deliberate on the Malaysian oil palm industry’s commitment to sustainable development while fulfilling the global needs. Nine papers highlighting the performance of the oil palm industry for 2023, market prospects and outlook for 2024, as well as developments, challenges and opportunities in the oil palm sector will be presented at the seminar. Apart from that, industry experts will discuss topics which include Council of Palm Oil Producing Countries (CPOPC)’s roadmap in enhancing palm oil sustainability and ASIA PALM OIL MAGAZINE | Jan-Mar 2024
Those interested in participating in the seminar can visit the website www.mpob.gov.my. for more information.
th
n 14 itio Ed
Incorporating :
2024
10th INDONESIA INTERNATIONAL PALM OIL CONFERENCE 2024
Join the World's Largest Palm Oil Event at the Heart of the Industry! www.palmoilexpo.com
09 - 11 OCTOBER 2024 Santika Premiere Dyandra Hotel & Convention Medan - Indonesia
HIGHLIGHTS OF THE EVENT INDUSTRY NETWORKING LUNCH
+62 21 5088 2917 Endorsed and Supported By :
INTERNATIONAL CONFERENCE
+62 812 7562 8281
PLANTERS' FORUM
TECHNOLOGY SEMINARS
info@fireworksid.com Brought To You By :
ADVERTISERS INDEX
Page
Advertisers
17
Airei Sdn Bhd
www.airei.com.my
21
Alfa Laval Malaysia Sdn Bhd
www.alfalaval.my
23
Elliott Group
www.elliott-turbo.com
29
HSS Industrial Products Sdn Bhd
www.hssip.com
47
IBG Manufacturing Sdn Bhd
www.ibgv.com.my / www.ibgbiofertilizer.com.my
11
JJ-Lurgi Engineering Sdn Bhd
www.jj-lurgi.com
48-49
Muar Ban Lee Engineering Sdn Bhd
www.mbl.com
IBC
Myande Group Co. Ltd
www.myandegroup.com
35
Nantong Ant Machinery Co. Ltd
www.antcn.cn
39
PAKAR Agriculture Expo
www.pakarpertanian.my
65
PALMEX Indonesia 2024
www.palmoilexpo.com
55
PALMEX Malaysia 2024
www.asiapalmoil.com
59
PALMEX Thailand 2024
www.thaipalmoil.com
43
Rio Tinto Services INC
www.agriculture.borax.com
5
Taner Industrial Technology (M) Sdn Bhd
www.taner.com.my
15
Wasco Agrotech Sdn Bhd
www.wascoenergy.com
3/ IFC/ OBC/ Cover Bottom
YKL Engineering Sdn Bhd
www.yklgroup.com.my
Website
INTERNATIONAL SALES OFFICES
E-mail: my@asiafbi.com
E-mail: info@fireworkssg.com E-mail: info@fireworkphils.com
E-mail: info@fireworksid.com
-Refinery & Fractionation -Spent Bleaching Earth Recovery -Palm Kernel Cake Extraction -HVO Pretreatment & Biodiesel
Palm Kernel Cake Extraction
SBE from refinery (Oil content≤25%)
UCO Treatment for HVO
Methanol and Glycerine Recovery
Hazardous free waste (Oil content≤2%)
More than 1,000 turnkey plants have been supplied by Myande in 80 countries. We are serving the vegetable oil industry as a solution provider including engineering and technology, processing plant and the related equipment manufacturing. Myande Advanced Refinery Technology · Integrated Design · Nano-Cavitation · Variable Temperature Deodorization · Ice Condensing System · Dual Bleaching · Falling Film Economizer · Falling Film Final Heater
Tel :+86-514-8784 9111 M.T:+86-183 6215 5779 E-mail: info@myande.com
Fax: +86-514-8784 8883 www.myandegroup.com myande@gmail.com
You can find out more about Myande process technology on