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Borneo Post
25-05-2025
- Business
- Borneo Post
Sabah's sustainable palm oil vision: Leading way for people and planet
This regular op-ed column features WWF-Malaysia's perspectives on pressing environmental issues and events unfolding in Sabah. As an environmental conservation NGO, we also use this space to share our views on potential policy shifts that Sabah's leaders can implement to foster a greener and more sustainable future for the state. Oil palm was first introduced to Malaya as an ornamental plant before 1875. Commercial planting began in 1917 in Selangor, and large-scale expansion of palm oil in Sabah took off in the 1970s. Throughout the country, the expansion was part of the government's diversification strategy to reduce its reliance on rubber and timber. The Federal Land Development Authority (FELDA) and plantation companies were tasked to drive this expansion. Rows upon rows of oil palm trees in a Sabah plantation estate. In Sabah, companies such as Sabah Softwoods Berhad started their first oil palm planting in the early 1980s. By 1998, the development of oil palm had reached more than 800,000 hectares. The industry has since grown to be a major economic force in the state. In 2023, Sabah became the largest crude palm oil (CPO) producing state in Malaysia, producing 4.5 million tonnes of crude palm oil (CPO) out of 1.5 million hectares of plantation area. While generating economic revenue, the development of the palm oil industry has impacted Sabah's rich biodiversity. In just over 15 years, between 2002 and 2017, land clearing and conversion of forest for palm oil production have reduced the population of orangutans by 30%. Recognising this, Sabah has shifted towards sustainability by emphasising the need for development to be amply balanced by biodiversity conservation. Sustainability-certified palm oil production can be a game changer for Sabah's economy, biodiversity and people. Rather than seeing the need for development and biodiversity conservation as conflicting priorities, Sabah has charted a bold path that unites them, showing that it is possible to protect forests and wildlife while cultivating prosperity. By embracing sustainability at scale, the state is emerging as a global leader in producing palm oil that works for both people and the planet. Sabah has proven that palm oil production does not have to come at the expense of the environment. In fact, it can be a solution. The future lies not in choosing between forests or farms, but in making them work together. A statewide commitment to sustainability In 2015, the state committed to achieving 100% compliance of sustainability standards for all oil palm in Sabah. This set the pathway to transform Sabah's palm oil production and supply chain by halting deforestation, restoring ecosystems and securing livelihoods. Sabah has made a bold move by becoming the first Malaysian state to achieve full RSPO (Roundtable on Sustainable Palm Oil) certification across all oil palm operations by 2030. This commitment goes beyond compliance. It signals a long-term vision where sustainable production is the foundation for global competitiveness, environmental protection, and community resilience. To fulfil this, the Sabah Jurisdictional Approach for Sustainable Palm Oil (JASPO) initiative was set up with the support of the government and stakeholders to transform the palm oil sector. Conservation through cultivation – Applying WWF's Living Landscape Approach Inspired by these progressive policies of the state of Sabah, WWF-Malaysia supports the sustainable palm oil production through an innovative Living Landscape Approach (LLA). The LLA integrates conservation, sustainable development, and responsible land use in places with high distribution of wildlife such as the iconic orangutan and Bornean elephant. This approach focuses on three pillars: 'Protect, Produce, and Restore' – advocating for the preservation of forests, wildlife, and rivers, while also supporting the sustainable production of palm oil and the restoration of degraded lands. The Living Landscape Approach aims to balance biodiversity conservation with sustainable development, providing a platform for stakeholders to build partnership towards achieving this common goal. These are not mere theories. This approach is already taking place on the ground. Plantation companies like Sawit Kinabalu, KLK, and Sabah Softwoods have voluntarily set aside areas within their estates to reforest and establish wildlife corridors. These corridors are crucial in reconnecting fragmented forests, allowing endangered species such as orangutans, Bornean elephants, and Bornean sun bears to move safely between habitats. Supporting oil palm growers through strategic partnerships and cooperatives The transition to sustainable oil cultivation in Sabah has its own challenges. Companies embarking on certification often require initial investment in training their employees, adopt new technologies, and becoming familiar with third party auditing processes. For most independent smallholders and mid-sized palm oil growers, high certification cost hinders them from pursuing stringent RSPO certification. WWF-Malaysia works with smallholders and mid-sized growers to help them pursue RSPO certification. To address this, WWF-Malaysia has supported the formation of grower cooperatives to make RSPO certification more accessible and affordable. An alphabet soup of cooperatives has been established including Koperasi Landskap Kelapa Sawit Sabah Bhd (LKSS); Koperasi Lestari Penanam Sawit Sabah Berhad (KLASS); and Koperasi Pekebun Kecil dan Sederhana Sawit Lestari Sabah Berhad (KOSALESA). Through these cooperatives, growers share the cost of audits and training, while also benefiting from technical guidance and group support. All financial benefits from the certification will go back to the growers as an incentive for their sustainability efforts. When WWF first engaged growers in priority landscapes like the Tawau-Kunak Districts and Tabin in Lahad Datu, only 25 smallholders were willing to pursue certification. When the pioneer cooperative began earning premiums and selling RSPO Credits, interest grew among the growers. Today, three times that number are in the process of getting certified. This growing momentum, coupled with supportive policies from the state government and progressive actions by large plantation groups, is putting Sabah at the forefront of sustainable palm oil globally. How sustainable palm oil benefits Sabah The palm oil industry remains a major contributor of GDP in Sabah as well as an economic engine that creates employment opportunities for the people. Sustainability isn't just good for the environment — it's smart for business. RSPO certified producers enjoy a range of benefits such as premium market access in Europe and North America. Certified growers obtain higher prices for certified Fresh Fruit Bunches (FFB) and are able to trade RSPO Credits as an extra income stream. They too benefit from increased returns as a sustainable approach to palm oil cultivation results in improved productivity from better soil, water and pest management. Through responsible practices, growers also become stewards of the land, protecting high conservation value (HCV) areas, preserving ecosystem services, and strengthening their relationships with local communities and workers. Beyond its direct benefits to oil palm growers, support for sustainable palm oil is crucial for addressing environmental, social, and economic concerns associated with palm oil production. Sustainable palm oil embraces the People, Planet, Profit framework, also known as Triple Bottom Line (TBL) sustainability framework that expands the traditional focus of business beyond financial profits to include social and environmental performance. Under the TBL framework, sustainable palm oil incorporates social equity aspects throughout its supply chain. These are fair labour practices, wages and working conditions, employee well-being, community engagement, as well as diversity, equity and inclusion. TBL environmental sustainability commits to the goal of minimising negative environmental impacts and contributing positively to environmental health by reducing carbon footprint, employing responsible waste management, conserving water and energy, sustainable sourcing of materials, and protecting biodiversity. Lastly, the TBL framework's economic viability aspect aims at not only maximising financial performance based on revenue, expenses and profitability. It also takes into account its overall economic impact on a society as represented by job creation and economic stability, responsible tax payments, as well as ethical and fair financial practices. Consumers are the answer In environmentally conscious markets, consumers drive the demand for sustainable palm oil. Over the last 30 years, arising from consumer pressure, supermarkets and retail companies in consumption countries have required their suppliers to supply sustainability-certified palm oil products. Slowly but surely, growing consumer awareness from Asia Pacific countries including the affluent and middle class from China and India will drive producers to adopt more responsible practices, protecting the environment and supporting livelihoods. Sabah being a global leader on environmental protection, biodiversity conservation and sustainable palm oil production will stand to gain by becoming an even more globally competitive state.
The Star
07-05-2025
- Business
- The Star
Positive stance on Johor Plantations' business outlook, expansion plan
PETALING JAYA: Johor Plantations Group Bhd is well-positioned to capitalise on the current elevated crude palm oil (CPO) prices at RM4,000 to RM5,000 per tonne, supported by limited supply growth and solid export demand. Following a recent visit to the group's plantation in Kluang, Johor, MIDF Research said it came away feeling positive about Johor Plantations' business outlook and its expansion plan. From a valuation standpoint, the research house believes that United Plantations Bhd , Hap Seng Plantations Holdings Bhd, Kim Loong Resources Bhd , TSH Resources Bhd and United Malacca Bhd are the closest peers to Johor Plantations due to similarities in their business models as well as the total planted area. 'These peers and Johor Plantations' planted area are relatively the same circa 40,000 ha to 50,000 ha,' it added. According to MIDF Research, Johor Plantations has the second-highest CPO yield after United Plantations, which is the most important single indicator of performance for a plantation company. The sector five-year historical mean price-to-earnings ratio is about 15 times, and it is currently trading at 10.5 times. 'Considering all these factors, we believe a reasonable price-to-earnings ratio for Johor Plantations would fall between 10 times to 13 times,' it noted. Based on the financial year 2025 (FY25) profit forecast of RM290.1mil or earnings per share of 11.6 sen, MIDF Research estimated that the stock's fair value to range between RM1.16 and RM1.51 per share. Johor Plantations' strong financial performance in the fourth quarter (4Q24) of financial year 2024 (FY24), with a core net profit of RM92.1mil, has lifted its FY24 net profit to RM254.8mil. 'These results surpassed expectations, representing over 100% of consensus full-year forecasts, and we expect the positive momentum to continue into 1Q25 and FY25, driven by sustained high average CPO prices realised and CPO delivery,' MIDF Research noted. The group's management also expects CPO production cost to stabilise at RM2,100 to RM2,000 per tonne for FY25 to FY26. 'This is in line with our estimates, following a reduction of fertiliser costs that will be imputed (generally accounts 15% to 20% of cost of production), due to softened components fertiliser prices that have been seen in the past months. 'As a result, operating profit margins should be stabilised above 30%, over FY25 to FY27 forecasts, with the profit after tax margin ranging 24% to 27% in the same period,' noted the research house. On the group's competitive strengths, MIDF Research said Johor Plantations is a long-established Roundtable on Sustainable Palm Oil (RSPO)-certified palm oil producer committed to sustainability, with all its mills and plantations meeting RSPO standards. Operating across nearly 60,000ha in Johor, the company benefits from economies of scale, reducing costs in areas like fertilisers and machinery.
The Star
02-05-2025
- Business
- The Star
SD Guthrie delivers first tariff-free palm oil shipment under CPTPP to UK
KUALA LUMPUR: SD Guthrie Bhd delivered its first-ever tariff-free shipment of Roundtable on Sustainable Palm Oil (RSPO)-certified sustainable palm oil (CSPO) to the United Kingdom (UK) under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). In a statement today, the company announced that its SD Guthrie International Liverpool Refinery received 8,000 tonnes of fully traceable and segregated CSPO. The cargo was shipped aboard the Dolphin 19 from Kunak Port, Sabah on Feb 19. The CSPO had also undergone stringent testing to ensure low levels of mineral oil saturated hydrocarbons and mineral oil aromatic hydrocarbons, it added. "The CPTPP is a free trade agreement initially signed in 2018 by 11 Pacific Rim countries, including Malaysia. The agreement removes most tariffs while promoting economic integration and maintaining strong labour and environmental protections among its member states. "With the UK's official membership in the CPTPP taking effect on Dec 15, 2024, tariffs on crude palm oil and its derivatives imported from Malaysia into the UK have been eliminated. Previously, these tariffs ranged from two per cent to 10 per cent,' it said in a statement today. SD Guthrie group managing director Datuk Mohamad Helmy Othman Basha said the shipment highlighted not only the strength of the Malaysia-UK trade relations but also the company's strong commitment to ensure quality, traceability and security of sustainable palm oil supply to customers in the UK. For over a decade, SD Guthrie's Liverpool refinery has been the company's gateway for CSPO to enter the UK market, supplying approximately 50 per cent to 55 per cent of domestic palm oil demand. Its refined products are widely used for deep-frying in fish-and-chip shops across the country and as key ingredients in the production of many popular brands of biscuits, baked goods and British confectionery favourites. "While our supply chain in Papua New Guinea (PNG) has been and remains the main source of our products for the UK market, this latest shipment originating from our supply chain in Sabah underscores our capability to provide consistent and stable supply of CSPO to the UK, while maintaining the highest standards of quality, sustainability and food safety. "Depending on market conditions and customer requirements, we can offer customers the security of supply they need to run their businesses, from Malaysia or PNG,' he added. - Bernama
New Straits Times
02-05-2025
- Business
- New Straits Times
SD Guthrie delivers maiden tariff-free sustainable palm oil to UK under CPTPP
Previous Next KUALA LUMPUR: SD Guthrie Bhd has delivered its first tariff-free sustainable palm oil to the United Kingdom under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). SD Guthrie International Liverpool Refinery on April 4 received the 8,000 tonnes of fully traceable and segregated Roundtable on Sustainable Palm Oil (RSPO)-certified sustainable palm oil (CSPO). The cargo, shipped aboard the Dolphin 19 from Sabah's Kunak Port on Feb 19, underwent rigorous testing to ensure it met stringent standards. This includes low levels of mineral oil saturated hydrocarbons (MOSH) and mineral oil aromatic hydrocarbons (MOAH). The CPTPP, a landmark free-trade pact initially signed in 2018 by 11 Pacific Rim countries including Malaysia, eliminates most tariffs and promotes economic integration, while upholding robust labour and environmental standards. With the UK's official membership of the agreement coming into effect on Dec 15 last year, tariffs ranging from 2.0 to 10 per cent on Malaysian crude palm oil and its derivatives were lifted. SD Guthrie group managing director Datuk Mohamad Helmy Othman Basha said the shipment highlights the strength of Malaysia–UK trade relations and the company's strong commitment to ensure quality, traceability and security of sustainable palm oil supply to customers in the UK. For over a decade, SD Guthrie's Liverpool refinery has been the company's gateway for CSPO to enter the UK market, supplying 50-55 per cent of domestic palm oil demand. The refined products are widely used for deep-frying in fish-and-chip shops across the country and as key ingredients in the production of many popular brands of biscuits, baked goods and British confectionery favourites. "While our supply chain in Papua New Guinea has been and remains the main source of our products for the UK market, this latest shipment originating from our supply chain in Sabah underscores our capability to provide consistent and stable supply of CSPO to the UK, while maintaining the highest standards of quality, sustainability and food safety. "Depending on market conditions and customer requirements, we can offer customers the security of supply they need to run their businesses, from Malaysia or Papua New Guinea," Helmy added.
Globe and Mail
27-02-2025
- Business
- Globe and Mail
Sustainable Palm Oil Market to Reach USD 1.359 Billion by 2032, Growing at a 4.50% CAGR from 2024 to 2032, Driven by Rising Global Demand
"MRFR" Sustainable Palm Oil Market Research Report Information By Type (Palm Kernel Oil, Red Palm Oil, White Palm Oil, and Fractional Palm Oil), By Distribution Channel (Online and Offline), By End-use (Food, Soap and Detergents, Cosmetics, Bakery Products, Confectionery Products, Margarine, Ice Cream, and Pet Food), By Region (North America, Europe, Asia-Pacific, And Rest Of The World) –Market Forecast Till 2032 Global sustainable palm oil market is experiencing significant growth, driven by increasing consumer awareness and stringent environmental regulations. Valued at approximately USD 0.9 billion in 2023, the market is projected to reach USD 1.359 billion by 2032, with a compound annual growth rate (CAGR) of 4.50% during the forecast period. Sustainable Palm Oil Market Size was valued at USD 0.9 Billion in 2023. The sustainable palm oil industry is projected to grow from USD 0.95 Billion in 2024 to USD 1.359 Billion by 2032, exhibiting a compound annual growth rate (CAGR) of 4.50% during the forecast period (2024 - 2032). Palm oil, a versatile and widely used vegetable oil, is integral to various industries, including food and beverage, cosmetics, and biofuels. However, its production has been associated with deforestation, habitat loss, and significant greenhouse gas emissions. In response, sustainable palm oil initiatives have emerged, aiming to balance industry demands with environmental conservation. Certification programs like the Roundtable on Sustainable Palm Oil (RSPO) play a pivotal role in promoting sustainable practices within the industry. These programs set stringent criteria for environmentally responsible palm oil production, ensuring that certified producers adhere to standards that minimize deforestation and protect biodiversity. As a result, certified sustainable palm oil is gaining preference among consumers and manufacturers committed to ethical sourcing. "Free Sample Copy" - Access a complimentary copy of our report to explore its content and insights: The Asia-Pacific region, particularly Indonesia and Malaysia, dominates global palm oil production, accounting for approximately 90% of the supply. Indonesia, the world's largest producer, has implemented policies to increase the biodiesel blend to 40% palm oil-based fuel by 2025, aiming to reduce reliance on imported fossil fuels and support the palm oil industry. This policy is expected to tighten global palm oil supplies, potentially leading to higher prices. Conversely, Malaysia has decided against increasing its biodiesel blend from the current 10% to 20%, citing the high costs of necessary infrastructure development. This decision reflects a cautious approach, balancing industry growth with economic considerations. In major consumer markets like India, shifts in import patterns are evident. For the first time, India's annual palm oil imports are projected to fall behind those of soft oils such as soybean and sunflower. This trend is attributed to the rising prices of palm oil compared to alternatives, prompting refiners to opt for more economical options. Key companies in the sustainable palm oil market include Golden Agri Resources Limited Hap Seng Plantation Holdings BerhadSIPEF Group Belgium Kuala Lumpur Kepon IOI Corporation Berhad Sime Darby Plantation Sendirian Berhad New Britain Palm Oil Limited Wilmer International Limited Cargill Kulim Berhad Sustainable Palm Oil Industry Developments October 2023: Planet Palm is a new line of RSPO-certified sustainable palm oil products designed specifically for UK bakery and food makers, offered by KTC Edibles Ltd (KTC), the leading edible oil supplier in the UK. Planet Palm Oil is among the first products available; specialty products with a focus on sustainability and traceability include Planet Palm Cake Margarine, Pastry Margarine, and Shortening. By promoting sustainable practices, the launch seeks to dispel myths about palm oil. October 2022: Thailand Sustainable Palm Oil Alliance (TSPOA) was introduced by the Roundtable on Sustainable Palm Oil (RSPO) and the Thailand Environment Institute (TEI) to encourage cooperation amongst palm oil sector participants in Thailand. Through the cooperation, ethical palm oil production will be encouraged countrywide and sustainable practices will be advanced. International sustainability standards are crucial, according to RSPO CEO Joseph D'Cruz. "Proceed to Buy" - Move forward with your purchase and gain instant access to the complete report: Such shifts could influence global palm oil prices and trade dynamics, underscoring the importance of competitive pricing and sustainable practices. Environmental concerns remain central to the sustainable palm oil discourse. The expansion of palm oil plantations has historically led to deforestation and habitat loss, notably impacting biodiversity-rich regions. Efforts to mitigate these effects include enforcing deforestation-free sourcing and protecting critical ecosystems. Collaborative initiatives among governments, NGOs, and industry stakeholders are essential to promote reforestation and sustainable land-use practices. Despite these efforts, challenges persist. Critics argue that certification programs like the RSPO need to enforce stricter standards and ensure compliance to effectively curb environmental degradation. Additionally, the economic implications of transitioning to sustainable practices can be significant, particularly for smallholder farmers who may lack the resources to implement necessary changes. The future of the sustainable palm oil market hinges on balancing economic growth with environmental stewardship. As consumer awareness continues to rise, demand for sustainably sourced products is expected to grow, incentivizing producers to adopt eco-friendly practices. Technological advancements in sustainable agriculture, coupled with supportive policies and international cooperation, will be crucial in shaping a resilient and responsible palm oil industry. How much is the sustainable palm oil market? The sustainable palm oil market size was valued at USD 0.95 Billion in 2023. What is the growth rate of the sustainable palm oil market? The market is projected to grow at a CAGR of 4.50% during the forecast period, 2024-2032. Light Beer Market Research Report Information Forecast Till 2032 United States Mattress Market Research Forecast Till 2034 Home Use Air Purifiers Market Research Report Forecast Till 2032 India Frozen Foods Market Forecast Till 2034 About Market Research Future: Market Research Future (MRFR) is a global market research company that takes pride in its services, offering a complete and accurate analysis with regard to diverse markets and consumers worldwide. Market Research Future has the distinguished objective of providing optimal quality research and granular research to clients. Our market research studies by products, services, technologies, applications, end users, and market players for global, regional, and country level market segments, enable our clients to see more, know more, and do more, which help answer your most important questions. 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