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Japan Palm Oil Consumption Unaffected By Quake

March 31, 2011 Leave a comment

This is written by Dow Jones Newswires journalist Lim Shie-Lynn.

A leading exporter of palm oil-based products to Japan said Wednesday that the country’s consumption of the cooking oil remains steady for now, despite the devastating earthquake and tsunami on March 11, but demand could potentially increase in the longer term.

“Demand is still steady for now, although the short supply of electricity may prompt many Japanese companies to reduce production hours and disrupt supply chains,” Tsutomu Usui, chief executive of Intercontinental Specialty Fats Sdn Bhd told Dow Jones Newswires.

Looking beyond the potential near-term demand disruptions, however, palm oil may account for a larger share of Japan’s edible oil consumption due to an increasing appetite for food that is free of trans fats, Tsutomu said.

Japan’s dominant power supplier, Tokyo Electric Power Co, introduced rolling blackouts that may last until late April after it lost around 40% of its generating capacity. The March 11 disaster disabled cooling systems at its Fukushima Daiichi power plant, shutting the plants down and triggering a nuclear crisis.

ISF, 80%-owned by the Tokyo-listed Nisshin Oillio Group Ltd and 20%-owned by edible oil firm Lam Soon, is a major producer of premium specialty food fats and oils, exporting around 40,000 tons to Japan last year. The country is the sixth-largest market for Malaysian palm oil, buying close to 600,000 metric tons last year.

Japan consumes around 2.3 million-2.5 million tons of vegetable oils include soyoil, rapeseed oil and palm oil. “The future of palm oil is very bright (in Japan). It is still the cheapest oil available and the move by food manufacturers to remove trans fats will boost imports,” he said.

Seven & I Holdings Co, a major Japanese retail conglomerate, decided in December 2010 to stop selling food products containing trans fats “as much as possible and hoped to eliminate them altogether from the shelves,” Kyodo News reported, citing company sources. The group, which controls 7-Eleven convenience stores, Ito-Yokado supermarkets, Sogo and Seibu department stores, joined other major companies such as McDonald’s Holdings Co (Japan) Ltd to reduce offerings of food items containing trans fats.

The move came after Japan’s Consumer Affairs Agency (CAA) asked food manufacturers to voluntarily label the trans fat content of their product earlier this year. While CAA didn’t impose a ban on products with trans fats, Japanese food makers said trans fats labeling may be considered mandatory in the longer term.

Trans fats are created in liquid vegetable oils that have been undergone a chemical process called partial hydrogenation.

Palm oil, a key ingredient in consumer products ranging from instant noodles and cooking oils to margarine and ice cream, is an alternative to oils that have been treated to increase the shelf-life of food products, as it is naturally stable even at room temperatures. Palm oil is higher in the saturated fats is believed to contribute to various health problems than many rival vegetable oils, but trans fats have been found to pose far greater risks to consumers’ health.

Now that regulators and consumer agencies have started to publicize the risks, palm oil is gaining an advantage over rival oils that have been partially hydrogenated to improve stability.

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Sinar Mas’ Rp 9 trillion investment

March 31, 2011 1 comment

This was published in Jakarta Globe yesterday.

Indonesian palm oil giant Sinar Mas Agro Resources & Technology Tbk and its affiliated companies will invest Rp 9 trillion (US$1 billion) in the space of four to five years to develop its downstream businesses.

“This Rp 9 trillion in investment is likely to absorb around 20,000 workers, directly and indirectly,” company chairman Franky Widjaja said after an inauguration ceremony for a palm oil refinery in Marunda, West Java, on Wednesday.

Sinar Mas Agro Resources & Technology is a division of Sinar Mas Group.

The Marunda refinery is worth Rp 2.3 trillion and is part of the company’s Rp 9 trillion commitment. It has a processing capacity of 300,000 tons of crude palm oil (CPO) per year and is set to produce 168,000 tons of cooking oil and 112,000 tons of margarine. Facilities in the refinery will, later, be expanded to enable it to produce 140,000 tons of cocoa butter substitute annually.

Widjaja said similar refineries would be built in Surabaya, Tarjun in South Kalimantan and Belawan in North Sumatra. “This effort is in line with the government’s policy to boost investment in the manufacturing sector,” he said.

Coordinating Minister for the Economy Hatta Rajasa, Industry Minister MS Hidayat, Trade Minister Mari Elka Pangestu, Chief Coordinating Minister Gita Wirjawan and West Java Vice Governor Dede Yusuf attended the the inauguration ceremony.

Rising commodity prices and efforts to boost the nation’s commodity processing sector have seen more companies pouring money into palm oil products, even though the industry faces challenges from environment activists, land acquisition issues and a complex bureaucracy.

Other food companies, including Nestle and palm oil giant Wilmar, have expressed their commitments to spend more money in Indonesia, the world’s largest producer of palm oil.

Bumper harvest for Sarawak Oil Palms

March 28, 2011 Leave a comment

Sarawak Oil Palms Bhd (SOPB) is poised to see at least 10 per cent growth in its fresh fruit bunch harvest to 700,000 tonnes by the end of the year, as more young trees mature.

Headquartered in Miri, the group has planted close to 60,000ha with oil palms in Sarawak. In a recent interview in Kuala Lumpur, SOPB group financial controller Eric Kiu Kwong Seng spoke of the company’s favourable tree profile.

“Last year, about 17 per cent of our planted area was of prime fruit bearing ages. As more young trees mature, we expect very good harvest prospects,” he told Business Times.

“By the end of this year, about a fifth of our total planted area will be of matured ages and bearing more fruit bunches,” he said.

Kiu is optimistic of good crop output because for the past few years the group had been consistent in its fertiliser use. “We never stinge on fertiliser despite the 10 per cent rise in cost. For this year, we managed to lock in 60 per cent of our fertiliser needs late last year,” he added.

In 2010, SOPB’s average fresh fruit bunch yield was 20.4 tonnes/ha. About two thirds of its oil palms are planted on peat soil. Kiu attributed the oil palms’ high productivity to vigilant water management.

Also, SOPB’s aggressive plantings as early as 2007 have resulted in 45 per cent of its planted area consisting of young oil palms and primed to bear more fruit bunches. This means big earnings growth potential in the next five years. So far, SOPB has planted 80 per cent of its 72,653ha landbank.

For the next two years, SOPB is spending some RM600 million on new plantings, construction of Sabaju and Tinbarap mills and a 450,000 tonne-a-year refinery.

SOPB was set up in 1968 via a joint venture between Commonwealth Development Corp (CDC) and the Sarawak state government. In 1995, conglomerate Shin Yang Group bought CDC’s entire stake and is now the largest shareholder with 36.5 per cent while state-owned Pelita Holdings Sdn Bhd holds 28.9 per cent.

SOPB has a solid balance sheet. It had a net gearing of 50 per cent in 2003 but is now in a net cash position of RM52 million or 12 sen a share.

Although it does not have a dividend policy, the group has been paying out 3 sen a share.

Earlier this month, research house INet Research placed a “buy” call on SOPB’s shares after having noted the group’s strong balance sheet. It highlighted that SOPB’s price earnings valuation of 8.2 times for 2011 is below the 15 times in plantation sector.

INet Research reckons that SOPB’s share price can rise as high as RM4.30 based on a price-to-earnings ratio of 10 times of its profit forecast for this year.

Separately, OSK Research said since three quarters of SOPB’s oil palms are younger than 10 years old, its fresh fruit bunches output could double in five years. OSK placed a “buy” call on SOPB’s shares and maintained its valuation of the shares rising to as high as RM5.22. This forecast is based on a multiple of 12 times its forecast results.

The shares traded unchanged on Bursa Malaysia last Friday to close at RM3.46.

Japanese spirit hailed

March 28, 2011 3 comments

Companies from the oil palm industry lend a helping hand. This is written by my colleague P. Chandra Sagaran.

IPOH: The Japanese people’s graceful way of facing up to their most recent adversity has won the praises of Raja Muda of Perak Raja Dr Nazrin Shah.

Raja Nazrin said their patience and perseverance in enduring the hardship brought on by the March 11 earthquake and tsunami was admirable and inspiring. He said the world was now looking east once again but, this time, it was not at Japan’s development and technological expertise but at the heart and soul of her people.

“In the face of great catastrophe, Japan in no less an inspiration to the world. The Japanese people have shown that man can only conquer his basic survival instinct for the greater good of society.

“They have displayed the fortitude, the composure, the dignity and the generosity that have so defined their culture,” he said at the handing over of donations to the NSTP-Media Prima Disaster Fund here yesterday.

Raja Nazrin said the world had seen how the Japanese people in the affected areas did not hesitate to help others even though their own homes were destroyed and their belongings washed away.

“Able-bodied men and women carried supplies to victims and gave up their own food rations to feed families with children and elderly members. Although there were 500,000 evacuees, there was no rushing, no rioting and no clamouring for food, water and fuel.

“The calmness of those waiting in kilometre-long lines to receive good, water and fuel defied the temper and fury of the quake that shook the ground. Their warmth towards each other defied the freezing weather they had to endure.”

Raja Nazrin also conveyed the sympathy of Sultan Perak Sultan Azlan Shah and Raja Permaisuri Tuanku Bainun to Emperor Akihito and Empress Michiko, and the people of Japan.

Also present were Raja Puan Besar Perak Tuanku Zara Salim, Perak Menteri Besar Datuk Seri Dr Zambry Abd Kadir, The New Straits Times Press (M) Bhd chairman Tan Sri Mohamed Jawhar Hassan and Consul-General of Japan Tetsuro Kai, who represented the Japanese ambassador.

Raja Nazrin later handed RM687,000 donated by various parties to Jawhar on behalf of the fund.

The donors included the Perak government (RM100,000), Sultan Azlan Foundation (RM100,000), Sunway City Bhd (RM100,000) and Kuala Lumpur Kepong Bhd (RM100,000), while Umno Perak contributed RM50,000, Perak Turf Club (RM50,000) and a personal donation of RM50,000 from TSH Resources Bhd chairman Datuk Kelvin Tan Aik Pen.

Other donors comprised companies, non-governmental organisations, political parties, government agencies and Ipoh International School.

Sarawak open to independent inspection

March 27, 2011 Leave a comment
This was published in SARAWAK REPORTS, a week ago.

Kuching, March 22, 2011The Chief Minister of Sarawak has announced plans to invite independent and international inspection teams to visit Sarawak in order to verify and document the fact that more than 70% of the State’s rain forests remain intact.

In a clear response to British and other international environmental critics who have alleged in recent weeks that logging in Sarawak has led to massive deforestation of the rain forests, Abdul Taib Mahmud said that state officials would provide full cooperation and assistance to inspectors from any certified international industry or environmental organization that wished “to make a serious study.”

“I know that there are exaggerated claims that 90% of Sarawak’s forests have been destroyed by logging,” the chief minister said in an interview here in Kuching, the capital of the state of Sarawak. “These are probably claims by people who are well meaning and care for the issue of deforestation just like I do. But the fact is more than 70% of our forest are still intact.”

The Chief Minister noted that in addition to the 70% of primary rain forest which remains intact in Sarawak, “another 14% of our secondary jungle has been replanted and is undergoing plans for replanting. This is the simple fact and if people want to verify it, then they are welcome to come to Sarawak.”

In recent weeks, the sister-in-law of former British Prime Minister Gordon Brown has teamed up with opposition critics in Malaysia to make a series of harsh accusations against Sarawak and against the Chief Minister himself.

At the heart of this campaign in the British online and print media, launched by Clare Rewcastle Brown, has been the repeated claim, based on reports by an environmental NGO, that logging in Sarawak will have wiped out 90% of all rain forests by 2020. Gordon Brown himself endorsed these claims in a recent article in The Independent.

The Chief Minister’s interview with www.sarawakreports.org marks the first time he has spoken out on the allegations being made by Gordon Brown’s sister-in-law, who together with the former British prime minister, was herself at the centre of a British scandal over the abuse of personal expense claims in 2009.

The Chief Minister, in this interview, chose to focus on the issue of sustainable development in Sarawak and to answering the claims of deforestation being made in London and elsewhere.

“People can make many claims, but my government has been very deeply committed to sustainable management of our forest,” he explained.

The Chief Minister also spoke out against illegal logging.

“The truth is that we in Sarawak are committed to practicing sustainable management of our forests. In our traditional forest we practice what is called ‘fill-in planting’…. where there is a bald area, where we see this we plant trees.”

“On top of that we want to make sure that the timber industry will not be touching the traditional trees by illegal logging,” the Chief Minister added. “So we have converted some areas to be planted with quick growing species and the timber industries which are still expanding must also add to the greenness of our forest. I would expect that one million hectares can be planted within the next ten years.”

In announcing plans to invite independent inspection by qualified experts, the Chief Minister said his government and forestry officials would provide full cooperation. At the end of the day, he explained during the half hour interview, he was interested in seeing the truth documented to avoid misunderstanding and distortions.

“I have the greatest respect for the people of Britain or anywhere else in the world who care about the issue of deforestation, as I myself do,” he noted. “And because of that I’m ready and willing to open up the country for independent and international inspection. They will see that we still have much more rain forest than people give us credit for, to be preserved for the next generations.”

The Chief Minister also noted that there had been allegations about the extent of poverty in Sarawak, and it was time to set the record straight here too.

“When I took over in 1981, the rate of poverty was close to 40%,” he recalled. “We have worked hard on this top priority over the years and got some results which encourage me by 1985 it went down to 32%. And now the rate of poverty is 5.3%.”

When asked his opinion on why a few critics in London, cheered on by opposition politicians in Malaysia, have been gunning for Sarawak on the logging issue, and whether this might be related to the fact that the State Assembly is being dissolved and elections are being called here, the Chief Minister declined to speculate on the motivations, and repeated his announcement of Sarawak being open to international inspectors.

“The truth,” he said, “is that we have nothing to hide.”

Interview with Chief Minister of Sarawak

March 27, 2011 Leave a comment

Clean up your own mess first

March 27, 2011 1 comment

This is written by celebrated journalist and activist Shamsul Akmar.

While this is his personal opinion, many in the oil palm and tropical timber industry share the same view. This is important to Malaysia’s economy especially when the government is currently negotiating free trade agreements with Europe and the US.

IN September 2005, Bruce Cleghorn, then British High Commissioner and a few other Western diplomats committed an undiplomatic act, walking out of a conference hall in protest against what Tun Dr Mahathir Mohamad had said in his speech.

Dr Mahathir’s remarks that Cleghorn and his cohorts took offence to, leading them to behave like rednecks, were in essence saying that the military action on Iraq by the United States-British led coalition of the willing was that of terrorists.

In short, Dr Mahathir, known for calling a spade a spade, stated the obvious — the US-British invasion of Iraq was an act of state terrorism.

This column is not planning to discuss whether Dr Mahathir’s remarks were justified or to further condemn Cleghorn’s uncouth behaviour. It is to discuss the uncouth, condescending and arrogant behaviour of some Western leaders and self-appointed crusaders when dealing with the East. Of course, the East is not bereft of such individuals but their behaviour stems from bad and deprived upbringing.

The same cannot be said of the Western leaders and crusaders given the fact that they hold high and powerful positions, meaning they would have been well brought up. That being the case, it can only be concluded that their uncouth nature when dealing with the people from the East stems from their sense of superiority, topped with a condescending attitude towards a people that at one point in history was colonised and considered less human.

Hence, the presence of the likes of Cleghorn, former US ambassador to Malaysia John Malott, former US vice-president Al Gore and Clare Rewcastle Brown, who is the sister-in-law of former British prime minister Gordon Brown.

If Cleghorn got upset when it was pointed out that Britain and the US were and still are involved in terrorising Iraq, the others took the moral high ground to judge and condemn Malaysian leaders for not behaving the way they had scripted.

While the issue of Malott and Gore had been extensively discussed, the latest addition is Clare, a former BBC journalist now on a self-appointed crusade “to protect the well-being of Sarawak”, a former British colony.

Brown, the failed prime minister of Britain, threw in his support for Clare, by alleging the Sarawak government of excessive logging and  oil palm planting, to the extent that only five per cent of the primary forest in the state is left. These accusations of deforestation of such magnitude had been denied and explained by the Sarawak authorities who threw a challenge to the Browns to “come and look for yourself”.

While there would be as many supporters and detractors of the accusations against Sarawak Chief Minister Tan Sri Abdul Taib Mahmud and the Sarawak Barisan Nasional, what is more incredulous is the ease in which the likes of Clare and Brown can raise a stink about a far-off country when the stench emanating from their own backyard stench is more putrid by comparison. It is not a case of two wrongs making one right.

Here is a situation where there is still a debate as to the accusations of wrongdoings in Sarawak while the bigger crime in Britain, which has been proven, is ignored by crusaders like Clare and Brown.

If they were so concerned about the environment, surely Clare being the “investigative” journalist that she claim she is, would have been able to highlight the depleted uranium in Iraq that is causing unthinkable horrors.

Surely Clare would be embarrassed to have the support of a brother-in-law who was a senior member of the Tony Blair administration that lied to the British people and dragged the nation into joining the Iraq invasion. How are Malaysians to believe what Brown had said and by extension, Clare’s cause, when he is known to be a partner to Blair in war crimes?

Indeed, some may argue that it is not who said it that should be the debate but rather what is said. But if the one who said it is known to have supported and spread lies that led to the deaths of thousands, surely what has been said needs to be taken with a pinch of salt.

Taib will face the people of Sarawak if he is guilty of what he is accused of. But to have the likes of Clare and Brown parlance on the moral high horse and judge him or BN is indeed nauseating.

Clare may or may not be a liar but Brown, someone proven to be prepared to support a liar, supports her. Brown had helped Blair make a mess of Iraq. Should anyone not be suspicious that he may be supporting Clare to mess up Sarawak?

What the Browns need to do to gain some credibility is to clean up their own mess and expose the war crimes of the Blair administration that led to the murders of the thousands of innocents in Iraq as well as the environmental disaster.

That done, the Browns should start apologising to Sarawakians and Malaysians for the crimes committed by the British government and the White Rajahs against their former colony. Maybe, they can help return what their forefathers had robbed and plundered.