CBIP is in the business of constructing automated palm oil mills brandnamed Modipalms. The company has also planted some 17,000ha with oil palms in Malaysia and Indonesia.
The Modipalm technology is a system of continuous sterilisation of fresh fruit bunches. It essentially automates oil extraction and reduces dependency on foreign labour.
On the company’s outlook, managing director Lim Chai Beng remarked: “The prospect looks good.”
He said palm oil prices are not likely to drop below RM3,000 per tonne in the next few months as bad weather in China and the US has caused a constraint in global supply of soyabean oil, a substitute to palm oil.
CBIP’s engineering division contributes about 40 per cent of the total earnings. Lim said this division is expected to improve this year, although it has been affected by the foreign exchange movements. About half of its contracts are quoted in US dollars.
“We’re gaining visibility in Africa and Central America. Lately, we’ve received more enquiries from oil palm plantations in Liberia, Ivory Coast, Guatemala and Mexico,” he told reporters after the company’s shareholders meeting here yesterday.
CBIP’s order books currently amount to RM400 million, enough to keep its staff busy for the next 18 months. “Now, we are negotiating for contracts beyond 2012. With the current high palm oil prices, we see promising growth in our engineering business in the year ahead.
“We’ve put bids amounting to another RM400 million. In Malaysia, many old mills are due for upgrades. Our Modipalm design is proven to be very efficient at oil recovery and this has helped contribute to higher oil extraction rates for millers,” he said.
Last month, CBIP told the stock exchange that its unit AVP Engineering (M) Sdn Bhd had clinched a RM38.35 million contract to supply 100 units of ambulance to the Ministry of Health. Lim explained that AVP Engineering has been in the business of retro-fitting ambulances and fire engines in the last five years. “We’ve supplied ambulances to the government before. Our track record in the assembly of special purpose vehicles gives confidence for repeat orders,” he said.
Manufacturers are expected to suffer the biggest impact, especially those involved in energy-intensive sectors like steel milling and the manufacture of rubber gloves, ceramics and oleochemicals.
“We are in regular engagement with manufacturers. They have, of course, said they would prefer that natural gas and electricity tariffs do not go up. The government, however, needs to strengthen its own finances,” Mustapa said.
“Sectors that are energy intensive are likely to be more impacted then energy-efficient ones. Whatever the natural gas and electricity tariff adjustment, it’ll be gradual,” he told reporters after the opening ceremony of Sapura Service Centre here yesterday.
The new US$3.5 million (RM10.57 million) investment facility is one of the long-term partnerships between SapuraCrest Petroleum Bhd and GE Oil and Gas, aimed at enhancing support for key oil and gas operators in Malaysia and the region, including Petroliam Nasional Bhd (Petronas).
Sapura Group president Datuk Shahril Shamsuddin said the partnership with GE would enable the services centre to offer an enhanced value proposition to the Malaysian and regional customers in maintaining their oil and gas producing equipment at peak performance level.
“GE’s certification gives us a stronger position. We’ll see a faster turnaround and cost savings for our customers,” he added.
The Sapura Regional Services Centre provides an enhanced range of GE Oil and Gas turbo-machinery related services, including maintenance and repairs. It is designed to enhance the performance of GE’s fleet of high-tech heavy duty and aero-derivative gas turbines and compressors installed in Malaysia and the region.
The disposal may turn Premium Nutrients into a PN17 company if the company does not venture into a new business within the time limit set by Bursa Malaysia. PN17 refers to a financially troubled entity due to it ceasing its business operations.
“About 99 per cent of our shareholders approved the sale of palm oil downstream business to Agro Asia Pacific Ltd, a unit of the Carson group,” Premium Nutrients chairman Tan Sri K.R. Somasundram said. “The sale is scheduled to conclude next month.”
He was speaking to Business Times in an interview after the company’s shareholders meeting here yesterday.
Currently, Colombo-based Carson group via Goodhope Asia Holdings Ltd, its unit in Singapore, owns around 80,000ha of oil palm plantations in Malaysia and Indonesia. It produces and sells palm oil, palm kernel and fresh fruit bunches.
Apart from brewing for Carlsberg under a licence agreement in Sri Lanka, the Carson group also produces and sells beer under the Lion brand name.
Somasundram explained that Premium Nutrients had to sell the downstream business as it is unable to compete with big and integrated palm oil players, which are financially stronger and could leverage on economies of scale.
Following the sale, Somasundram said Premium Nutrients is likely to be classified PN17 status if the company does not venture into a new business within the time limit set by Bursa Malaysia. The trading of its shares would then be suspended and the counter, delisted.
“We have 12 months to regularise Premium Nutrients’ business direction. The next board meeting is scheduled for next month. We’re open to venturing into any kind of business that makes money. One of the options include property investment and development,” he added.
Premium Nutrients clarifies status
PREMIUM Nutrients Bhd has clarified that it would be a cash company upon completion of the disposal of its palm oil refinery complex and other downstream businesses. In this case, it will fall within the ambit of PN16 of listing requirement of the stock exchange. If the company does not venture into a new business within the time limit set by Bursa Malaysia, it could then be classified a PN17 company.
Musa said since Sime Darby Plantation Liberia Inc’s (SDPLI) entry into Liberia two years ago, it had shown that it is serious in being part of the community where the estates are located.
Thus far, SDPLI had rebuilt 15 schools, stocking them up with new furniture as well as paying the teachers’ salaries.
It had also refurbished three new school buses to ferry the children to the schools within its estates. SDPLI has purchased an ambulance unit and expanded the sick wards at the hospital ground within its estates.
“We’re here for the long haul and we believe the win-win approach is the best way to do business with our partners here. After all, the oil palm is proven to be a crop of peace and prosperity,” Musa said.
Also present was Sime Darby Plantation senior vice president I of agribusiness division Helmy Othman Basha. He said SDPLI had already established four plots of nurseries that will generate 780,000 seedlings. This will kick-start the first planting of 5,200ha at Grand Cape Mount County.
“For the next 15 years, we’re scheduled to invest in infrastructure like roads, bridges, electricity and piped water. We’ll also put up the mills,” he said.
Yesterday, in a briefing, he explained to visiting Malaysian reporters that, by 2025, SDPLI intends to plant up to 170,000ha with oil palms across four counties namely Grand Cape Mount, Bomi, Bong and Gbarpolu.
Helmy said Sime Darby, a firm believer in good agriculture practice, will undertake social and environmental impact assessments before any development begins. For example, it will maintain riparian buffer zones between water bodies and planted areas.
By 2015, the group will start to put up 15 mills; each mill for every 10,000ha. These mills, while extracting crude palm oil and fueled by biomass, are self sustaining. This is because they will able to generate steam and electricity for use within the estates.
“Each of the 90-tonne an hour mill is budgeted to cost around RM90 million because of costlier building materials and logistics here,” he said.
By 2035, SDPLI should be fully-operational. “We estimate that our operations here will create and support 35,000 jobs. There will also be spillover impacts in uplifting the livelihoods of surrounding communities of the estates,” he said.
He explained that under the Liberian government’s concession to develop 220,000ha until 2072, SDPLI is required to work with smallholders to plant up another 44,000ha under an Outgrowers Scheme.
“This scheme is to help smallholders and surrounding communities, a programme similar to Felda that has tremendous multiplier effect on the local economy. Here, we will provide management expertise while the Liberian government accord financing to the smallholders.”
MONROVIA (Liberia): Sime Darby Bhd is expected to perform better in the current financial year ending June 2011, thanks to buoyant crude palm oil (CPO) prices.
“We expect to harvest more oil this year. We are happy if it (CPO) continues to trade above RM3,000 per tonne,” said Franki Anthony Dass, its executive vice-president in charge of plantations. The group will announce its third-quarter results on May 27.
Dass was speaking to visiting Malaysian reporters at Sime Darby’s newly-set up Matambo estate here.
Yesterday, the third-month benchmark CPO futures on the Malaysian Derivatives Exchange rose RM63 to close at RM3,360 per tonne.
Sime Darby, which gets 56 per cent of its operating profits from the plantation business, is likely to enjoy fatter profits margin as CPO prices have been averaging at around RM3,300 per tonne since the start of the year. This is far higher than the six months to December 2010.
Despite bad weather in Malaysia and Indonesia, the group’s plantation division achieved an average CPO price of RM2,692 a tonne against RM2,222 a tonne in the corresponding period last year.
In its last financial year ended June 2010, Sime Darby reported that its average CPO selling price was only RM2,311 per tonne. Last year, its fresh fruit bunches production was 9.87 million tonnes, while CPO output was 2.36 million tonnes.
The group owns 647,338ha of land in Malaysia and Indonesia, of which 81 per cent has already been planted. It will start planting 5,200ha with oil palms in Liberia next month. It has a 63-year concession until 2072 to plant some 200,000ha with oil palms and 20,000ha with rubber in the African nation.
Sime Darby is one of the world’s largest plantation companies, producing some 6 per cent of the global CPO output.
KUALA LUMPUR: Environmental activists’ allegations of IOI Corp Bhd committing some sort of wrongdoing at its estates in Ketapang, West Kalimantan, are just not true. This is despite these non-governmental organisations (NGOs) broadcasting and publishing their claims, over and over again.
IOI Corp Bhd, in its recent filing to the stock exchange and Roundtable on Sustainable Palm Oil (RSPO), re-iterated that in October 2010, an RSPO-certified auditor SGS investigated the allegations and concluded the deforestation complaints were baseless.
As for native customary rights land dispute with the local community neighbouring the IOI Pelita estate in Sarawak, IOI Corp had regularly invited the local community to find an amicable solution, in the presence of an independent observer.
IOI Corp even took pains to explain to the claimants, who had been instigated by activists, which they violated laws when they erected road blocks at the estate entrance, used homemade firearms to threaten its workers and steal oil palm fruits.
In an interview with Business Times, Malaysian Palm Oil Board (MPOB) chairman Datuk Shahrir Samad opined that the defamatory allegations against IOI Corp and presumption of guilt by environmental activist Friends of the Earth only serves to attract contempt of court proceedings.
“These half truths and lies published by the NGOs on the Internet tantamounts to deliberate disregard for sub-judice laws of our country. It goes on to show that these NGOs like Greenpeace, Bruno Manser Fund and Rainforest Action Network are lacking in credibility. They have no respect for the sovereignty of our country’s laws,” said Shahrir, who is also Member of Parliament for Johor Baru.
The RSPO, set up in 2004, was initially hailed as a forum where stakeholders of diverse interests are considered as equal partners.
Somehow, over the years, the roundtable concept of equal duties and rights became lop-sided. The RSPO has tipped in favour of NGOs as their expertise in communicating to the public is being carried out at the expense of palm oil producers.
While Malaysian and Indonesian planters dutifully produce RSPO-certified palm oil, consuming companies, mainly from the Europe and the US, did not fulfill their promise to pay US$50 per tonne (RM150.50) premium above market price and buy up all the oil ordered.
Meanwhile, Shahrir said there remains no check and balance mechanism to assess the credibility of these self-interested activists within and outside the RSPO.
In a separate interview, Malaysian Palm Oil Association (MPOA) chief executive officer Datuk Mamat Salleh concurred with Shahrir.
He, too, expressed his disappointment over these green NGOs trespass and protests at IOI-Loders Croklaan office in the US and that of Neste Oil headquarters in Finland.
“We’re very disappointed with Friends of the Earth’s spreading lies via the social media, urging Unilever not to buy palm oil from IOI Corp and the public to stop consuming palm oil,” he said.
Last month, the RSPO executive committee immediately suspended IOI Corp’s certifications upon complaints from other green activists, without first verifying with Moody’s International, an authorised RSPO certified auditor, on the fact finding process.
Such a move gave the impression that IOI Corp is already guilty of some wrongdoing despite the case still being tried at the High Court in Sarawak. “This is a prime example of green activists behaving as whistleblowers, judge, jury and executioner, all roled into one. Where’s the check and balance? Why should we tolerate such conflict of interests?” Mamat questioned.
Renowned economist Milton Friedman once said the social responsibility of business is simply to maximise the rate of return to shareholders that are consistent with the law. Anything that sidetracks corporate management from that responsibility spells big trouble.
Mamat noted that hundreds of million of corporate money have been and continue to be diverted away from investors and redistributed elsewhere – not by duly constituted governments – but as a result of extortion via greenmailing wielded by wealthy green activist groups who are accountable to no one, but their “well-meaning donors”.
These wealthy green activist groups, Mamat added, have taken to execute coup d’etats to dictate business policies and behavior based on their narrow definition of sustainability, thereby compromising what is equitable and fair to shareholders of oil palm companies in Malaysia and Indonesia.
This is written by Jane Byrne and sourced from Food & Drink Europe. Here’s the link http://www.foodanddrinkeurope.com/Products-Marketing/New-CSPO-deal-means-palm-oil-certs-no-longer-needed-says-NBPOL
A new deal is set to result in a huge injection of palm oil from certified sustainable sources into Europe and could spell the death knell for green certificates, said New Britain Palm Oil Limited.
New Britain Palm Oil Limited (NBPOL) said that it has agreed with palm oil company, Wilmar International, to process and jointly market its palm oil in continental Europe. The deal is said to involve the refinement of up to 300,000 tonnes per annum of fully traceable certified segregated palm oil (CSPO) palm oil from NBPOL’s estates at Wilmar’s Brake refinery in Germany.
Palm oil is used in 1 in 10 products in the supermarket including bread, crackers, chips, margarine and cereals, as well as personal care and beauty products such as soap and lipstick. The European market uses five million tonnes of the ingredient per annum.
When asked what the impact of this deal would be in terms of European food and cosmetics manufacturers’ palm oil usage being more sustainable, Alan Chaytor, executive director of NBPOL said: “From the Brake refinery, NBPOL & Wilmar have committed to supply 300,000 tonnes per annum of segregated CSPO. Through our Liverpool plant we already have currently 150,000 tonnes per annum and a further 120,000 tonnes per year from our refinery in Papua New Guinea. So all in all that’s just shy of 600,000 tonnes of efficient segregated CSPO capacity – that’s perhaps 12 per cent of European demand.”
Alessandro Cagli, corporate social responsibility director, the Ferrero Group, said the chocolate maker welcomed the move, adding that the two palm oil players were “serious” about increasing CSPO supply in Europe.
NBPOL said that the palm oil will be available from Wilmar’s refinery in Brake, Germany in a whole range of products in 100 per cent segregated sustainable format from mid-2012. Chaytor commented that this facility “already has refining capacity for refined palm oil and palm kernel oil, [as well as] fractionation capacity for stearin, olein and interestification.”
And NBPOL added that its refinery in Liverpool and Wilmar’s plant in Brake will assist the other in the specific palm oil product formats that they individually do not have. According to Chaytor, the bulk of food producers’ palm oil needs are from the three or four basic refined grades “as clearly evidenced by the actual refining capacity installed in Europe.”
He argues that the industry should focus on buying these mainstream palm oil products first and the much lower volume of the many smaller derivatives will naturally follow.
This deal, commented Chaytor, ensures that fully segregated, traceable and certified sustainable and affordable palm oil will be made available in enough product specifications and formats that “food manufacturers throughout Europe will no longer need to buy palm oil offset certificates.”
Indeed, the executive director argues that many “view green certificates with a great deal of suspicion as to what effect, if any, purchasing them has on making the palm oil industry sustainable.” Chaytor said that under the current certificate trading system, buyers have little idea where their oil actually comes from and “the vast majority is from uncertified sources.”
“We feel that this is not widely understood and we don’t think it is what consumers want in their products,” remarked the NBPOL executive director. “Additionally, the entire system including all the associated claims is unaudited and therefore open to abuse. We just feel the concept is flawed and potentially misleading.”
He argues that for those products which are not currently available in fully segregated format, companies are not restricted to green certificates but also have the option of a Mass Balance claim. “We agree with several of the major retailers that Mass Balance is a much more progressive step toward promoting wholesale conversion as, unlike certificate trading, it is directly linked to physical supply,” continued Chaytor.
When questioned on whether the higher cost is still a huge factor in a lot of food manufacturers not switching to CSPO the NBPOL spokesperson said: “Well if companies are going to come close to meeting their commitments on sustainable palm oil use, then they have to start somewhere and this deal marks an important step along that path.”
Chaytor claims that due to the scale and efficiency of the arrangement with Wilmar, coupled with its Liverpool refinery, the two firms can offer a huge range of fully traceable and certified oils with commodity style economics that make it more affordable.