Archive for April, 2013

Move to remain TOP brand

April 26, 2013 Leave a comment

PETALING JAYA: SOUTHERN Lion Sdn Bhd, a 50:50 joint venture between Lam Soon (M) Bhd and Japan’s Lion Corp, aims to capture half of Malaysia’s detergent market by year-end from the current 47 per cent.

Its range of brands are Top, Biozip, Puteri Mas and Dobi. 

“Although Top is the leading detergent brand in Malaysia, it’s important that we strengthen our position with new offerings that meet customers’ needs in today’s context of modern living,” said Southern Lion marketing director William Khoo.

He reiterated the company’s brand promise of delivering practical solutions to modern day space constraints for washing and drying clothes among high-rise dwellers, night washing and indoor drying for busy working professionals, smaller families, and the practice of energy and water saving.

In explaining Top’s latest feature, Khoo said the detergent is able to help create a more healthy living condition in the bedroom.

While we cannot completely eliminate dust mites from our homes, we can significantly reduce their number. Apart from vacuuming carpeting and upholstered furniture, we can reduce allergens that accumulate in our bedsheets, pillow cases and blankets by laundering the bedding materials every week. 

“This is where Top comes in handy. Our new anti-dust mite formula is specifically formulated to remove 99.99 per cent of dust mite from our laundry,” he said at the launch of the new variant here yesterday. 

Also present were Southern Lion managing director Annette Ling, senior marketing manager Carmen Foo and Japan’s Lion Corp head researcher (New Technology Development), Fabric Care Research Laboratories Dr Seiichi Tobe.

“We’ve successfully developed an enzymatic cleaning technology that breaks down soluble allergens in mite dust so that they are easily removed during the washing process. This will help minimise the risk of allergy triggered by mite dust,” said Tobe.

Many detergent makers, in a bid to improve environmental profile, have been sourcing renewable ingredients such as palm oil. Southern Lion’s range of detergent incorporates a highly biodegradable substance called methyl ester sulfonates (MES) that is produced by its sister company, Lion Eco Chemicals Sdn Bhd, in Johor. 

“Our leading brand Top uses MES in its formulation because of its high detergency at low concentrate, even in mineral water. It is a very efficient cleaning agent,” Khoo said. 

In Japan, parent company Lion Corp has been incorporating MES in its Top and Biozip brands of laundry detergent since 1991.

WWF agenda punishing the poor

April 25, 2013 Leave a comment
Alan Oxley is chairman of World Growth, a pro-development NGO that which has recently released a study assessing the impact of RSPO certification on producers of palm oil.

KUALA LUMPUR: THE Worldwide Fund for Nature (WWF) is one of the world’s wealthiest international environmental non-governmental organisations (NGOs). Its total global spending is close to US$500 million a year.

But it has blind spot, a big one. Eradication of poverty is not a priority for WWF.  

In fact, the NGO’s strategies to protect the environment hinder efforts to combat poverty. This will be clear today when the Roundtable on Sustainable Palm Oil (RSPO) meets here for an extraordinary session to insert WWF’s anti-development agenda into a revision of the RSPO standard. 

The revised standard includes onerous provisions for growers to report on greenhouse gas emissions. This is despite an acknowledgement by the RSPO that there is currently no practical or robust methodology for any such assessment. 

Growers and millers are being asked to comply with sustainability requirements that lack scientific rigour, and are costly and technically demanding.

Malaysian growers are perturbed. Smallholders in particular should be concerned. The revised standard includes several new criteria that will increase costs for growers, without assuring improved environmental outputs on the farm. 

The RSPO system is already too expensive and technically difficult for the majority of oil palm growers who manage small-scale plantations. There is little evidence that certification under RSPO adds value for growers who are required to meet expensive certification costs.

The system effectively prices palm oil producers out of the global oilseed and vegetable oil markets.

That appears to be WWF’s intention. Restricting the viability of Malaysian oil palm growers has a detrimental impact on the hundreds of thousands of households whose livelihood relies on palm oil production, as well as rural communities who have seen significant development as a result of increasing investment and infrastructure. This is the WWF blind spot. 

Instead, WWF focuses most of its resources on demonising palm oil through a global campaign. It contends that unless producers follow WWF’s rules for cultivating oil palm, forests and habitats for wildlife will be destroyed. 

There is no scientific justification for this claim. Forest land has been converted to oil palm plantations but the United Nations points out that worldwide, poverty is a primary driver of deforestation, as people clear land for housing, subsistence farming and fuel wood. 

Subsistence farming, gathering of fuel wood and unplanned urbanisation drive most global deforestation. Eradicating poverty is the solution to excessive deforestation, not limiting production of palm oil.

The campaign also jeopardises smallholders income, thus their ability to put food on the table for their families. Palm oil is a high-quality and low-cost vegetable oil, widely used in Malaysia, Indonesia, China, India and Africa. 

Development agencies, such as the World Bank, rate oil palm as one of the most effective crops for raising living standards and promoted the industry in Southeast Asia as a poverty-reducing crop. Smallholders prosper when producing oil palm.

The WWF system raises costs and decreases the viability of small producers. It is also not working for big business. 

In order to comply with RSPO requirements, large-scale growers must invest heavily in consultants, auditors and expensive management systems. Manufacturers, like Unilever, have to meet high cost of using more expensive WWF-approved palm oil and segregating supply chains. 

Yet, there is little commercial benefit or return on investment. There is no demand among consumers for RSPO-certified products as a recent poll in Britain concluded. 

Businesses went along with the RSPO model, thinking it would be profitable. It wasn’t. Only about 10 per cent to 15 per cent of palm oil produced worldwide is certified under the RSPO system, while only half of that is purchased.  

Consumers in developing markets are only interested in low-cost, affordable palm oil. And in wealthy Western markets, consumers won’t pay a premium for the more expensive certified oil. Yet, WWF presses on, oblivious to the failing market demand for certified product and dire economic consequences for Malaysian farmers. 

Clearly, WWF does not care. Its global policy is to prevent any conversion of forested land to other purposes, including farming, regardless of forests set aside for conservation. This further punishes the poor. 

World Growth advocates that agricultural production must increase in order to meet global demand for food.

Oil palm growers slam bias e-voting

April 22, 2013 Leave a comment
PETALING JAYA: OIL palm growers are unhappy with the Roundtable on Sustainable Palm Oil’s (RSPO) move to implement electronic voting.

Currently, voting is done via manual balloting or show of hands.

The RSPO, which was formed in 2004, is seen as being lopsided against the growers, who come mainly from Asia. The other stakeholders are based in Europe.

On paper, the growers have four executive board positions from the 12 seats available. However, the other stakeholders, namely the food manufactures and non-governmental organisations, seem to have formed a cartel of their own within the RSPO.

“Already, growers are not adequately represented in RSPO’s decision-making process. So, it is only natural to question the proposal to vote electronically on lopsided proposals that seek to further burden oil palm growers,” said Malaysian Palm Oil Council chief executive officer Tan Sri Yusof Basiron.

“This clear case of biasness in RSPO will lead to undemocratic outcome that is not reflective of the voice of oil palm growers. As the sowing of seeds of discontent worsens, it can and will lead to more sorry state of affairs and eventually… its downfall,” he told Business Times in an interview.

On April 25, the RSPO will vote on proposals on minimising greenhouse gas (GHG) emissions from new plantings, implementing policies countering corruption, adopting human rights policy and banning the use of forced labour.

“While these proposals seem to imply stricter rules for altruistic intent, they are basically aimed at raising growers’ production cost at the discretion of RSPO’s decision makers and, thus, making palm oil exports uncompetitive,” he said.

It was reported that RSPO executive board president Jan Kees Vis said the revised criteria, indicators, and guidance will enhance the effectiveness and relevance of the Principles and Criteria, and help address the sustainability challenges facing oil palm cultivation.

In response, Yusof reiterated that oil palm planters do not agree to changes to the existing eight Principles and 39 Criteria.

In a separate telephone interview from Kuching, Sarawak Oil Palm Plantation Owners’ Association (SOPPOA) secretary-general Philip Ho concurred with MPOC.

“Lopsided decision-makings within RSPO is certainly not a yardstick for any organisation to be viewed as balanced in its presentation of views and opinions,” he said.

Ho cited RSPO’s proposal to impose GHG emission measurement for certification as akin to putting additional and unnecessary burden on oil palm growers when such demands are not imposed on other vegetable oil crops like rapeseed and sunflower.

“How come large cattle and sheep rearing activities, which cause tremendous GHG emissions into the atmosphere, are not subjected to these demands?,” he asked.

Indeed, worldwide areas planted under rapeseed, sunflower and corn far outnumber oil palm but these crops are not subjected to GHG emission checks for certification.

“Where is the justice and fairness in such a scenario? Why are oil palm growers singled out while other oil crop farmers in the developed world are not subjected to these same demands? Why are oil palm growers having to face double standards?” Ho questioned. 

He went on to say SOPPOA members have always fully upheld Malaysia’s laws and stringent measures that are being implemented in the palm oil industry. “We do not agree to RSPO’s imposition of unreasonable and unjustifiable standards,” he said.

Al-Hadharah REIT keen to top up assets

April 18, 2013 Leave a comment
KUALA LUMPUR: AL-HADHARAH Boustead REIT is keen to buy income-generating plantation estates to top up its asset base, chairman Tan Sri Lodin Wok Kamaruddin said.

Currently, Al-Hadharah REIT has 12 oil palm plantations and three palm oil mills with a combined area of around 20,000ha.

Boustead Holdings, the parent of Al-Hadharah Boustead REIT, has an agriculture landbank of 81,333ha. To-date, more than 80 per cent of the landbank has been planted with oil palms.

Lodin, who is also Boustead deputy chairman and group managing director, expects crude palm oil (CPO) prices to rise to RM2,600 per tonne.

For the past seven months, CPO prices on the Bursa Malaysia Derivatives Exchange had been fluctuating between RM2,200 and RM2,500 a tonne.

“Since the start of the year, the CPO inventory level has started to come down from a record of 2.6 million tonnes to 2.14 million tonnes at end-March. If this trend continues, we can expect to see it coming down further to about 1.8 million.

“This, coupled with strong demand ahead of Ramadan month from Islamic nations and south Asian countries like India, Pakistan and Bangladesh, will be a boost to palm oil prices. As global demand starts to pick up and production comes down a little, we can expect palm oil prices to rise to about RM2,600 per tonne,” Lodin said.

While 19,945ha of Boustead’s 68,375ha planted area is injected into the Al-Hadharah REIT, he said, it is open to asset inclusion from other estate owners.

“We are open to acquire new assets to top up the REIT. It does not always have to be injected from Boustead. If there are any other estates that are profitable and interested to be part of the REIT, we are open to discussions. We prefer them to be in the right location and, of course, at the right price,” Lodin said after Al-Hadharah REIT’s inaugural annual general meeting here yesterday.

Also present were Al-Hadharah REIT chief executive officer Fahmy Ismail and executive director Daniel Ebinesan.

In raising yield at the Al-Hadharah REIT estates, Lodin said Boustead’s plantation team will continue its replanting programme to replace ageing trees with high-yielding hybrids and clones supplied by its associate, Applied Agricultural Resources Sdn Bhd (AAR).

AAR, an equal joint venture between Boustead Plantations Bhd and Kuala Lumpur Kepong Bhd (KLK), had been breeding hybrids for the past 25 years.

“Our high-yielding hybrid seeds are meticulously bred and cloned by AAR scientists,” Lodin said, adding the hybrids have proven track records of producing more than 35 tonnes of fresh fruit bunches with 23 per cent oil extraction rate.

That works out to be about nine tonnes of oil a hectare in a year or more than two times higher than the country’s average yield.

“AAR’s role has helped sow the seeds for good and stable dividends for the REIT unitholders every year since 2008,” he added.

In the long run, Lodin noted AAR’s palm breeding plan is to produce elite planting materials using marker assisted genome-wide selected palms. This, he said, will lead to a speedier and more precise prediction of superior parents for seed production.

Boustead: RM9b combat ship deal to buoy earnings

PETALING JAYA: Boustead Holdings Bhd is hopeful of doing better this year as its shipbuilding unit steps up implementation of the RM9 billion job to build six littoral combat ships for the Defence Ministry.

“We hope to achieve better results this year as we step up the fabrication of the littoral combat ships,” said Boustead Holdings deputy chairman and group managing director Tan Sri Lodin Wok Kamaruddin.

Out of its six core businesses, oil palm planting is the biggest earnings contributor, followed by shipbuilding and property development. 

Last year, Boustead’s earnings shrunk as palm oil prices fell. In the last six months, the third month benchmark palm oil futures on the Malaysian Derivatives Exchanges had been trading at low levels of between RM2,200 and RM2,500 per tonne.

The government had proposed the setting up of a consortium to re-ignite the country’s dying biodiesel sector by trimming national stockpile and supporting palm oil prices.

Named Biodiesel Malaysia Sdn Bhd, the consortium is 30 per cent-owned by Felda Global Ventures Holdings Bhd while Sime Darby Bhd will hold 20 per cent. The remaining 50 per cent is reserved for industry stakeholders, including plantation companies, biodiesel players and oil companies.

Asked if Boustead’s fuel retailing arm, Boustead Petroleum Marketing Sdn Bhd, is keen to take up a stake in Biodiesel Malaysia, Lodin said: “If the biodiesel distribution venture can bring in good returns, why not? We’ll need to assess the details”.

Last year, Malaysia produced about 130,000 tonnes of palm-based biodiesel, of which 100,000 tonnes were for domestic consumption and only 30,000 tonnes exported.

Lodin was speaking to reporters after the group’s shareholders meeting held here yesterday. Also present were chairman Jen. (B) Tan Sri Ghazali Che Mat, director Datuk Ghazali Mohd Ali, group finance director Daniel Ebinesan, heads of business divisions Laksamana Madya Tan Sri Ahmad Ramli Mohd Nor, Chow Kok Choy, Datuk Koo Hock Fee and Tan Kim Thiam.

To another query if Boustead’s banking arm, Affin Holdings Bhd, is still keen to acquire Hwang-DBS (M) Bhd, Lodin said the group had submitted its request to Bank Negara Malaysia to start negotiations.

“Hwang-DBS operations are complementary to that of Affin. We’re hopeful that we stand a good chance to be chosen as acquirer. We’re awaiting the central bank’s approval,” he said.

Affin’s major shareholders are the Armed Forces Pension Fund or Lembaga Tabung Angkatan Tentera (LTAT) (35.2 per cent), The Bank of East Asia Ltd (23.5 per cent) and Boustead Holdings Bhd (20.7 per cent). The Employees Provident Fund owns some seven per cent of the group.

On property development, Lodin maintained that Boustead’s RM160 million purchase of a 200-acre plot in Bukit Raja, Klang, is not a political bailout. 

“It was a commercial decision and it worked out to be RM18.40 per sq ft, a fair price for our shareholders. We had actually set our sights on that land since 2005 as it is located next to our existing 700-acre plot. We’re looking to reap economies of scale in developing this 900-acre plot in the near future,” he said. 

Asked if LTAT, which owns 61.8 per cent of Boustead, may want to loosen its grip on its flagship investment arm, Lodin, who is also LTAT chief executive officer, said: “It is good to have liquidity. LTAT will do so at the right time and right price and make some capital gains along the way”.