Archive for October, 2013

Palm oil brightens up Festival of Lights

October 31, 2013 Leave a comment
ENLIGHTENING: As Hindu families gather for Deepavali, a well-informed devotee tells OOI TEE CHING that the traditional delicacies are best prepared with palm cooking oil and it is also used in other religious rituals.

THE first thing Lectumy Devi Subramaniam serves her guests on Deepavali is a sweet like ladoo and adhirasam, so that the start of the new year for them is also sweet. 

For the Festival of Lights celebration, achi murukkus with its distinct flower shape and murukkus are must-haves.

Murukku is a savoury snack made by combining rice flour and black bean flour made into a paste. This dough is pressed through a mold and the “textured” ropes are laid in tight spirals onto trays. These are then deep-fried in palm cooking oil.

Lectumy said her family has been using palm oil to deep-fry traditional delicacies such as achi murukku and murukku for some 20 years now. 

Before that, coconut oil was the main kitchen staple. Lectumy learnt to prepare Deepavali delicacies at the tender age of 14 from her mother. 

When Malaysia’s palm oil refining industry churned out palm cooking oil to be widely distributed and conveniently stored in the 1980s, Lectumy’s family made the switch from coconut oil.

In the last decade, despite Malaysia being one of the biggest exporters of palm oil, there had been an influx of cold climate cooking oils such as olive, soyabean, corn, canola and sunflower. 

Having experimented with a wide variety of edible oils, Lectumy found that palm oil is able to withstand deep-fry heat better than other vegetable oils like olive, soyabean, corn, canola and sunflower. 

Deepavali marks the victory of good over evil. The Sanskrit word “Deepavali” means an array of lights and it signifies the victory of brightness over darkness.

Lectumy highlighted that every religious ritual has a significance. The very act of lighting up clay lamps is to dispel the darkness of ignorance and glorify the light of God. 

Lighting up darkness reflects attainment of knowledge where there is ignorance and spreading of love amid hatred. Light is significant in Hinduism because it signifies goodness. Homes are lit with clay lamps to ward off darkness and evil.

Another ritual is to have an oil bath before sunrise on Deepavali day. It helps boost blood circulation, remove dead cells from skin surface and cleans body thoroughly. 

Massage oils used in oil baths are partly derived from oleochemicals that are processed from palm oil.

It was an enlightening experience to learn that palm oil, while mostly used for cooking and baking, is also present in religious rituals.

Nutritionally balanced, rich in Vit E

IN an interview with Business Times, in Kuala Lumpur, Malaysian Palm Oil Council (MPOC) chief executive Tan Sri Yusof Basiron states the facts and figures about palm oil nutrition.

Q: Why does palm cooking oil sometimes turn “cloudy” when placed in the refrigerator? Is the oil still safe for consumption? 

A: Palm oil becomes jelly-like and cloudy when stored in the fridge, when all the other major vegetable oils remain liquid. This is due to its 50 per cent content saturated acids, mainly palmitic and stearic, which help to increase the HDL, “the good cholesterol”. 
More importantly, the other half of palm oil’s fat content is monounsaturated and polyunsaturated – known to reduce LDL, the “bad cholesterol”, and can benefit the cardiovascular system. 
Unlike other vegetable oils grown in temperate countries, palm oil contains the whole spectrum of Vitamin E, minerals, antioxidants and other phytonutrients. Its deep orange hue shows it is packed with beta-carotene, a Vitamin A variant. 

Q: Is palm oil less nutritious than other more expensive cooking oils? 

A: Palm oil is nutritionally balanced. One tablespoon of palm cooking oil contains 120 calories and 13.6g of fat. With a balanced combination of polyunsaturated, monounsaturated and saturated fats, palm oil is made up of 44 per cent oleic, 10 per cent linoleic, 40 per cent palmitic and five per cent stearic acids. 
While palm oil is the cheapest cooking oil in the world, it is nutritionally comparable to olive oil in its cholesterol effects. 
Red palm oil is packed with carotenes such as beta-carotene and lycopene – the same nutrients that give tomatoes, carrots and papaya their reddish-orange colour. Palm oil has the richest natural source of the supervitamin E called tocotrienols. Olive oil does not contain any carotenes or tocotrienols, yet it is marketed as being heart healthy. 

Q: Does palm cooking oil contain cholesterol? 

A: Like all vegetable oils, palm oil does not contain cholesterol. In fact, the US Food and Drug Administrator has allowed palm-based products sold under the Smart Balance brand (containing up to 50 per cent palm oil and 50 per cent local oils) to carry the US patented label “To help increase HDL (good cholesterol) and improve the cholesterol ratio (HDL/LDL)”.

Q: There is much literature on the Internet stating palm oil is high in saturated fats. Is it bad for health?

A: Palm oil is actually nutritionally balanced. A recent analysis published in the January 2010 issue of the American Journal of Clinical Nutrition showed that there was no evidence to show that dietary saturated fat was associated with an increased risk of cardiovascular disease.
The effect of saturated fat should be seen in the context of a person’s overall diet and environment. High intake of fatty acids associated with low intake in polyunsaturated fatty acids, consumption of sugary and salty foods, excessive alcohol intake, smoking and stress collectively trigger the onset of cardiovascular diseases. Fortunately, palm oil has a 50:50 profile of saturated and unsaturated fatty acids.

Call to abolish windfall tax

October 25, 2013 Leave a comment

KUALA LUMPUR: OIL palm planters are reiterating their long-drawn appeal to the government to abolish the windfall tax, as it is seen as a deterrent for new investments.

“Planters are having a tough time with slimmer profits following worker shortages and the implementation of the minimum wage,” said Malaysian Estate Owners Association (MEOA) president Boon Weng Siew. 

“Since the government restructured the CPO tax this year, it should have also abolished the windfall tax,” he added.

When CPO trades above RM2,250 a tonne, planters pay a 4.5 per cent export duty and when the price rises above RM2,500, planters have to pay 5.5 per cent export duty as well as windfall tax. 

“This double taxation is punitive to oil palm planters in Peninsular Malaysia,” Boon said.

He noted that oil palm planters in the Peninsular are expected to start paying windfall tax soon as the average crude palm oil price is nearing RM2,500 a tonne in the cash market. Planters in Sabah and Sarawak only need to pay windfall tax if the price crosses RM3,000 per tonne.

On top of the CPO export duty and windfall tax, oil palm planters also have to pay a 25 per cent corporate tax, cess amounting to RM13 per tonne of CPO, as well as a 7.5 per cent and 5.0 per cent sales tax in Sabah and Sarawak, respectively.

When compared to businesses in other sectors that just pay 25 per cent of corporate tax, it is obvious that oil palm planters are the most heavily taxed in the country.

It is even more punishing in Sabah and Sarawak. For every RM1 an oil palm planter in Sabah earns, he pays 40 sen in total cess and taxes, while in Sarawak, it is 37 sen.

MEOA also urges the government to cancel the cooking oil subsidy, which benefits restaurant operators, traders and people across the border more than the hardcore poor.

Currently, 75,000 tonnes of subsidised cooking oil are produced monthly when only 40,000 tonnes are needed for household consumption.

Subsidised cooking oil is now capped at RM2.50 a kg against the open market price of more than RM4 a kg in Thailand, Indonesia, Singapore and the Philippines.

“The price of palm-based cooking oil should be allowed to float in the open market,” said Boon, adding that cooking oil vouchers can be issued to poor households to mitigate the impact of higher prices should the government do away with the subsidy. 

Palm Oil Refiners Association of Malaysia (Poram) chief executive officer Mohammad Jaaffar Ahmad concurs with MEOA that Malaysia does not need 75,000 tonnes of subsidised cooking oil a month, which is equivalent to 31kg per capita. The global average oil and fats consumption is only 20kg per capita.

Poram also urges the government to remove the five per cent export duty on refined palm kernel oil (PKO). Refined PKO is the only processed variant that is taxed across the value chain.

NextFuels plans to introduce drop-in biofuels

October 9, 2013 Leave a comment
FUNGIBLE OPTION: The people behind biofuels trader Enagra Inc, based in the United States, were pioneers in shipping biodiesel to the US from Malaysia back in 2005. In leapfrogging towards a ‘greener’ initiative, they are looking to produce ‘drop-in’ biofuels derived from palm biomass, Ooi Tee Ching writes.

MICHAEL Petras scrolls through his smartphone for trading updates as he prepares for a chat session on making money from turning biomass to biofuels. 

“We’re looking to partner oil palm plantation firms to produce biofuels that are fungible with existing petroleum infrastructure,” the founder of Enagra Inc said in an interview here recently.

Fungible is a word rarely used in everyday conversation but it is common in the petroleum industry. It refers to the ease of mixing two fuels and not having any worries of how they will behave in the pipelines, tanks and engines. Two fuels of identical chemistry are fungible.

Currently, a handful of process engineering companies in Malaysia are experimenting with the development of second-generation biofuels from palm biomass. 

Here comes Petras purporting he has the right technology to catapult the industry to produce third-generation biofuels very much welcomed by petroleum companies.

Sensing scepticism, Petras quipped: “We were the pioneers in shipping palm biodiesel to the US. We had to deal with strong criticisms. I know … it’s a constant battle with disbelief. After a while, we kind of got used to taking arrows shot in our chests!”

Petras said the third-generation biofuels venture is being spearheaded by sister company NextFuels LLC. His team is pioneering an initiative of converting biomass to biofuels that are chemically identical to their petroleum-based cousins and can, therefore, be immediately fed into petroleum refineries as transportation fuel because they are compatible with current engine technology. 

“First-generation fuels cannot be used in unmodified engines above small blends and are not applicable to the jet fuel market,” he said.

In leapfrogging into the production of third-generation biofuels, Petras explained the resultant fuel called GreenCrude is fungible hydrocarbon-based molecule and can be used seamlessly in cars, trucks, buses, planes, boats and trains. 

These advanced biofuels are consumer ready and do not require significant changes to current petro-leum refinery infrastructure, such as separate pumps, new flex fuel cars, or pipelines.

Based on current technology, Petras believes advanced biofuels can help meet the world’s future energy needs because they are scalable, commercially viable and affordable for consumers. 

“Since the chemical molecules of advanced biofuels is the same as fossil fuel, they are packed with more energy per litre than first- or second-generation biofuels,” he said. 

“You could basically drop in these biofuels into the oil majors’ distribution channel. With third-generation biofuels, oil majors don’t need to spend additional capital to build a parallel distribution system,” he added.

To put third-generation biofuels into perspective, Petras outlined the similarities and differences from the first- and second-generation biofuels. 

First-generation biofuels are created largely from feedstock that have traditionally been used as food. Biodiesel from vegetable oil and animal fats; and ethanol from corn have been subjected to vehement criticisms and often labelled the culprit behind rising food prices. 

Second-generation biofuels are made from biomass and this circumvents the heated debate of food-versus-fuel dilemma. Feedstocks include wood chips, palm biomass and municipal waste like garbage. 

Petras believes there is a better path forward in the form of third-generation biofuels. These fuels are produced from non-food sources like biomass and yet chemically identical to their petroleum counterpart.

In comparison, there are several technological pathways to converting biomass into liquids. For example, when biomass is processed at low temperatures, ranging from 250 to 350°C without oxygen, it undergoes a torrefaction process and the major conversion product is biochar. 

At greater temperatures of between 550°C and 750°C, also without oxygen, the process is known as pyrolysis (either fast or slow depending on the heat exchange rate with the biomass) and the major product is bio oil. 

At even higher temperatures of between 750°C and 1,200°C with limited inputs of oxygen, gasification occurs, producing mostly syngas with biochar and bio oils as by-products.

NextFuels’ approach is quite different. Instead of operating in a dry environment, NextFuels’ bio-liquefaction process heats the biomass in a liquid-water slurry at high temperatures and pressure. 

The bio-liquefaction process expels most of the oxygen from the biomass. The final product is GreenCrude, a renewable fuel that has identical molecular structure as that of petroleum.

Also present at the interview was NextFuels vice-president of sales for southeast Asia, Milton Leong. He emphasised the cost-saving advantage in NextFuels’ technolgy is not having to dry the biomass before processing.

The bio-liquefaction method is specifically designed to work with wet biomass. As a result, the energy balance achieved is around 65 to 70 per cent. By contrast, processes like Fischer-Tropsch are only able to achieve energy balances of up to 40 per cent.

Leong said NextFuels plans to put up its pilot plant in Malaysia by mid-2014. “We’ve not finalised the exact location but it will be near to a biomass source.” 

Leong noted that the bio-liquefaction technology allows NextFuels to commercially produce bio-based petroleum at US$75 to US$85 (RM239.50 to RM271.40) a barrel out of wet biomass.

“One can distill 960 barrels of GreenCrude per day (bpd) from the biomass churned out from a typical 60-tonne palm oil mill,” he said.

Breakthrough in oil palm research

October 4, 2013 Leave a comment

This is written by columnist Dr Ahmad Ibrahim.

KUALA LUMPUR: RECENTLY, scientists from the Malaysian Palm Oil Board (MPOB) made headlines. Their breakthrough in deciphering oil palm genome was well-received.

Dr Ravigadevi Sambanthamurthi, a fellow of the Academy of Sciences Malaysia who led the team, could not hide her excitement in a recent talk at the academy’s idea exchange event. 

The discovery promises to break the deadlock in palm oil yield, which has been stagnated for many years now. When that happens, palm oil production in Malaysia is set to expand again. This is also expected to bring comfort to the industry, which is under pressure from environmental groups calling for further restrain in opening new land for oil palm cultivation. 

With the expected 30 per cent improvement in yield, the oil palm will continue to widen its lead in productivity over other competing oils. 

What exactly is the breakthrough? How significant is it? And, how would the findings be put to use? 

Though led by Malaysians, the team had collaboration from Orion Genomics, a United States biotech company. 

The discovery involves the identification of a single gene, called Shell, that is responsible for increasing the plant’s oil yield. 

It is significant in terms of scientific advancement, considering that two papers from the work were accepted for publication in the prestigious international journal, Nature. 

But more important is the potential the findings will have in bringing benefits to the palm oil industry. For decades now, palm oil is a source of nearly one-half of the supply of edible vegetable oil worldwide. This is now expected to be sustained for a longer term.

According to MPOB director-general Datuk Dr Choo Yuen May: “The discovery will have a significant impact on the Malaysian economy because for every one per cent increase in palm oil yields, Malaysia gains RM1 billion (US$330 million) in income.”

The oil palm that is widely grown in Malaysia is a hybrid of two varieties: dura, which has thick shells and therefore gives lower yield, and the shell-less pisifera, which makes processing difficult to separate the palm oil from the kernel oil. 

The hybrid of the two is the tenera, which is the common variety cultivated. It has a thinner shell than the dura and therefore has better yield.

Seed producers rely on selective breeding techniques to maximise plantings of tenera palms. The problem is that they often end up with up to 10 per cent of plantings may be the low-yielding dura. This arises because of the uncontrollable wind and insect pollination. Identifying whether an oil palm plantlet is the desired shell type can take six years. This can be costly because, by then, the trees cannot be uprooted. 

The identification of Shell has enabled the development of a simple molecular screen that can be used with seeds and plantlets to prevent the cultivation of undesired non-tenera plants, thereby, raising the efficiency of oil palm plantations.

The researchers also hope their public release of the genome will allow other scientists to pinpoint more genes that might be useful for improving oil palm trees, such as resisting drought and diseases. “We’re not going to stop here,” said Ravigadevi.

The board, which is financed by the government, paid for most of the research. Genome-driven improvements to oil palm trees, the researchers argue, could allow farmers to produce more oil on less land. Writing in Nature, they claim that the genome will “help to achieve sustainability for biofuels and edible oils, reducing the rainforest footprint of this tropical plantation crop”.

The new study is “a major breakthrough”, said David Edwards, a conservation biologist at James Cook University, Australia. “The only way that we will be able to feed the projected human population of nine to 10 billion without huge waves of deforestation is through increases in crop yield.”

Apparently, French scientists have been working for seven years to break the yield code. The breakthrough is further testimony of the fact that Malaysia is not short of world-class scientists!

IOI Corp launches Unico-Desa buyout

October 3, 2013 Leave a comment
This is written by my colleague Lim Cian Yai.

KUALA LUMPUR: PLANTATION and property giant IOI Corp Bhd has launched a RM1 billion buyout of Unico-Desa Plantations Bhd.

IOI Corp yesterday announced the acquisition of a 39.55 per cent stake, or 339 million shares, in Unico-Desa by its subsidiary, IOI Plantation Sdn Sdn Bhd.

The stake was bought from former Unico-Desa managing director Teoh Hock Chai and Amity Corp Sdn Bhd for RM396.63 million, or RM1.17 per share.

The deal has triggered a mandatory takeover offer for the remaining 60.45 per cent stake in Unico-Desa, IOI Corp said in its filing to Bursa Malaysia yesterday.

The mandatory offer, also priced at RM1.17 per share, will amount to RM606 million. So collectively, IOI Corp will be paying RM1 billion for all of Unico-Desa shares.

Unico-Desa’s core business is in the cultivation of oil palms, milling and distribution of palm oil and palm kernel oil. About 12,700ha in Lahad Datu and Kinabatangan, Sabah, is planted with oil palms, of which 9,121ha is of prime bearing ages. 

The RM1.17 a share price tag works out to be a 37 per cent premium above Unico-Desa’s net asset of 85 sen a share.

IOI Corp said the acquisition will increase its plantation landbank to 196,867ha from 183,207ha. “This is expected to bring synergistic benefits to IOI Corp as it has an existing 98,088ha planted with oil palm in Sabah,” the company said.

Upon completion of the buyout, IOI Corp’s gearing ratio will increase marginally to 0.39 time. It does not intend to maintain Unico-Desa’s listing. 

Unico-Desa is listed on Bursa Malaysia’s Main Market since 2000. It netted RM25.46 million in profits for the year ended March 2013. Yesterday, Unico-Desa’s shares closed unchanged at RM1.18.