Archive for July, 2014

Heng Huat to grow on China’s briquette market

This is written by my colleague Muhammad Ahmad Hamdan.

KUALA LUMPUR: Heng Huat Resources Group Bhd, which debuted on the ACE Market of Bursa Malaysia yesterday, is banking on the robust briquette demand from China to help it achieve a 10 per cent increase in revenue by year-end.

Co-founder and managing director H’ng Choon Seng said Heng Huat’s oil palm and coconut biomass, which is processed into briquette, is seeing growing shipments into the energy hungry republic.

China’s growth potential for alternative energy sources is apparent in areas where environmental issues are increasingly coming to the fore.

“The higher environmental awareness globally has led to increasing government laws to curb air pollution and usage of depleting fossil fuels, such as the recent ban on new coal-fired plants in several cities throughout China.

“These developments are likely to spur greater demand for cleaner and renewable energy sources such as palm biomass briquette,” H’ng told a press conference after the company’s listing ceremony, here, yesterday.

Heng Huat saw revenue rising to RM21.3 million in the first quarter ended March 2014, from RM16.1 million a year ago on significant export sales to China, which contributed 50 per cent of the revenue.

H’ng said the company, which has 10 intermediate companies in China, will set up a subsidiary in southern China to support its operations there.

Heng Huat raised RM20.93 million from the listing exercise, of which RM4 million would be used for capital expenditure, RM4.55 million for working capital and the remaining RM9.38 million and RM3 million for the repayment of bank borrowings and listing expenses, respectively.

Out of the RM4 million capital expenditure allocation, RM3.20 million will be for factory expansion and upgrade, situated at the mainland of Penang.

The company operates two coconut fibre production lines, 20 oil palm empty fruit bunches fibre production lines, two briquette production lines and three coconut fibre sheet production lines.

Yesterday, Heng Huat opened at 61 sen, a premium of 16 sen above its offer price of 45 sen.

Palm oil vitamin E good for skin health

Ontario TV viewers recently learned how vitamin E tocotrienols extracted from Malaysian red palm fruit oil may soothe their dry, scaly and itchy winter skin.

Holistic pharmacist Sherry Torkos stopped by the CHCH Morning Live studio to explain that frying, sautéing or even baking with this heat-stable oil may help you “get some benefits of the positive fatty acids.”

She added that palm oil, which is rich in vitamin E tocotrienols, is also available in soft gels.

Torkos believes regular tocotrienol supplementation helps with body cell hydration, fights UV deterioration and free radical damage that can lead to premature aging. 

When we consume these powerful healing anti-oxidants we get to experience slowdown in skin aging from the inside out. So, this is a simple change we can make from a lifestyle perspective to improve our skin health, from what we eat and drink.

Another side benefit worthwhile to look out for is that tocotrienols may also improve heart-and brain-health.

Hey beautiful! How are you?

Malaysian red palm oil may be a secret to flawless skin, exclaims Hollywood celebrity skin expert Scott-Vincent Borba. During a Good Morning, San Diego! interview, Borba explained that beautiful skin starts from within.

His reasons for loving Malaysian red palm oil — “I’ve tried everything!” — is simple.

Wrinkles, sags, and age spots are outward signs of internal inflammation. Triggers include environmental toxins, a diet high in refined and sugary carbohydrates, sun exposure, hormonal changes, stress, smoking and excessive alcohol consumption. 

The solution begins with an anti-inflammatory diet. Key anti-oxidants — such as the palm oil vitamin E tocotrienols — can be a powerful beauty arsenal.

Red palm oil’s high smoke point allows it to be versatile. You can use palm oil to bake, stir-fry and even drizzle it in your salad with balsamic vinegar.

“Red palm oil actually helps with anti-aging, your skin texture and tone. You’ll actually get a glow within a couple of weeks of using this product. It’s awesome.”

The Cooking Your Way to Gorgeous author dishes out his recipes for a healthier, beautiful you.

Rich in antioxidants such as the full range of vitamin E of tocotrienols and tocopherols, and vitamin A’s beta carotene, Borba believes Malaysian red palm oil can replace olive oil in your kitchen.

What you put in your body is actually good for you outwardly, too. As the vitamin E anti-oxidant in the cooking oil called tocotrienols work to counteract inflammation processes in your body, it will lead to better cell regeneration and moisture retention. 

Take it from Borba and stir-fry your meals with spoonfuls of red palm oil. In time, your natural beauty will shine from the inside out.

Mapa appeals to govt to replace monopoly bodies

KUALA LUMPUR: Malayan Agricultural Producers Association (Mapa) appeals to the government to replace monopoly bodies such as Fomema Sdn Bhd with a more economically competitive system of medical examination, of which employers can directly pay their foreign workers’ doctors.

“From an economic standpoint, it would be more prudent to allow open competition of supply and demand to determine the rate of medical examination fees,” said Mapa president Tan Sri Mohd Noor Ismail.

“Furthermore, the monitoring of health matters concerning all workers should be vested directly with the Health Ministry and not by a consortium company,” he told Business Times after chairing Mapa’s annual general meeting, here, yesterday.

Fomema was established in 1997 to manage and operate a mandatory foreign worker health screening system in Peninsular Malaysia. It does not conduct the medical checks but farms it out to private clinics and takes a cut on the charges.

By its own estimate, Fomema makes at least a RM45 million profit a year — a RM25 service charge and RM5 for issuing a computerised certificate for each of the 1.5 million legal migrant workers every year.

It was reported that Fomema has been using the same fee structure since its inception. It charges RM180 to arrange medical screening for every male worker and RM190 for every female worker. The additional RM10 is for a pregnancy test that all female workers must take.

Out of the RM180, RM60 is for the doctor’s consultation, RM65 for urine and blood tests and RM25 for X-ray. That works out to RM150 each.

Mohd Noor also noted that a new consortium firm, namely the Foreign Workers Centralised Management System (FWCMS), will place tremendous financial burden on farmers, rubber smallholders and oil palm planters. 

It is purportedly set up for the implementation of medical examination of workers in the source country and for the visa with reference, or VDR, online application.

“This kind of consortium company would not be established for free. Further financial burden is going to be imposed upon our members. We fear this move would further increase cost of agricultural production without any real improvement in productivity,” Mohd Noor said.

“As of todate, we’ve not been not informed by the government if FWCMS is a one-stop centre for matters concerning foreign labour affairs,” he added.

Is this reporter "taking sides"? Is he bias?

July 19, 2014 5 comments

Three years ago, at Washington, DC, USA, Bryan Thompson, a 14-year-old student at Colonial Forge High School was suspended for running onto the field during a school football game — wearing a banana outfit.

Thompson was interviewed by WRC reporter Pat Collins (watch the video, above). Thompson wore the infamous banana outfit. Collins, not to be outdone, dressed like a grape, in a not-so-subtle attempt to make the point that Thompson was doing nothing wrong.

“It starts with a banana,” Collins said in his report. “Then all of a sudden you have an apple, and an orange, and then maybe a grape, and before you know it, you have fruit salad in the schools. We can’t have that.”

Students who protested Thompson’s 10-day suspension were given detention. 

Faced with an onslaught of criticism — from reports like this one, as well as advocacy groups like the ACLU, school principal Karen Spillman resigned. All the suspensions were subsequently lifted.

Now, you might ask what has this got to do with oil palm planters and palm oil companies? 

Well, it’s about “taking sides” in speaking out against injustice and trade oppression oil palm investors and palm oil exporters face. 

Is it ever right for mainstream media reporters to be vilified and branded as bias for “taking sides” with oil palm planters when they lay down the facts on the double standards definition of “forest destruction” between that of tropical Asia and western countries’ pine forest?

Even some oil palm planters, who are so used to being relegated the whipping boy of modern agriculture, exclaim in relief “that reporter is on our side, she’s on our side.” 

Sadly, some plantation companies which are bullied into wounded silence, forget they have every right to a very basic expectation … insightful reporting from ALL journalists, commentators or market observers.

It’s time for oil palm planters to step up to the plate in better communicating their contribution to the economy. Employees of plantation companies must learn to be comfortable with their show-and-tell skills and think on their feet. These “soft” skills are a necessity as Malaysia’s economy shifts into a knowledge-based one. 

It’s time for decision makers of the palm oil industry to expect higher standards of journalism from editors in uncovering the truth on insidious trade barriers and the nasty implications on Malaysia’s economy. After all, journalism has always been the last bastion of justice when other avenues fail. 

Is the planting of oil palms anymore polluting than rainforest? Ladies and gentlemen, let’s use our common sense.

Rainforest has more variety of big animals living there, right? Animals, trees and plants in the forest die from old age and diseases. So when termites feast on dead trees and maggots eat up dead animals, they emit carbon dioxide, yes? 

So, logically, one can conclude that estates planted with young oil palms actually produce more oxygen and absorb more carbon dioxide than old rainforest.

If saturated fats is bad for health, why do the same people who demonise palm oil advocate fish oil supplements, butter and cheese which certainly have higher content of saturated fats?

If oil palm planters think the current situation is just a straightforward trade rivalry with rapeseed, soybean and sunflower farmers …. think again. Take a few steps back and try and see the bigger picture. I leave you with the wise words of Albert Einstein.

Courage under fire

July 5, 2014 4 comments

Courage under fire means being able to remain calm and doing the right things when most people would panic.

Many corporate and government agency leaders like to think they have courage – few actually do.

Courage should not be mistaken for reckless bravado or dismissive arrogance.

Courage is actually having the conviction to inspire people to do what’s right (and usually, difficult) rather than what’s popular and easy. 

It is choosing between doing the right thing (potentially risking yourself jobless and your family to unpopular backlash) versus turning a blind eye to a situation in order to “play it safe.”

Courage is necessary in leading one to do the right things in life. People are more likely to follow a leader  who asks of them to sacrifice time away from loved ones and struggle against adversities  when he or she is willing to do the same.

In my many years of interaction with people in Malaysia’s palm oil industry as a reporter, I’ve noticed a pattern or two. Here’s my summation of how courageous leadership is demonstrated. 

It takes the form of necessarily venturing into the unknown to seek business growth opportunities, working in collaboration (not isolation), cutting losses, being decisive in making tough choices, listening rather than speaking, admitting faults, forgiving faults of others, not allowing failure to dampen one’s resolve to succeed and practising ethics in furtherance of good governance.

Courage is teachable and learnable – proof of this are in the moments we step up to the challenge and overcome our fears. 

I totally agree with Marilyn Monroe that fear is stupid and so are regrets. 

Courage makes us faithful, whereas the lack of it makes us fearful. Whether we look back on our personal experience or people around us, it is always better to stand for courage than regret failing to do so. 

Courage should not be defined as the absence of fear – it is stupid to assume brave people have no fears.

Courage is actually finding the strength to move ahead in the presence of fear.

In short, courage isn’t exclusive to the few. Courage is shown in everyday decisions.

We’re remembered for the decisions we make or don’t make. We’re acknowledged for the courage we display or fail to exercise.

There are great rewards for those who choose the path of courage. This is because courage will give one the humility to accept bravery in others rather than stifle it. 

True leaders who consistently demonstrate courage will stand apart from the masses. They earn the trust and loyalty of those whom they lead.

Leadership always begins with one courageous act – make that calculated decision. Ladies and gentlemen of the palm oil industry, will you be brave enough to do what is right for the common good?

From ‘dirty’ gas to clean energy

Sludge from palm oil mill, when left idle, emit dirty gases like methane. Plantation companies tell OOI TEE CHING how they use green technology, in the form of biogas plants, to turn these agricultural waste to fuel up their mills and light up community houses and schools in their estates. 

PALM oil millers in Malaysia are leading the way in “greening” the palm oil supply chain by capturing greenhouse gas before it enters the atmosphere and turning it into green energy and organic fertiliser. 

Millers capture greenhouse gas from the sludge and turn it into renewable energy by investing in biogas plants. These anaerobic digesters behave like our stomach, containing friendly bacteria that feed on organic matter to produce flammable gas called methane and digestate that can be turned into fertiliser.

In an interview with Business Times, Sime Darby Plantation Sdn Bhd managing director Datuk Franki Anthony Dass noted his company’s involvement in biogas plants has gained momentum in recent years because this environmentally-friendly initiative of stemming greenhouse gas emissions has its socio-economic benefits, too.

Apart from producing renewable electricity, the biogas anaerobic digestion process also converts environmentally polluting sludge into organic fertiliser that can be used to increase the yield of planted crops. 

By running a large combined steam and power generator, a palm oil mill becomes a self-sustaining powerhouse lighting up the houses, places of worships, schools and sporting facility in the estate, Franki explained.

Planters get to reduce their reliance on fossil fuels and any surplus electricity can be sold to Tenaga Nasional Bhd (TNB) if the mill happens to be located near the power grid, he added.

Sime Darby has, so far, put up two biogas plants in Peninsular Malaysia. In working towards reducing its operation’s carbon footprint, the group aims to have 18 mills installed with methane capturing facility by 2020. 

Palm oil clients from developed nations, like the EU, are happy to learn of the green movement among oil palm estates to capture and recycle these greenhouse gas into good use. This effort adds value to the notion that palm biodiesel is responsibly produced with environmental protection in mind.

If palm oil mills are located near TNB’s grid and they have excess electricity to sell to the government, they can bid for the renewable energy quota laid out by government agency Sustainable Energy Development Authority (Seda).

An agency under the Energy, Green Technology and Water Ministry, Seda facilitates supply and renewable energy usage in Malaysia via feed-in tariff (FiT). This mechanism guarantees renewable energy producers a premium selling price over that generated from depleting and finite sources such as oil, gas and coal. 

Seda divides the renewable energy fund – among biogas, biomass, small hydro and solar photovoltaic – on a quota basis. Todate, biomass and biogas projects are allocated 222MW or only 37 per cent of the total 601MW renewable energy quota. 

Oil palm biogas plant operators, which had successfully bid for the renewable energy quota and accorded licences by Seda receive 32 sen per kWh under the feed-in tariff (FiT) when they hook up to the national grid. If they had leverage on home grown technology, use agricultural waste and efficient gas technology they would receive bonus incentives of 5 sen per KWh, 8 sen per KWh and 2 sen per KWh, respectively.

At the current FiT for qualified biogas plant operator, one can only expect minimal returns after 10 years. Franki said a more targetted package of government incentives could spur more palm oil millers to invest in waste-to-energy projects and help reinforce the notion that oil palm planting is a sustainable practice that balances the needs of People, Planet and Profits.

BELL Group, the pioneer among palm oil millers in installing biogas power plants, concurred with Sime Darby that energy recovery from waste is ultimately a waste management issue and not just a green power plant activity. 

BELL Group chief executive officer Puan Sri Liana Low noted the onus and cost of connecting biogas plants to TNB’s grid lie with palm oil millers. It can be very costly if the mill is located a few kilometres away from the power grid.

She suggests the cost of laying the cable be shared between TNB and renewable energy producers. “Apart from the formidable cost of cabling up, there is also the logistical and technical challenge if there is a fault or sabotage of the connecting cable. This burden is too taxing on palm oil millers.”

She urges the government to consider revising the nation’s electrification master plan. One can look to Indonesia where the authorities have facilitated isolated grids that are close to several biogas and biomass power plants for the benefit of rural communities. “A joint study between the World Bank and the Indonesian government showed installation of isolated grids proved to be cost effective in rural and island electrification.”

It is common knowledge that solar only thrives on a few hours of intense sunlight while biogas power plants are able to run 24 hours a day, seven days a week. At current technology, solar conversion to electricity efficiency is only around 15 per cent while for biogas, it is close to 60 per cent. That means the conversion of biogas to electricity is four times more efficient than sunlight to power.

There had been reports that the government’s allocation of renewable energy quota to the solar sector is seen to be inefficient use of the renewable energy fund. Also, compared to biogas investments, the solar sector is highly dependent on foreign technology and imports. 

Given the relatively limited FiT budget, which is funded by a 1.6 per cent levy on electricity bills of heavy users in Peninsular Malaysia and Sabah, it would a step in the right direction for Seda to further fine-tune its incentives to spur more participation from the biogas sector.

Current first generation biogas plants take about a month to generate a reasonable amount of biomethane. Going forward, Low highlighted that biotechnologists and engineers are seen working on second generation know-how that could speed up the digestion by 10 times to just three days.

Separately, Kuala Lumpur Kepong Bhd (KLK) executive director Roy Lim Kiam Chye concurred that Seda’s FiT for qualified biogas plant should take into consideration the high investment and maintenance cost millers have to shoulder.

“The current package of tariffs for biogas plant operators of 42 sen per KWh, which include bonus incentives for agricultural waste management and engine efficiency, is still too low. It has got to be higher as biogas plants doubles up as a carbon emission savings initiative,” he said.

“This year’s 25MW quota allocated to biomass and biogas operators, or 39 per cent of total 65MW renewable energy quota is actually not enough. If a higher quota allocation is accorded to biogas plant operators, it can also help light up more energy-starved places in Sabah,” he added. 

“It would be to the government’s interest to further incentivise and widen the renewable energy quota to biogas plant operators. Apart from its relatively high energy conversion efficiency that makes payment from the renewable energy fund worthwhile, palm oil millers’ investment in this biotechnology initiative leads to cleaner air and creation of more high-skilled jobs,” Lim said.

KLK has, so far, installed a biogas plant in Sabah. By 2020, it aims to put up three more at its estates in Peninsular Malaysia.

Not all 368 palm oil mills throughout Peninsular Malaysia and Sabah can benefit from Seda’s FiT because many are located far away from the national power grid and the cost to connect is just not commercially viable.

Going forward, Lim noted there is still much potential in biogas because millers can leverage on local know-how to purify biomethane and sell them as compressed natural gas to industrial users such as oleochemical producers or as transport fuel for taxis and express buses. There is also the possibility of compressing the methane into cooking gas tanks for household use in remote areas.

Felda Global Ventures Holdings Bhd (FGV) group president and chief executive officer Mohd Emir Mavani Abdullah said the group has, so far, put up 13 biogas plants at its estates. 

“By 2020, we aim to push this figure to 51. As the world’s largest crude palm oil producer, we’re committed to reducing our carbon footprint and improving our environmental friendly practices for the benefit of our community.”

He highlighted FGV’s biogas facility at Umas palm oil mill in Tawau, Sabah is now generating 1MW for a rural electrification. Settlers, commercial entities and staff quarters are benefiting from this effort. 

Over at Lahad Datu, FGV’s biogas plant at Mercu Puspita mill is also generating 1MW for use by residents at Bandar Cenderawasih township.

In theory, biogas plant operators is accorded a maximum FiT incentives of up to 47 sen per KWh. In practice, however, FGV’s Mavani concurred with KLK’s Lim that biogas plant operators can only achieve 42 sen per KWh. “We’re not able to benefit from the 5 sen per KWh incentive for homegrown technology because currently there are no local gas turbines manufacturers we can source from. We’ve no choice but to import them from Germany and Spain,” he said.