Palm oil Poland: trends & market Marcin Troniarz 18/09/2015

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IOI Loders Croklaan

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IOI Group’s controlled integrated supply chain

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• The largest

vegetable oil based

Asian oleochemical

manufacturer

• Combined refining

capacity > 750,000

MT

• Global distribution

• 250.000 hectares

• 14 mills with >4

million MT capacity.

12 RSPO certified

• Enhanced

agronomy R&D and

yield management.

Plantations

Oleochemical

• RM 12.6 billion

revenue in 2014

• Listed on Bursa

Malaysia stock

market

• 30.000 employees

IOI Group

• Specialist &

leading player in

tropical oils

• Expert in

commodities and

specialties

• 3 million MT

refining capacity

IOI Loders Croklaan

IOI Loders Croklaan’s capabilities

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o We are a downstream processing division of IOI Group

IOI Group one of the world’s largest integrated palm oil producers

o We develop specialty oils & fats primarily for the food industry

o Ranging from bakery to confectionary to infant nutrition

o Our focus is creating tailored offerings for customers together with customers

o We leverage our responsible supply chain with operating excellence

o All of this is complimented by our R&D and application leadership

Achievements and Milestones

o Established in 1890 (UK)

o Invented CBE’s and OPO

o Leading the trans fat elimination

o CO-Founded the RSPO

o Regional Creative Studios

Expertise built on rich experience

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At home in all segments, leveraging expertise

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Confectionery Bakery Spreads Culinary Infant

Nutrition Non

Foods Frying Dairy

Palm oil: The key to trans free fat

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Palm oil consumption in Poland

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o Mainly imported via Germany & The Netherlands

o Uptake of refined palm oil is driven by different factors, including local food consumption and increased production for retailers in Western Europe

o Increased interest in TFA-free solutions drives palm oil usage

*Source: Eurostat

Trends in the Polish market

o Existing products and new introductions are

becoming more premium due to changing demand

in local consumption and export markets

o As a leading producer of retailer brands for the

European market, the Polish market is picking up

trends at a high pace

o Health and nutritional values are primary drivers for

the changes in the market

o Premiumisation is seen in type of ingredients used:

• Natural & sustainable

• Higher quality perception, eg. from CBR to CBE

• Highly functional products, eg. anti-bloom and

quick/clean melting specialty fats

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Health & the removal of trans fats

o TFA: Strong correlation with the

development of coronary heart

disease

o TFA: Via partial hydrogenation of

vegetable oils

o TFA: Highly functional: stable and

fast processing

o EFSA recommends: intake should

be as low as possible

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Great efforts to remove trans fats from our diet

o Consumption has been reduced significantly over the years

o According 2011 publication* average consumption in Poland (2.8 - 6.9

grams/day) was still too high

o Target: <2 grams/day

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*J. Karbowska, Z. Kochan: Trans fatty acids, effects on coronary heart disease

Palm oil: the key in functionality for good food

o Fatty acid composition provides specific

functionality

o Production of high quality foods at

required processing performance

o Similar end products require similar

amounts or behavior of the fatty acids

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Palm oil: the key to zero-trans products

o The natural composition is able to match the performance and eating properties

of trans fat in our favorite products

o This contributes to delivering the targets stated by EFSA and other health

authorities: less than 2 gr of trans fat a day/less than 1% of daily energy

o Palm oil is the only source of vegetable fat that is abundant in supply, able to

tackle the trans fat challenge on a EU and even a global level

o This value is delivered at price levels that enable manufacturers to improve food

composition without increasing consumer prices

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Sustainable palm oil: the key to the future

o Sustainable palm oil rapidly becoming market standard in Europe

o Transformation in W-Europe in full swing, E-Europe now picking up

o Sustainable palm oil enables the use of functional benefits while strengthening

the brand image of manufacturers

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IOI Loders Croklaan: Taking Responsibility Fully committed to drive sustainability and provide healthier alternatives

Our vision and commitments

•IOI Group and IOI Loders Croklaan are committed to the RSPO Principles & Criteria, and our Sustainable Palm Oil Policy

•We are guided by our Responsible Operating Principles

•We are committed to our traceability program

•We are committed to increasing the amount of RSPO certified sustainable Palm we process in our factories.

•Our focus on natural processes results in the removal of trans fats an the lowering of saturated fat in consumer products.

Taking responsibility Front runner in sustainable palm oil

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Proof points

•IOI Group as a main supplier is fully RSPO and ISCC certified for all its mills (excluding newly acquired Unico).

•Co-founder of RSPO and seat in the RSPO Board.

•In 2014 IOI Loders Croklaan Europe has sold 53% of its volumes as certified sustainable.

•Current traceability level on palm is 94%

•First to import RSPO-SG palm in 2011.

•Biggest supplier of RSPO-SG palm fractions in Europe

•Positive shea assessments by RFA in 2011 and 2014

We offer:

•Access to knowledge and expertise

•Priority in allocating certified sustainable material

•Affordable sustainable products

Our expectation for the Polish market

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o Continued (and growing) role as food producer for the European market

o Continued premiumisation

o Continued adaptation of nutritional profiles, leading to a removal of trans fats

from the diet

o Accelerated uptake of sustainable palm oil, paving the way in Eastern Europe

o Growth of consumers awareness

o Growth of retailers impacting new trends

To summarize

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o Palm oil is a key ingredient for the production of high quality foods

o Use of sustainable palm oil in Poland will be growing and at higher pace

o Polish market is picking up trends at high speed

o Interest in TFA-free, non-hydro solutions is growing rapidly in C&EE

o Palm oil enables the removal of trans and hydrogenated fats

o Premumisation & higher customer awareness

o Sustainable palm oil will become a standard in Europe

o Companies like IOI Loders Croklaan are a right partner in this rapidly changing

market with solutions readily available

Let’s create together Thank you

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