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  • Anetta Nowak, Sime Darby R&D Innovation Centre Europe

    MPOC symposium September 2015

    Sime Darby: Sustainability as basis for entrusted Quality Palm Fruit Oils

  • 2

    Sime Darby: Centuries of Heritage

    Kumpulan Guthrie was founded in Singapore in 1821 by Alexander Guthrie as the first British trading company in South East Asia and one that introduced rubber and oil palm in Malaysia Golden Hope Plantations, previously named Harrisons & Crosfield when founded in 1844, was a major oil palm plantation player in Malaysia Kumpulan Sime Darby, founded in 1910 by British businessmen William Sime and Henry Darby, and grew into a diversified multinational. In 2007 all three companies merged to form the new Sime Darby Berhad.

  • 3

    Sime Darby focuses on 6 core businesses…

    Plantation Property

    Industrial Motor Energy & Utilities Healthcare

  • 4

    …with operations in over 20 countries

    Malaysia

    Indonesia

    Singapore

    Japan

    China

    The Netherlands

    South Africa

    Australia

    New Zealand

    Canada

    Liberia

    United States

    Qatar

    Germany

    United Kingdom

    Maldives

    Thailand Vietnam

    South Korea

    New Caledonia

    Solomon Islands

    Nauru

    Papua New Guinea

  • 5

    Palm Oil

    Palm Kernel Oil

    Palm fruit oils are key food ingredients

  • 6

    Palm fruits oil: clean(est) edible oils from nature

    • No natural trans fats and erucic acid

    • No hexane used

    • PAH-4 low

    • Non GMO Palm oil

    Palm kernel oil

    Hexane Pesticides Polycyclic Aromatic Hydrocarbons (PAH)

    Soybean oil High Medium Medium

    Sunflower oil Medium High High

    Rapeseed oil Medium Medium Medium

    Corn oil Low Medium Medium

    Palm oil Absent Low Low

    Palm kernel oil Absent Low Low

    Coconut oil Absent Low Very High

    Source: www.fediol.org

    Risk assessment matrix crude vegetable oils contaminants

  • 7

    E133

    BHA

    E621

    E124 Climate change

    Puzzled consumer

    Chemicals deforestation

    Environmental Impact Social Impact

    pesticides

    Local communities

    Smallholders

    ALL AGRICULTURAL PRODUCTS HAS ENVIRONMENTAL AND SOCIAL IMPACTS IN PRODUCTION, BUT CAN BE PRODUCED IN A SUSTAINABLE MANNER

  • 8

    Palm is one of the most efficient crops

    Palm produces up to 10 times more oil per hectare compared to other major vegetable oils

    Source: Oil World 2013

    Hectarage Area under Cultivation in 2012

    (Total =258.9 mil hectares)

    Volume (MT) Global Production in 2012 (Total =186.4 mil tonnes)

  • 9

    The Palm Footprint is very small Compared to Other Agricultural Products

    32%

    68%

    Global Area Under Agriculture

    Crop Planting

    Livestock Pasture Other Crops

    34%

    Vegetable Oil 18%

    Cereals 46%

    Fibre Crops 2%

    Agricultural Area Crop Planting

    4911.6

    million ha

    1552.9

    million ha

    16.6 million ha Planted with Oil Palm

    Globally

    0.3% of Global Agricultural Area

    1.1% of Global Cropland

    Source: Analysis of FAO Statistics 2011

  • 10

    Oil Palm agriculture has proven to be a Major Driver of Economic Development

     Approx. 36% world palm oil production Approx. 29% of world exports.

     Contributes around 5% to 7% of GDP

     Exports revenue 2009 – RM 50 billion 2013 – RM 80 billion Avg. 10% to total export revenue

     The sector also provides

    ~500,000 employment opportunities

     National Key Economic Area: targets to generate RM178 billion in gross national income by 2020.

     Approx. 53% world palm oil production Approx. 44% of world exports.

     Food and estate crops contributed around 9% of GDP in 2013

     Exports revenue of USD19 bil in 2013; Avg. 10.4% to total export revenue.

     An estimated 3.7 million people are believed to be employed in the palm oil industry in Indonesia.

    Source: International Institute of Sustainable Development, The Star, Department of Statistics, Malaysia, Pemandu

    Source: Indonesia investments, Statistics Indonesia, International Institute of Sustainable Development, Schuster Institute for Investigative Journalism, Bank Indonesia

    Malaysia Indonesia

  • 11

    Yield is key for sustainability Sime Darby’s unique palm genome science

    5

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    1 2 3 4 5 6 7 8 9 10 11

    O il

    Y ie

    ld (

    t/ H

    a /

    y )

    11.9 t/Ha

    TAG assembly, glycolysis, lipid bodies, energy, carbon sources

    Mesocarp size: amino acids, nucleosides, hormones, cell division, nutrients ??

    Bunch number - ?

    Physically limited to ~90% dry

    weight

    When will we see source limitation?

    High Yield

    Architecture limits?

    Max Yield Theoretical

    Other factors??

    ~18.2 t/Ha

    5.6 t/Ha

    Low yield

    Lipid biosynthesis

    (O/M)

    Fruit characteristics

    (Mesocarp size)

    Bunch production

    (Bno)

  • 12

    Sime Darby’s Total Value Chain Strategy

    Good Agricultural Practices, minimize environmental impact of plantations, animal feed applications of side-streams and biofuels

    New generations

    Biofuels

    Biobased chemicals and nutritional

    ingredients

    1965 - today 2015-2020 2015-2030

    Available today

    Since 1965 Sime Darby’s developed, implemented and commercialized technologies to achieve maximum use of palm fruit agriculture

  • 13

    1985 Introduced

    zero burning

    1990 Biological

    control for IPM

    1994 EMS-ISO 14001

    2002 POME

    utilisation as compost

    Largest producer of certified sustainable

    palm oil, leading total sustainable production, food safety, CSR, and

    GHG reduction.

    1992 Elected to UNEP

    Global 500 Roll of Honour for

    commercialisation of zero burning

    practice

    2002 Founding member of RSPO

    2008 Achieved

    RSPO certification

    2004 First

    GlobalGAP certification

    2010 First

    certification of SCCS and

    ISCC

    Sime Darby Plantation is a leader in plantation sustainability

     Pioneered the Zero Burning Policy in 1985. One of the founding members of RSPO.  Largest producer of CSPO: Malaysia 100%, PNG 100% & Indonesia 96% certified. No development of primary and virgin forest. No new development on peatlands. No development of high carbon stock areas, once defined.  Committed to Environmental and Social Principles – HCV & FPIC

    Acquisition of New Britain

    Palm Oil

    Sime Darby’s Sustainability Journey

    Beyond 2015 Spearheading study on High

    Carbon Stock forest and thresholds

    2012

    2015

  • 14

    Corporate Responsibility & Our Sustainable Practices

    Stability of Altered Forest Ecosystems (SAFE) Project in Sabah, Malaysia

    Sime Darby FC - Currently in the 2nd tier of the Malaysian Football League

    Sime Darby has committed funding of more than RM 90 million over a period of 10 years for Corporate Responsibility activities.

    Sime Darby actively supports sports such as lawn bowls

    Sime Darby’s Gender Policy looks after the wellbeing of its plantation workers

    Participants at Sime Darby’s Gender Policy workshop, in teambuilding activities

    Sime Darby’s Mangrove Research Centre is dedicated to mangrove conservation

    One of Sime Darby’s HUMANA schools in Ladang Binuang for children of foreign workers

    These children receive their education at one of Sime Darby’s HUMANA schools

    e. Rehabilitation of Orang Utan habitat in Ulu Segama Sabah

    f. Protecting and preserving the biodiversity of Tabin Wildlife Reserve, Sabah

    Protecting Endangered Species No-deforesting and Restoring

    Plant Biodiversity Community Engagement Efforts

    a. Rehabilitation of Orang Utan habitat in Ulu Segama Sabah. b. Wild tree species being raised in a nursery.

    c. Reaching out to the less fortunate at an Aidilfitri celebration. d. Scholars attending an awards ceremony with the Sime Darby Management.

    a b c d

    e f

  • 15

    Some Sustainability Practices Implemented

    Good Water Management Ground Cover Crops for Soil and Moisture Conservation

    Excellent Plantation Management Practices

    Best Mill Practices

    Balanced Age Profile Through New &

    Replanting Exercise

    Integrated Pest Management

    Zero Burning Replanting Technique

    Palm oil mill effluent (POME) Treatment

    As an industry leader