The Supply Chain of the Palm Oil Industry in Malaysia

6.1 Introduction

The major players in the palm oil industry in Malaysia are shown in Figure 7; the players are grouped under the following clusters:

• Upstream producers – essentially involved in the cultivation of oil palm, production of fresh fruit bunches (FFB) and processing them into crude palm oil and palm kernel.

• Downstream producers – palm oil refiners, palm kernel crushers, manufacture of palm-based edible products and specialty oils and fats,

• Exporters and Importers of palm oil

• Customers - institutional buyers and retail customers and investors

• Industry organisations representing the interests of the upstream and downstream producers

• Government agencies associated with the oil palm industry, particularly in respect of research and development and regulatory functions.

• Other players who have an interest and/or stake in the oil palm industry (NGOs, unions etc)

Profiles of the major players is given in Part B of the report; the write-up of industry organisations and Government agencies is covered on the following headings:

• Introduction

• Vision / Mission

• Role and Function

• Organisation

• Funding

• Activities

• Contact Information

The profile of the major plantation companies is presented as a 2-page fact sheet, covering the following aspects:

• Background of the company

• Corporate information

• Triple bottom line dimensions

  - Economic aspects

  - Environmental aspects

  - Social aspects

  - Stakeholder engagement

• Crop area statement

• Oil palm crop productivity and production (5-year record)

• Financial performance (5-year record)

The profiles of organisations and companies are based on published or public domain information, the major reference source of being recent company annual reports, corporate web sites and press reports.

Figure 7 Major players in the palm oil supply chain in Malaysia

         

The characteristics and roles of the players within each cluster are discussed in the following sections.

6.2 Upstream Producers

6.2.1 Plantation Companies/Private Estates

Of the 3.38 million hectares of oil palm planted in Malaysia in 2000 (Table 11), 60% were under private ownership, most of which are by plantation companies. The private sector has been the main driver for growth in the development and production of palm oil in the last two decades. From 1980 to 2000, the planted area under plantation had increased by more than 3.6 times, from 557,659 hectares to 2,024,286 hectares, most of the new developments being in the states of Sabah and Sarawak.

Table 11: Distribution of Oil Palm Planted Area (Hectares)

	1980			1990			2000
	Hectares		%	Hectares		%	Hectares		%
Private Estates	557,659		52.1	912,131		44.9	2,024,286		60.0
Govt. Schemes:
FELDA	316,550		29.6	608,100		30.0	598,190		17.7
FELCRA	18,851		1.8	118,512		5.8	154,357		4.6
RISDA	20,472		1.9	32,582		1.6	37,011		1.1
State Schemes	67,281		8.0	174,456		8.6	242,002		7.1
Smallholders	70,446		6.6	183,683		9.1	320,818		9.5
TOTAL	1,051,259		100.0	2,029,464		100.0	3,376,664		100.0

Source: MPOB

The sizes of plantation companies vary considerably from a few hundred hectares to more than 100,000 hectares; the largest plantation companies are given in Table 12. Most of these companies are listed on the Main Board of the Kuala Lumpur Stock Exchange; Kuala Lumpur Kepong Berhad and Highlands & Lowlands Berhad are also listed on the London Stock Exchange while United Plantations is listed on the Copenhagen Stock Exchange. Based on planted areas, the largest plantation companies are Kumpulan Guthrie Berhad, Golden Hope Plantations Berhad, Kuala Lumpur Kepong Berhad, and IOI Corporation Berhad. The profiles of selected public listed companies are presented in Part B.

Besides size, plantation companies can be stratified according to their historical background, ownership and type of core business.

Historical perspective: The late 19^th century and early 20^th century saw the beginnings of many present day plantation companies in Malaysia. The pioneer planters were essentially Europeans and Chinese, the latter being credited for commercial planting of rubber through the establishment of a 17 ha estate near Batu Lintang in Melaka in 1896 by Tan Chay Yan (Tate, 1996). Companies that could trace their roots to the colonial era include Sime Darby Berhad which was founded by William Middleton Sime and Henry Darby in 1910. Kumpulan Guthrie Berhad’s history goes back to 1821 when Alexander Guthrie set up Guthrie & Co as a trading company and as agents for 12 British companies with plantations in the then Malaya. Golden Hope Plantations Berhad had its beginnings in Harrisons & Crosfield Plc which started as a

tea and coffee trading company in 1844 and as managing agents for UK-domiciled plantation companies from the early 1900s until their transfer of ownership to the present company in 1982. Kuala Lumpur Kepong Berhad also started as a UK domiciled company in 1906. Other European pioneers of Malaysian plantation companies include a

Dane, Aage Westenholz, who in 1906 established Jendarata Rubber Estate in Lower Perak which formed the foundation for present day United Plantations Berhad. A comprehensive account of the history of the plantation industry and its players for over a century is given in “The RGA history of the plantation industry in the Malay Peninsula” (Tate, 1966).

From the 1970s, several ‘home grown’ plantation companies entered the industry, some examples being Asiatic Development Berhad, Austral Enterprises Berhad, Hap Seng Consolidated Berhad, IOI Corporation Berhad, PPB Oil Palms Berhad , Tradewinds (M) Berhad and IJM Plantations Sdn Berhad.

Among the more recent players, IOI Corporation Berhad has demonstrated the most impressive growth, starting with zero base, with an initial acquisition of a 1,214 hectare estate in 1983. Through a series of acquisitions of established plantation

companies over a 20-period, IOI became a major plantation -based corporation with a total planted area of 100,954 hectares, of with 98% have been planted under oil palms (as at 30^th June, 2002). The acquisition of 27,880 ha from Dunlop Estates with 13 estates, 2 mills, 2 factories and a research station in 1990 was probably IOI’s most strategic thrust into plantations

Austral Enterprises Berhad’s (Austral) emergence as a major player was through the diversification strategy of its parent company, I & P Berhad, whose earlier core business was in property development. Austral spearheaded the commercial development in Sarawak and today has 14 estates covering a planted area of 31,588 hectares in the state, or 57% of the company’s total planted area of 55,267 hectares.

Asiatic Development Berhad (Asiatic) is another company that started from zero base, commencing business in April, 1980 with the acquisition of the Rubber Trust Group of 3 Hong Kong domiciled rubber companies with a total area of about 13,700 hectares of developed plantation land in Peninsular Malaysia. Through a series of acquisitions of plantation companies, had accumulated a sizeable land bank within a 20- year period, most of which is located in Sabah. Asiatic has a significant area under oil palm in the Kinabatangan District.

Hap Seng Consolidated Berhad (Hap Seng) and IJM Plantations Sdn Bhd are relatively new players with plantations located entirely in Sabah. Hap Seng’s plantations are mainly in the Kinabatangan District. IJM Plantations which was incorporated in 1985 is the Plantations Division of diversified group, IJM Corporation Berhad (IJM) . It has a total area of 19,914 hectares planted with oil palms in 14 estates near Sandakan, Sabah.

Prior to the entry of PPB Oil Palms Berhad into the plantations industry in the mid-1980s, its parent company, PPB Group had been involved in the trading and refining of palm oil with raw materials sourced from various plantation companies. The development of oil palm plantations in Sabah and Sarawak was taken as a logical step to synergise the Group’s refining and trading activities.

Tradewinds (M) Berhad is the plantations arm of hotels and property owner and operator, Pernas International Holdings Berhad. Incorporated in 1974, Tradewinds became a public company in 1987 and was listed on the KLSE in March 1998. The company has a planted area of about 50,000 hectares of oil palm; however, with the recent acquisitions of more than 64,000 hectares of forest land in Sarawak and Indonesia, Tradewinds has set its sights to be a major upstream player in the region in the near future.

Ownership

Ownership of plantation companies in Malaysia can be broadly grouped as follows:

•       Companies with substantial or controlling interests by Permodalan Nasional Berhad (PNB) or the National Equity Corporation and its unit trust funds

•       Non-PNB controlled companies, owned by Malaysian companies or individuals

•       Companies with substantial or controlling interests by foreign shareholders

PNB was established in March, 1978 as a wholly -owned subsidiary of Yayasan Pelaburan Bumiputra (Bumiputra Investment Foundation) as the Government’s investment vehicle for implementing the New Economic Policy (NEP) that was formulated in 1970.(See 4.8, page 44) As part of the process of Malaysianisation of the country’s assets, PNB negotiated with foreign -domicled plantation companies for a transfer of ownership to Malaysians in the late 1970s. Transition of ownership was generally smooth and amicable, at mutually agreed equity prices, except in the case of Kumpulan Guthrie Berhad which came under Malaysian ownership through a ‘dawn raid’ at the London Stock Exchange in 1981. In the case of Sime Darby Berhad, the transfer of controlling interests was done through Perbadnan Nasional Berhad (PERNAS). In 1979. Plantation companies that are currently under the control of PNB and its unit trust funds include:

Company	No of shares	% of total
Sime Darby Berhad	1,011,577,232	43.49
Golden Hope Plantations Berhad	548,235,998	53.01
Kumpulan Guthrie Berhad	732,376,000	73.2
Austral Enterprises Berhad*	60,065,555	41.3

* Through PNB’s 71.51% in Austral’s parent company

Large non-PNB plantation companies under Malaysian ownership include Kuala Lumpur Kepong Berhad, IOI Corporation Berhad, Hap Seng Consolidated Berhad and Asiatic Development Berhad and PPB Oil Palms Berhad. These companies are effectively controlled by holding companies which have their roots in family-owned companies.

A few companies have substantial or controlling foreign shareholding, notable examples being United Plantations Berhad with about 43% of its equity held by Danish shareholders and Pamol Plantations Sdn Bhd, which is Unilever’s plantation

interest in Malaysia. Unilever NV recently announced its intention to dispose all its plantations in Malaysia as part of its strategy to divest from non-core business. It has placed all its plantations in Peninsular Malaysia and Sabah covering a titled area of more than 21,700 hectares for bidding; the estimated worth being between RM 500 to RM 800 million. (News Straits Times, 18.09.02)

Core Business

Many plantation companies are considered ‘pure’ plantation companies. Although several of them have diversified into resource -based manufacturing and property development, converting their plantations near urban areas into real estates, their revenues and profits are generated mainly from plantation operations, especially from oil palm. However, some companies have gone down further the diversification path and have moved away from their plantation roots to become conglomerates with a variety of resource and non-resource based core businesses. The most notable example is Sime Darby Berhad which stated as an early pioneer in plantations in 1910; it is Malaysia’s own multinational conglomerate with core businesses in tyre manufacturing, motor vehicle assembly and distribution, property development in the energy sector, besides maintaining its presence in the plantations industry. However, the contribution from the plantations to the group’s earnings is not significant. The contribution from the Plantations Division for FY 2001 and 2000 were 6.6% and 13.8% respectively but this is not a true indication of the segment’s share as the Plantations Division itself has diverse business operations in commodity trading, refining, property development and medical services.

IJM Corporation Berhad is another diversified group with core businesses in plantations, construction (civil engineering) infrastructure (highways, airports, bridges etc), property development, manufacturing and quarrying and international ventures in construction and infrastructure development. The contribution of the Plantations Division to the Group’s operating revenue and profit before tax were 6.1% and 3.2% respectively.

Among the newer players, IOI Corporation Berhad has diverse operations in plantation, property development and investment, industrial gases, oleochemicals and leisure. For FY 2001 and 2002, non -plantations business contribute to 77% and 63% respectively to the Group’s profit before tax. With the recent acquisition of Loders Croklaan BV from Unilever, IOI has become a global producer and supplier for specialty oils and fats, with market access to Europe, North America and Latin America.

Plantation companies can be further differentiated by the location of their upstream activities as shown in Table 12. Owing to the availability of land and supply of workers, both at lower costs than in Malaysia, many companies have ventured into the development of oil palm plantations in Indonesia. However, except for Kumpulan Guthrie Berhad, actual areas developed by these companies are considerably lower than those cited by Wakker (2000); a good case in point is Golden Hope Plantations Berhad which has todate developed only 8.014 hectares of oil palm plantation in Kalimantan against the proposed area of 122,000 hectares. The political turmoil and economic uncertainty that followed after the Asian financial crisis in 1997 could have deterred the Malaysian companies from proceeding with their proposed developments in Indonesia. For example, Kuala Sidim Berhad, stated in its 1999 Annual Report that “future development will be confined to 1,000 hectares per year until the political and economic situation becomes more apparent.” but, as the situation remained uncertain, the Group announced in its 2000 and 2001 Annual Reports that further developments in Indonesia will be postponed until scoio -political stability returns. The exception is Kumpulan Guthrie which expanded its planted area in Indonesia by about 14 times with the acquisition of Holdiko Plantations (now renamed as Minamas Plantations) in 2001.

Based on reported trends in land acquisition and planned development, some companies can be expected to remain essentially upstream players, particularly Kumpulan Guthrie Berhad and Tradewinds(M) Berhad. With the acquisition of Minamas Plantations Kumpulan Guthrie has become the largest plantation company with a total land bank of more than 322,000 hectares. However, it should be appreciated that it is not entirely practical to classify plantation companies as either upstream or downstream players as many of them are both upstream and downstream operations. (See Table 13, page35)

6.2.2 Government Schemes

Federal Land Development Authority (Felda)

Among the public sector agencies, Felda (Profile GOV.1, page 110) has played the most significant role in the development of oil palm in Malaysia. In fact, it is the largest player in the industry in Malaysia, accounting for 17.7%² of the total planted area (Table 11) and about 20.6% of the palm oil produced in Malaysia in 2001. Felda was the main land development agency that was established in 1956 with the socio-economic mandate of developing forest land for the resettlement. From its formation until the mid-eighties, Felda’s primary activity was the development of agriculture-based settlements, planted with plantation crops, initially with rubber and subsequently with other crops, particularly oil palm from primary forests and logged over forest land. The first planting of oil palm was on 8,100 hectares in the Taib Andak Complex in Pahang, Peninsular Malaysia in 1961. It spread its activities to Sabah in the early 1980s and had developed complexes at Umas and Kalabakan near Tawau and the Sahabat complex in the Dent Peninsular, east of Lahad Datu (Tunku Shamsul & Lee,1980).

Following a change in the organisation’s strategy in the 1980s, Felda changed its focus to commercial development management of plantations on a commercial basis. The 1980s saw rapid expansion in the area developed of oil but there had been no significant new land developments by Felda in the last decade and the major activity has been replanting of the older schemes in Peninsular Malaysia. The total area replanted until 2000 was 117,676 hectares (Felda 2000 Annual Report).

Under the current organisational structure, the Felda Group consists of Felda which is responsible for the management of the schemes emplaced settlers and Felda Holdings Sdn Bhd which is the corporate arm for the group. As at 2000, Felda has emplaced 103,001 settlers in 275 schemes, of which 67% have been planted with oil palm. Felda is also responsible for settler activities, which include settler community development, new economic activities to enhance settler income and education.

Felda Holdings Sdn Bhd is the holding company for 36 wholly owned and associate companies which are divided into the Plantations Group, Palm Industries Group and Enterprises Group. In the Plantations Group, Through these companies, Felda is involved in most aspects of the supply chain of palm oil. It manages 258 plantations covering a total area of more than 354,000 hectares, the produce of which are process in 72 palm oil mills, 6 kernel crushing plants, 7 palm oil refineries to produce cooking oil and 2 margarine plants. It also has refinery operations in Egypt and China. Felda is involved the production of palm-based oleochemicals through a joint venture with Proctor & Gamble. Various subsidiary companies provide support service to the core businesses. The group produces its own planting materials, fertilisers and other agricultural inputs, it has its own research and agricultural, engineering and construction services, transportation and bulking installations. At the end of the chain, Felda has companies for trading and marketing of its products. With the vertical integration of its activities, Felda is essentially an upstream and downstream producer.

Although Felda was established with loans and grants from the Federal Government and international agencies such as the World Bank, it has been self-financing for many years since managing its agricultural operations on a commercial basis. Profits generated from companies under Felda Holdings Sdn Bhd has been ploughed abck to the settlers and Felda through their investment in the Felda Investment Co-operative (KPF) which owns 51% Felda Holdings Sdn Bhd.

Other Government Schemes

The contribution to the production of palm oil by other government land schemes such as the FELCRA Berhad, the Rubber Smallholders’ Development Authority (RISDA), Sabah Land Development Board (SLDB) and Sarawak Land Rehabilitation and Consolidation Authority (SALCRA) is less significant. Among these agencies, FELCRA accounted for 4.6% of the total planted oil palm area in Malaysia.

FELCRA was established under the National Land Rehabilitation and Consolidation Authority (Incorporation) Act 1966 to improve the productivity and livelihood of settlers not covered under Felda. In 1997 it was corporatised and changed its name to FELCRA Berhad to make it commercially oriented while maintaining its original mission for rural progress. It has adopted a business strategy of balancing and synergising social-economic and business activities through a two -prong approach –

a Social Development Programme that focuses on managing existing and sourcing of new areas for agricultural development and the Business-Oriented Programmes on upstream and downstream activities such as processing of palm oil and agro-industries.

RISDA was established in January 1993 under the Rubber Industry Smallholder Development Authority Act, under which RISDA was required to:

•       “Administer the Rubber Industry Replanting Fund which was established under Section 3 of the Rubber Industry (Replanting) Fund Ordinance 1952

•       Manage and implement Schemes approved under the provisions of the Rubber Industry (Replanting) Fund Ordinance 1952

•       Plan and implement all innovations for the smallholder sector”

Although RISDA’s original mandate was for rubber replanting and development on behalf of smallholders, its activities had been extended to include oil palm cultivation; in 2000, the area of oil palm schemes developed and managed by RISDA was 37,011 hectares or 1.1% of the national planted area.

6.2.3 Smallholders

While Felda, RISDA and FELCRA manage schemes for what is known as ‘organised smallholders’, individual smallholders account for about 320,818 hectares of oil palm or 9.5% of the total planted area. Under the RISDA Act 1972, a smallholder is defined as the owner of legal occupier of any land that is 100 acres (40.5 ha) in area. A census of smallholders undertaken in 1992 gave the following profile:

Smallholders
Total numbers:	420,193
Rubber smallholdings:	341,694
Oil palm smallholdings:	37,333
Other crops smallholdings:	41,166
Smallholdings
Total area:	1.289 million ha
Rubber area:	1.044 million ha
Average size:	3.05 hectare

                    Source: Information Malaysia 2000 Yearbook

The interests of individual smallholders are represented by the National Association of Smallholders (NASH).(See Profile OP.1, page 127)

6.3 Downstream Producers

Section 2 of this report included an overview of the wide range of food and non-food products that are produced from the oil palm fruit. The fresh fruit bunches (FFB) from the plantations are to a large extent, processed by the company’s own mills to produce crude palm oil (CPO) and palm kernel (PK). A number of companies have also integrated palm kernel crushing in the mill complex to produce crude palm kernel oil (CPKO). The CPO and CPKO are refined and fractionated to produce a variety of edible oils and fats and non-food applications. Refined palm olein is usually used for producing cooking oils while palm kernel olein is the main feedstock for the production of oleochemicals.

Downstream producers can broadly grouped under plantation-based companies, Felda, independent manufacturing companies and subsidiaries or associates of multinational companies Plantation companies are involved in the downstream processing activities as shown in Table 13. Besides being the largest upstream producer, Felda is a major player in downstream processing, operating seven palm oil refineries, six kernel crushing plants and two margarine plants.

The Malaysia Palm Oil Directory 2002 (MPOPC, 2002) listed 44 companies involved in palm kernel crushing, majority of them are essentially SME scale operators who supply their CPKO to the refining companies or oleochemical producers. There are more than 55 palm oil refining companies in Malaysia (MPOPC, 2002), of which about 18 companies produce more than 75% of the total export of processed palm oil. The largest players are PGEO Edible Oils Sdn Bhd., Ngo Chew Hong Oils & Fats (M) Sdn Bhd, and Pan-Century Edible Oils Sdn Bhd. PGEO Edible Oils is an associate company of PPB Oil Palms Berhad while Ngo Chew Hong is an independent refiner which is also a major manufacturer of palm-based oils and fats. Pan-Century is the subsidiary company of the Birla Group of India.

Major producers of bulk and retail pack cooking oil and palm oil-based products such as shortening, vanaspati (vegetable ghee), margarine are plantation- based companies such as Felda Marketing Services Sdn Bhd, Golden Hope Plantations Berhad, PPB Oil Palms Berhad , Sime Darby Berhad and United Plantations Berhad and independent manufacturers such as Kuok Oils & Grains Pte Ltd and related company, Federal Flour Mills Berhad, Lam Soon (M) Berhad and related company Intercontinental Specialty Fats Berhad, Ngo Chew Hong Oils & Fats (M) Sdn Bhd and

Yee Lee Oils Corporation. Among multinationals, Unilever and Cargill are involved in the edible oil products sector through Unilever (M) Holdings Sdn Bhd and Cargill Palm Products Sdn Bhd respectively.

Among producers of specialty fats, IOI Corporation Berhad is set to be the major player following its acquisition of Loders Croklaan BV. Other producers include PPB Oil Palms Berhad, Sime Darby Berhad, United Plantations Berhad, Intercontinental Specialty Fats Berhad, Southern Edible Oil Industries (M) Sdn Bhd and Cargill Specialty Oil & Fats Sdn Bhd

The largest and most integrated producer of oleochemicals in Malaysia is Palmco Holdings Berhad, a subsidiary of IOI Corporation Berhad. Multinationals have a presence in the oleochemical sector through associate or subsidiary companies such as Akzo & Nobel Oleochemical Sdn Bhd, Cognis Oleochemicals Sdn Bhd (joint venture company between Cognis Oleochemicals of Germany and Golden Hope Plantations Berhad), FPG Oleochemicals Sdn Bhd (Proctor & Gamble’s joint venture with Felda) and Uniqema (Malaysia) Sdn Bhd. Other local major producers are Palm-Oleo Sdn Berhad, a subsidiary of Kuala Lumpur Kepong Berhad and Southern Acids (M) Berhad.

6.4 Exporters/Importers

A list of major exporters and importers of Malaysian palm oil is given in the interactive CD ROM edition Malaysia Palm Oil Directory 2002 (MPOPC, 2002) while contact details and other information are available in the hard copy of Malaysia Palm Oil Directory 1999-2000. (MPOPC, 2000). The main importing countries of palm oil are India, Peoples’ Republic of China, European Union, Pakistan, and Egypt. (Table 6, page 12). The major importing companies and organisations by countries are listed in Table 14. In the past, imports of palm oil into India and Pakistan was done mainly by state-owned trading corporations but currently, imports have been privatised to a large extent. In the EU, the Netherlands has the most number of companies importing Malaysian palm oil. Recently, two of its key importers, Unimills B.V. and Loders Croklaan B.V. came under Malaysian ownership by Golden Hope Plantations Berhad and IOI Corporation Berhad respectively.

In general, plantation companies involved in downstream production and manufacturing companies of palm-based products are also exporters of palm oil products. Until recently, exports were mainly in various forms of processed palm oil and there was relatively low volume of export of crude palm oil because of very high export duties. However, in an effort to reduce high stocks of CPO in the country in the past few years, the Malaysian Government has allowed selected companies to export certain quantities of CPO annually without any export duty. The approved volume of duty-free CPO export in 2001 was one million tonnes. Companies exporting CPO include Austral Enterprises Berhad, Golden Hope Plantations Berhad, Kuala Lumpur Kepong Berhad and IOI Corporation Berhad.

Table 14: Major Importers of Malaysian Palm Oil
Country	Company
Algeria	Enterprise Nationale des Crops Gras, Algiers
Australia	Peerless Holdings Pty Ltd, Melbourne
Brazil	Braswey S.A. Industrai E Commercio
Canada	Canbra Foods Ltd, Alberta
China PRC	China  National  Cereals  Oils  and  Foodstuffs  Import  &  Export
	Corporation, Shandong; Universal Seeds and Oil Products Company,
	Beijing
Ecuador	INASA-Industrial Aceitera, Guayaguil; Palmaoil S.A..,Santo Domingo
Egypt	MISR Gulf Oil Processing, Cairo; Savola Egypt, Cairo
Germany	Henry Lamonte Gmbh, Bremen
Greece	Pavlos N Pettas SA, Patras Achaia
Guatemala	OLMECA SA, Fraijanes
Honduras	Fabrica de Manteca Y Jabon Alantida S.A., La Ceiba
India	Ahmed  Oomerbhoy,  Mumbai;  Hindustan  Lever  Ltd.,  M/S  Dipak
	Vegetable Oil Industries Ltd., Gujarat; Pudumjee Agro Industries Ltd,
	Mumbai.
Italy	Via Gardizza snc., Ravenna
Japan	Fuji Oil Co Ltd., Osaka; Riken Nosan Kako Co. Ltd., Fukuoka
Lebanon	M.O. Ghandour & Sons SAL, Beirut
Mexico	Cargill de Mexico, S.A.de C.V., Lamas; Ecologia Y Lubricantes S.A. de
	C.V., Mexico Nuevos
Netherlands	Algemene Oliehandel (AOH),Utrecht; Bergia-Frites B.V., Roermond;
	Cargill B.V. Hardingsdivsie, Roermond; Karishamns B.V.,Koog Ann de
	Zaan;  Loders  Croklaan,  B.V.,  Wormerveer;  Mead  Johnson  B.V.,
	Nymegan;Noba Vetveredeling, B.V., Zwaneburg; Remia C.V., ZG den
	Dolder;romi-Smilfood  B.V.,  Vzaardingen;  Soctek  Nederland  B.V.,
	Zaandam; Unichema Chemie B.V., Gouda; Unimills B.V., Zwyndrecht;
	Zaanlandse Oileraffinaderji B.V., Zaandam
Pakistan	M/S ACP Oil Mills (Pvt) Ltd., Islamabad; M/S Agro Processors &
	Atmospheric Gases (Pvt) Ltd., Karachi
Portugal	Africunha-Imp./Exp..,LDA,  Loures;  Gexpo-Gestao  de  Exp.,  LDA,
	Estoril; Mercadafrica-Com. De Exe.E.Imp.,LDA, Lisboa; Mundafrica-
	Com. Prod. Alimentares LDA, Lisboa.
Spain	Sociedad Iberica de Moituracion S.A., Madrid
Taiwan	Blessing Brother’s Ind.Co.Ltd; Cheng-I Food Co. Ltd; Chia Hsin Flour
	Feed & Vegetable Oil Corp; Flavor Full Foods Inc; Hsei-Yi Co. Ltg;
	Makro  Taiwan  Ltd;  Namchow  Ind.Co.Ltd;  President  Hissin  Corp;
	Sunjet Religious Developing Co; Taisun Ent.Co.Ltd; TTET Union Corp.
Turkey	Almedar Chemical Industry Inc,
United Arab Emirates	Emirates Refining Company, Sharjah
United Kingdom	Hampshire Commodoties Ltd, Hampshire;Matthews Food plc, West
	Yorkshire; Unitrition International, N. Yorks.
USA	Corporacion Bonanza CA; ENIG Associates Inc; Impex Trading Corp;
	Liberty Enterprise Inc; Penta Manufacturing Company Inc; Seaboard
	Trading & Shipping; Sumitomo Corporation of America
Venezuela	Corporacion Bonanza C.A., Caracas

Source: MPOPC - Malaysia Palm Oil Directory, 1999-2000

4.5 Industry Organisations

The diverse interests of upstream and downstream producers of palm oil and palm-based products and their derivatives are formally represented by a number of industry organisations as shown in Table 15. The profile of each organisation (except for POMA) is presented in Part B of this report; a brief description of their roles and functions is discussed in the following sections.

Table 15: Industry Organisations

Sector	Organisation
Plantations	Malaysian Palm Oil Association (MPOA)
	East Malaysia Planters Association (EMPA)
Planters	The Incorporated Society of Planters (ISP)
Independent palm oil millers	Palm Oil Millers Association (POMA)
Palm oil refiners	Palm Oil Refiners Association of Malaysia (PORAM)
Edible oil manufacturers	Malaysian Edible Oil Manufacturers’ Assn (MEOMA)
Oleochemical manufacturers	Malaysian Oleochemical Manufacturers Group (MOMG)
Palm oil promotion	Malaysian Palm Oil Promotion Council (MPOPC)

4.5.1 Plantations

As the plantation industry developed, from the colonial era to present day, various organisations have been formed to represent the interests of relevant groups; the earliest industry organisations include the United Planting Association of Malaysia (UPAM), Rubber Growers’ Association (RGA) and the Malaysian Estate Owners’ Association (MEOA). With the rapid expansion of the oil palm industry from the 1960s, the Malaysian Oil Palm Growers’ Council (MOPGC) was established to represent the plantation companies. With the passage of time and changes in the structure of the industry, there was much overlap in the roles and functions of the four organisations. A rationalisation exercise in 1999 saw the merger of the four major industry organisations into a single body, the Malaysian Palm Oil Association (MPOA).(Profile ORG.1, page 88) The mandate of this integrated organisation is, to represent the industry as a single voice and meet the complex needs of the plantation industry more effectively.

Any individual or company which owns a minimum of 40 hectares of a plantation crop is eligible to be a member of MPOA. As on 1^st June, 2002, MPOA has more than 100 members with a total area of more than 1.4 million hectares under oil palms This represents more than 70% of the area under private sector ownership. The total members’ planted oil palm area includes more than 354,000 hectares under Felda Plantations Sdn Bhd which is registered as a plantation company.

MPOA represents the industry in several government and statutory bodies and related industry organisations, key representations include membership on the Board of the Malaysian Palm Oil Board (MPOB) and Chairman of the Board of Trustees of the Malaysian Palm Oil Promotion Council (MPOPC). MPOA also has a voice in international organisations on oils and fats such as the National Institute of Oilseed Products (NIOP), International Association of Seed Crushers (IASC), FOSFA International Oils and Fats Committee and the ASEAN Vegetable Oils Club (AVOC).

MPOA activities are focused on a number of priority issues, one of which is environmental concerns and sustainable development; recently, it set up a Working Committee on Environment. MPOA has been in active dialogue with WWF Malaysia on issues pertaining to oil palm and the environment, with particular focus on the development of best management practices in respect of forest and wildlife conservation.

Prior to 1999, the interests of plantation companies in Sabah and Sarawak are mainly represented by the East Malaysia Planters’ Association (EMPA) (Profile ORG.2, page 92). During the exercise on the rationalisation of industry organisations, EMPA resolved to remain as an independent body to serve the needs of East Malaysia - domiciled plantation companies. With the establishment of branch offices of MPOA in Sabah and Sarawak, several plantation companies have since become members of the new pan -Malaysian organisation. While EMPA would continue to serve the unique needs of plantations in East Malaysia, the existence of two industry organisations with broadly similar functions could present the attendant risk of duplication of efforts and representation, particularly on issues of national interest.

Among its activities, EMPA has worked in collaboration with the Ministry of Tourism and Environment Development, Sabah to raise the level of awareness on the environmental issues such as pollution of rivers associated with logging and plantation activities. EMPA was an active participant in WWF Malaysia Partners for Wetlands Forum in April, 2001 on making land use more sustainable in the Lower Kinabatangan Floodplains.

6.5.2 Planters

While  MPOA  and  EMPA  serve  the  interests  of  plantation  companies,  the

Incorporated Society of Planters (ISP) (Profile ORG.3, page 94), was established in 1919 to represent the interests of the planters – the estate executives at the management level. From an inaugural membership of 200 planters, the ISP currently has more than 4350 members, 600 of whom are overseas members from 37 countries. With the foresight of its founding

members, ISP has had from its inception placed priority on technical support for its members through education and publications. The Society conducts examinations and awards professional qualifications from diploma to post-graduate levels; the latter being the Masters of Science in Plantation Management that is jointly conducted with Universiti Putra Malaysia.

Over the years, ISP has organised workshops, seminars, training courses and conferences, at national and international levels on various aspects on research, cultivation and management of plantation crops. The ISP organises the International Planters Conference every three years, the next one being scheduled for 2003.

The Planter, which has been published monthly since 1920 is the main vehicle for disseminating information on the plantation industry to its members. Although the ISP does not have specific focus or activities on the environment, it has expressed its interests and concerns in numerous editorials in The Planter. The ISP was an active participant in WWF Malaysia Partners-for-Wetlands Forum on in April, 2001 in Sabah.

6.5.3 Processors and Downstream Producers

Other producers along the supply chain have their own organisations to represent their interests in various government and industry bodies and committees. The

Malaysian Palm Oil Millers Association (POMA) was formed in 1985 to represent the interests of the operators of independent palm oil mills that do not own oil palm plantations. It also serves as a mediator to settle disputes among members or between members and suppliers of fresh fruit bunches.

The Palm Oil Refiners Association of Malaysia (PORAM) (Profile ORG.4, page 97) looks after the interests of the member companies involved in the palm oil refining and processing industry. PORAM membership which includes subsidiary companies of plantation companies, subsidiaries of multinational corporations like Cargill and the Birla Group of India and independent refinery companies account for more than 75% of the total export of processed palm oil from Malaysia.

The Malayan Edible Oils Manufacturers’ Association (MEOMA) (Profile ORG.5, page 100) cover a wider range of industries, its members business activities range from palm oil milling, kernel crushing, palm oil refining, production and packaging of cooking oil for the retail consumer, and oleochemicals. Several members are involved in the production coconut oil and coconut oil cakes while others offer services such as broking and insurance. In view of the varied activities, many MEOMA members are also affiliated with other industry organisations such as POMA, PORAM, MOMG and MPOA. Members of MEOMA represent about 80% of the edible oil industry in Malaysia.

The Malaysian Oleochemical Manufacturers Group (MOMG) (Profile ORG.6, page 103) is a product group of the Chemical Industries Council of Malaysia (CICM). MOMG consists of 12 members who are involved in the production of basic oleochemicals namely fatty acids, methyl esters, glycerine and fatty alcohols in Peninsular Malaysia. MOMG membership consists of local oleochemical manufactures and several joint-venture companies with multinational corportations.

The above palm oil producers organisations are essentially trade associations to represent the interests of their respective members. All of them are represented on the Board of MPOB and the Board of Trustees of MPOPC (except MOMG). They are also members of MPOPC’s Palm Oil Task Force on the Environment.

6.5.4 Palm Oil Promotion

The Malaysian Palm Oil Promotion Council (MPOPC)(Profile ORG.7, page 106) was formed in 1990 to replace the Palm Oil Promotion Fund that was set up to address the anti- tropical oil campaign in USA in the 1980s. The mandate of MPOPC is to spearhead the promotional and marketing activities of Malaysian palm oil. MPOPC is an industry-funded organsiation and is currently headed by the Executive Chairman of Kuala Kepong Berhad.

MPOPC’s activities are focused on marketing communications, technical marketing and market promotion in locally and in several key edible oil consuming countries. In view of the increasing concern and adverse publicity over oil palm and the environment, MPOPC set up a Palm Oil Task Force on the Environment (POFTE) in 2001 with membership drawn from all palm oil industry organisations as well as the Malaysian Palm Oil Board (MPOB) and Dept of Environment Malaysia (DOE).