Anetta Nowak, Sime Darby R&D Innovation Centre Europe
MPOC symposium September 2015
Sime Darby: Sustainability as basis for entrusted Quality Palm Fruit Oils
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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.
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Sime Darby focuses on 6 core businesses…
Plantation Property
Industrial Motor Energy & Utilities Healthcare
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…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
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Palm Oil
Palm Kernel Oil
Palm fruit oils are key food ingredients
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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
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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
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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)
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The Palm Footprint is very small Compared to Other Agricultural Products
32%
68%
Global Area Under Agriculture
Crop Planting
Livestock PastureOther Crops
34%
Vegetable Oil 18%
Cereals46%
Fibre Crops2%
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
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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
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Yield is key for sustainability Sime Darby’s unique palm genome science
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1 2 3 4 5 6 7 8 9 10 11
Oil
Yie
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)
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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
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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
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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
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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, Sime Darby Plantation pioneered many of the sustainable plantation initiatives considered best practices today:
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Integrated Pest Management (IPM)
Pheromone trapping for Rhinocerous beetles
Barn owl populations for rodents
Beneficial plants for caterpillar predator insects
Cordyceps fungus for insect population control
Usage of natural predators and biological solutions as a means to replace and reduce the usage of chemical pesticides in our estates
Sime Darby: More Nature – Less Chemistry
• Paraquat eliminated since 2006
• Rodenticides largely eliminated
• Pesticide usage/ha at lowest possible level
– Sime Darby: < 2 kg/ha
– Avg. Soy industry: > 6 kg/ha
Sime Darby uses 25 times less pesticides to generate 1 MT palm fruit oils than typically used for soy bean oil
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Economic Benefits to Local Communities
Improving livelihood: Sime Darby has Outgrowers’ Scheme in Indonesia, Liberia, Papua New Guinea and Solomon Island and purchase from smallholders in Malaysia
Sime Darby is committed to the balanced development of the economy and the local communities living in areas of its operations.
In Liberia, 44,000 ha have been earmarked on top of the 220,000 ha concession area, for Sime Darby’s outgrowers’ scheme.
In Indonesia, our outgrowers’ scheme involves 40,000 ha of area, supporting 25,000 families. Sime Darby is also committed to purchase FFB produced by smallholders under the scheme. Target to get 100% RSPO certified by 2020
In Papua New Guinea and Solomon Island, all our associated smallholders are certified in 2013. Purchase almost 600,000 tonnes of fruit from 16,000 smallholder blocks
In Malaysia, outgrowers schemes are being managed by a special purpose entity. However, Sime Darby still purchases fruit from ~ 100 independent smallholders and estates
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Making sustainability real - Our commitment to local communities in Liberia
Sustainability in Liberia
• 3,000 jobs created – to date
• 7 schools – free education for 5,000 students
• 12 classroom junior high community school for 322 students
• 2 community clinics – 40,000 residents
• 453 farmers from all 17 townships surrounding our operations
• 12-months’ worth of technical assistance and seeds from SDPL to set up rice, corn, and vegetable plots on 50 hectares of land
• USD500,000 in scholarships (through Sime Darby Foundation) to enhance educational opportunities for Liberian students.
Ebola Outbreak in Liberia Sime Darby Plantation donated RM 500,000 to the
International Red Cross in Liberia and has provided additional direct assistance to local communities and
Liberian health authorities.
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CSR efforts in Liberia has improved the people’s quality of life and ability to earn a living
New Bomi School Under Construction School Project in Senii Completed Buses Provided to School Children
Bomi Estate School Canteen
Women Market for Community to Sell and Buy Groceries
Well maintained water hand pumps
We are fully dedicated to bring positive impacts on Project Affected Communities.
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Sime Darby’s approach to sustainable agriculture
Sime Darby Plantation actively and continuously engages all necessary stakeholders including communities and their leaders before the
commencement of any land development. Prior to developing an area express approval from both the communities and their leaders is required.
Social & Environmental
Impact Assessment (SEIA) and High
Conservation Value Assessment (HCV)
Land Development and Planting
Ongoing Sustainable Practices
New Planting Procedure (NPP),
Free, Prior, Informed Consent
(FPIC) and Communications
Strategy
Community Development
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Sime Darby’s integrated supply chain allows us to manage risks and provide trust to our customers
seed ship consumer refine agriculture
• Sustainably produced palm fruit oils
– Guarantee sustainability: environmental and social sustainability
– Traceability of raw materials to origin
– RSPO certified (segregated) palm fruit oils
• Minimize processing
– Know origin of palm fruit oils – tracking
– Less processing – more natural
• Better Quality
– Retaining goodies provided by nature (β-carotene, Vitamin E)
– Longer shelf-life
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