18/05/2017 (The Star) - As Malaysia steps into the second century of commercial oil palm planting, Sime Darby Plantation Sdn Bhd. Managing Director Datuk Franki Anthony Dass reiterated that the challenges facing the industry will only continue to intensify.

In order to face the increasing demands on the industry, he says Malaysia needs to work towards creating a distinguished Malaysian brand for palm oil, which will be accepted as the preferred choice by global customers.

“This is what we must strive for. The Malaysian brand must be seen as the world’s preferred supplier of certified sustainable palm oil and palm products,” he says.

In recent years, there have been heightened anti-palm oil campaigns and several proposed protectionist and discriminatory tax on palm oil in several countries in the West, Franki points out that “Malaysia is already on track towards building a good reputation for its palm oil and palm oil related products in the global markets.”

Earlier this year, social media was abuzz with allegations of cancer health concerns due to the use of palm oil in Nutella, a popular chocolate and hazelnut spread made by Italian company Ferrero S.p.A.

The underlying issue was related to the occurrence of 3-monochloropropanediol (3-MCPD) and Glycidyl esters (GE) in palm oil.

Research findings have shown that these elements are also present in all other oils and fats, including olive oil, not just palm oil.

Ferrero in response to these allegations has defended palm oil, stating that their premier product depends on Malaysian palm oil for its taste, quality and consumer acceptance. Ferrero also revealed that certified sustainable palm oil from Malaysia has almost zero content of 3-MCPD and GE.

Certified sustainable palm oil for all

To further raise the standard of Malaysian brand palm oil, Franki notes that it was important for all smallholders involved in oil palm planting to be certified to produce sustainable palm oil.

“Currently, the big plantation players are all RSPO-certified. It is now the smallholders that need to be assisted,” he adds.

Towards this, the Malaysian Sustainable Palm Oil (MSPO) certification scheme could play a role to ensure that this becomes a reality.

“The Malaysian Palm Oil Certification Council (MPOCC) must make a concerted effort to certify all Malaysian smallholders and the smaller plantation companies.

“Then we can come out to declare that all the Malaysian palm oil is certified and sustainable.

“That is one aspect of the Malaysian brand that I am talking about,” he says.

To create the brand of Malaysian palm oil, Franki says transformation and innovation are two critical requirements.

“This is our vision for the next 100 years.

“To become the preferred global supplier because our palm oil is of the highest quality and produced sustainably.

“We can continue to preserve the country’s 60% forest area because we do not need to clear any new land with our high-yielding materials; and our smallholders can enhance their livelihood,” explains Franki.

Malaysia has a policy of maintaining 60% of its natural forest.

“The only way we can increase production without clearing new land is by producing superior yielding materials,” he says.

Franki points out that farmers in the Western world were more advanced and mechanised, and says this is the direction in which the Malaysian industry needed to go.

By ensuring sustainable practices in every part of the value chain, Franki says Malaysia could silence its critics.

“There cannot be human rights violations such as child labour or modern day slavery –we cannot be accused of such things,” he adds.

“Oil palm must be grown under the most sustainable and traceable environment.

“The Government must step in to regulate and enforce all this now,” he says. “The Government’s support to the industry is critical as we move into the next 100 years.”

“This is where Malaysia can create its niche and brand its palm oil as Green Palm Oil,” he says.

Plantations of the future

Franki explains that the plantation of the future should be carbon positive or neutral, highly productive, cost efficient and fully sustainable, in order to mitigate the challenges the industry is facing now, namely; Green demands, CPO price vagaries, global warming, manpower shortages and many others.

“Operations will be fully mechanised and automated with the use of drones, robotics, advanced sensors and digital technologies as well as user-friendly machineries and equipments, making plantations more efficient and attractive workplace,” he says.

These technological and digital advancements will be routinely used to monitor palm health, nutritional status and support operations with minimal manpower requirements.

The carbon footprint, he adds, must also be reduced for every tonne of CPO produced.

“The Malaysian palm oil industry must be able to say that it has the lowest carbon footprint, zero deforestation, no new plantings on peat land, and lower greenhouse gas emissions from its mills and refineries.

“The focus on water conservation through novel water capturing and storage technology, such as harvesting water vapour and storing excess water underground will strengthen the credentials of the palm oil industry.

The milling and refining processes, which have not seen much state-of-the-art technological improvements over the years, also needed to be revolutionised. With the use of technology, the emission of methane from the mills can be converted to renewable energy to be used to run the mills and provide electricity for other operations, township and to the national grid.

“Our mills must be designed to maximise energy, efficiency in the use of water, and towards zero-discharge technologies.

More advanced and modern milling technologies, he says, will ensure maximum extraction efficiency, very minimal oil losses and create optimal working conditions for its employees, thus ensuring high productivity.

New innovations and differentiated products will also benefit refiners to get higher margin products and customers, and strategically position in new markets.

On the planters’ cost of production, Franki adds the cost must also be well managed to ensure the industry does not suffer every time it was hit by low prices.

The Malaysian palm oil industry, he says, must strive to build a resistance, not only to extreme weather conditions, but to the volatility in prices as well.

“Every time we are hit with low prices, everyone suffers, particularly the smallholders and farmers.

“The Malaysian brand should be so well-produced that it can withstand the fluctuation of prices and extremes of weather conditions,” he says.

Another area that the industry has to improve on, he says, is in its communication strategies.

Instead of responding only when attacked, he says the industry needed to plan ahead and disseminate strategic information about palm oil, as well as its benefits and advantages.

“We must be ahead constantly in putting out the right facts and messages about palm oil rather than just reacting or responding. It is also important to target the younger generation using the social media and schools of learning.

“We must also be more aggressive. The achievements of the industry should continuously be highlighted,” he says.

Ultimately, he says, the entire edible oils industry should be subjected to a global sustainability standard and certification.

“No other edible oil industry faces as many restrictions and sustainability demands as the palm oil industry.

“One global sustainability standard and certification for all edible oils will be the way forward.

“That is another wish I have for the industry,” he concludes.