MARKET DEVELOPMENT
CEOs Concerned About High Labour Costs, Stagnant Yields
CEOs Concerned About High Labour Costs, Stagnant Yields
14/10/2016 (The Star) - The palm oil industry faces major hurdles in light of a tougher operating environment, as well as the uncertain outlook on crude palm oil (CPO) prices in the immediate term, according to a panel of the country’s top plantation companies.
During a round table entitled “Challenges and Opportunities Facing the Palm Oil Industry” at the Malaysia Palm Oil Trade Fair and Seminar here, industry leaders highlighted their major concerns.
Among them is the increasingly high labour costs and lack of improvement in operational yields.
“Stagnating yields is a major concern. The industry’s yields have averaged around four tonnes of oil per ha in recent years. Plantation companies would be in a difficult time if CPO prices collapse,” said Kuala Lumpur Kepong Bhd chief executive officer Tan Sri Lee Oi Hian.
IOI Corp Bhd’s chief executive officer Datuk Lee Yeow Chor said that companies in the industry were doing their utmost in their sustainability efforts, particularly given the heavy scrutiny by non-governmental organisations and industry watchdogs.
“Managing the plantations alone is not enough nowadays. Companies also have to communicate the right message to the stakeholders,” he noted.
Meanwhile, Sime Darby Plantation managing director Datuk Franki Anthony Dass called for a revision in the current export tax structure, which had affected the margins of plantations players.
“There are many ways to protect our refiners, which is one of the reasons behind the tax. We have a new minister and I am sure the captains of industry would be open to suggestions on how to handle this, going forward,” he said.
During a round table entitled “Challenges and Opportunities Facing the Palm Oil Industry” at the Malaysia Palm Oil Trade Fair and Seminar here, industry leaders highlighted their major concerns.
Among them is the increasingly high labour costs and lack of improvement in operational yields.
“Stagnating yields is a major concern. The industry’s yields have averaged around four tonnes of oil per ha in recent years. Plantation companies would be in a difficult time if CPO prices collapse,” said Kuala Lumpur Kepong Bhd chief executive officer Tan Sri Lee Oi Hian.
IOI Corp Bhd’s chief executive officer Datuk Lee Yeow Chor said that companies in the industry were doing their utmost in their sustainability efforts, particularly given the heavy scrutiny by non-governmental organisations and industry watchdogs.
“Managing the plantations alone is not enough nowadays. Companies also have to communicate the right message to the stakeholders,” he noted.
Meanwhile, Sime Darby Plantation managing director Datuk Franki Anthony Dass called for a revision in the current export tax structure, which had affected the margins of plantations players.
“There are many ways to protect our refiners, which is one of the reasons behind the tax. We have a new minister and I am sure the captains of industry would be open to suggestions on how to handle this, going forward,” he said.