IOI Corp set to expand into higher-margin palm oil products and expects increased FFB production
16/03/2026 (Oils and Fats International Magazine) - Plantation conglomerate IOI Corp is expanding into higher-margin palm oil products, according to a New Straits Times article citing a report by Public Investment Bank (PublicInvest).
Following an analyst briefing, PublicInvest said the plantation group aimed to increase its exposure to value-added crude palm oil (CPO) products to offset weak refining margins and volatility in palm oil prices.
The move came as the company’s upstream plantation segment was expected to remain resilient, while its downstream business continued to face a challenging outlook, the 5 March report said.
PublicInvest noted that IOI Corp’s fresh fruit bunch (FFB) output rose 8% in the first half of 2026, although production was expected to decline by about 20% month-on-month in February due to seasonal factors, before rebounding around 10% in March.
An overall FFB production growth of 5%-8% was forecast in 2026, with the recent drought in Johor and flooding in Sabah expected to have minimal impact on output.
As of the first half of 2026, fertiliser application had reached about 60% of its target, while replanting was on track to cover 10,000ha this year due to some areas being carried forward from the previous financial year.
Production costs were also projected to decline by about MYR200 (US$51)/tonne in 2026, supported by improved FFB yields, better oil extraction rates and fertiliser costs that were expected to fall by 3%-5% year-on-year.
To cushion weak refining margins, IOI Corp was expanding into premium palm oil products, including low-contaminant refined crude palm oil (CPO), Roundtable on Sustainable Palm Oil (RSPO)-certified CPO and organic CPO, the report said.
IOI Corp’s downstream segment recorded stronger performance in the first half of 2026, driven mainly by improved oleochemical margins in the first quarter following a sharp decline in palm kernel oil (PKO) prices.
The segment was also expected to benefit from incremental earnings contributions from IOI Corp’s 20%-owned speciality fats associate, Bunge Loders Croklaan, which had completed its second plant in New Orleans and was expected to lift year-on-year production capacity by 5%-10% for products such as cocoa butter equivalents and cocoa butter replacers.
Beyond palm oil, IOI Corp was expanding into new ventures, including coconut plantations and palm-based wood and pulp products.
The group also planned to increase its coconut plantation area from 3,000ha to 5,000ha, the report said.
Construction of a coconut oil mill complex in Segamat, Malaysia, was scheduled to begin this year and was expected to be commissioned by 2028. The facility would initially process about 100,000 coconuts/day, with plans to scale up capacity to 200,000 coconuts/day.
IOI Corp’s activities include oil palm cultivation, palm oil processing and include seed breeding, according to its website.
Including areas owned by associate companies, IOI Corp’s plantations cover 200,000ha and it manages 94 estates and 15 mills – 13 in Malaysia and two in Indonesia.