Sime Darby: Sustainability as basis for entrusted Quality Palm Fruit Oils

Transcription

1 Sime Darby: Sustainability as basis for entrusted Quality Palm Fruit Oils Anetta Nowak, Sime Darby R&D Innovation Centre Europe MPOC symposium September 2015

2 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. 2

3 Sime Darby focuses on 6 core businesses Plantation Property Industrial Motor Energy & Utilities Healthcare 3

4 with operations in over 20 countries China Germany The Netherlands United Kingdom South Korea Thailand Vietnam Japan Qatar Nauru Canada Liberia Maldives Indonesia Malaysia Singapore Papua New Guinea United States South Africa Solomon Islands Australia New Caledonia New Zealand 4

5 Palm fruit oils are key food ingredients Palm Oil Palm Kernel Oil 5

6 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 Risk assessment matrix crude vegetable oils contaminants 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: 6

7 Puzzled consumer Social Impact Local communities Smallholders BHA E621 E133 E124 Chemicals Environmental Impact deforestation pesticides Climate change ALL AGRICULTURAL PRODUCTS HAS ENVIRONMENTAL AND SOCIAL IMPACTS IN PRODUCTION, BUT CAN BE PRODUCED IN A SUSTAINABLE MANNER 7

8 Palm is one of the most efficient crops Palm produces up to 10 times more oil per hectare compared to other major vegetable oils Hectarage Area under Cultivation in 2012 (Total =258.9 mil hectares) Volume (MT) Global Production in 2012 (Total =186.4 mil tonnes) Source: Oil World

9 The Palm Footprint is very small Compared to Other Agricultural Products 0.3% of Global Agricultural Area 16.6 million ha Planted with Oil Palm Globally 1.1% of Global Cropland Global Area Under Agriculture Agricultural Area Crop Planting Crop Planting Livestock Pasture Fibre Crops 2% Other Crops 34% 68% million ha 32% Cereals 46% million ha Source: Analysis of FAO Statistics 2011 Vegetable Oil 18% 9

10 Oil Palm agriculture has proven to be a Major Driver of Economic Development Malaysia 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 Indonesia 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. National Key Economic Area: targets to generate RM178 billion in gross national income by 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 10

11 Oil Yield (t/ha/y) Yield is key for sustainability Sime Darby s unique palm genome science 5.6 t/ha Physically limited to ~90% dry weight Low yield When will we see source limitation? Architecture limits? Other factors?? Bunch number -? Mesocarp size: amino acids, nucleosides, hormones, cell division, nutrients?? TAG assembly, glycolysis, lipid bodies, energy, carbon sources ~18.2 t/ha 11.9 t/ha Max Yield Theoretical High Yield Lipid biosynthesis (O/M) Fruit characteristics (Mesocarp size) Bunch production (Bno) 11

12 Sime Darby s Total Value Chain Strategy today Good Agricultural Practices, minimize environmental impact of plantations, animal feed applications of side-streams and biofuels Available today New generations Biofuels Biobased chemicals and nutritional ingredients Since 1965 Sime Darby s developed, implemented and commercialized technologies to achieve maximum use of palm fruit agriculture 12

13 1985 ntroduced zero burning 1990 Biological control for IPM Sime Darby s Sustainability Journey 1992 Elected to UNEP Global 500 Roll of Honour for commercialisation of zero burning practice 1994 EMS-ISO Founding member of RSPO 2002 POME utilisation as compost 2008 Achieved 2004 RSPO First certification GlobalGAP certification 2010 First certification of SCCS and ISCC Sime Darby Plantation is a leader in plantation sustainability 2012 Largest producer of certified sustainable palm oil, leading total sustainable production, food safety, CSR, and GHG reduction. Pioneered the Zero Burning Policy in 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 Beyond 2015 Spearheading study on High Carbon Stock forest and thresholds 2015 Acquisition of New Britain Palm Oil 13

14 Corporate Responsibility & Our Sustainable Practices Community Engagement Efforts No-deforesting and Restoring Plant Biodiversity Protecting Endangered Species a b c d 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. e e. Rehabilitation of Orang Utan habitat in Ulu Segama Sabah f. Protecting and preserving the biodiversity of Tabin Wildlife Reserve, Sabah f One of Sime Darby s HUMANA schools in Ladang Binuang for children of foreign workers Stability of Altered Forest Ecosystems (SAFE) Project in Sabah, Malaysia Sime Darby s Gender Policy looks after the wellbeing of its plantation workers Sime Darby actively supports sports such as lawn bowls These children receive their education at one of Sime Darby s HUMANA schools Sime Darby s Mangrove Research Centre is dedicated to mangrove conservation Participants at Sime Darby s Gender Policy workshop, in teambuilding activities Sime Darby FC - Currently in the 2 nd 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. 14

15 Some Sustainability Practices Implemented As an industry leader, Sime Darby Plantation pioneered many of the sustainable plantation initiatives considered best practices today: Good Water Management Excellent Plantation Management Practices Ground Cover Crops for Soil and Moisture Conservation Best Mill Practices Balanced Age Profile Through New & Replanting Exercise Integrated Pest Management Zero Burning Replanting Technique Palm oil mill effluent (POME) Treatment 15

16 Integrated Pest Management (IPM) Usage of natural predators and biological solutions as a means to replace and reduce the usage of chemical pesticides in our estates Pheromone trapping for Rhinocerous beetles Beneficial plants for caterpillar predator insects Cordyceps fungus for insect population control Barn owl populations for rodents 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 16

17 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 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 Liberia, 44,000 ha have been earmarked on top of the 220,000 ha concession area, for Sime Darby s outgrowers scheme. In Papua New Guinea and Solomon Island, all our associated smallholders are certified in 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 Sime Darby is committed to the balanced development of the economy and the local communities living in areas of its operations. 17

18 Making sustainability real - Our commitment to local communities in Liberia 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. 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. 18

19 CSR efforts in Liberia has improved the people s quality of life and ability to earn a living School Project in Senii Completed New Bomi School Under Construction 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. 19

20 Sime Darby s approach to sustainable agriculture Social & Environmental Impact Assessment (SEIA) and High Conservation Value Assessment (HCV) New Planting Procedure (NPP), Free, Prior, Informed Consent (FPIC) and Communications Strategy Land Development and Planting Ongoing Sustainable Practices Community Development 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. 20

21 Sime Darby s integrated supply chain allows us to manage risks and provide trust to our customers seed agriculture ship refine consumer 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 21

22 Thank you 22