Some aspects of palm oil production parallel American soybean production practices, but many others reveal a radically different system.
11/08/2008 (Biodiesel Magazine) - World palm oil production has been nudging soybean oil production out of the No. 1 spot in recent years with nearly 90 percent of production coming from just two countries—Malaysia and Indonesia. Sheer distance keeps familiarity with the competition difficult for the American soybean industry. In April, Biodiesel Magazine got a closer look at the Malaysian palm oil industry while attending the first International Palm Oil Sustainability Conference. The trip to Malaysia included a tour of IJM Plantations Bhd. in the Malaysian state of Sabah on the northern coast of Borneo.
The tour began at the corporate headquarters in Sandakan, a city known for its ecotourism. IJM is Malaysia’s second-largest construction firm with international operations in Dubai, United Arab Emirates and India. The company entered the palm oil business two decades ago, and has built its planted area up to 80,000 acres this year with plans to expand into Indonesia and India. ”We are expanding in areas of degraded forest,” explains IJM’s Chief Executive Officer Velayuthan Tan, who has experience dealing with environmental activists critical of oil palm production. "I'm a lover of nature, but we came here for economics," Tan says. "Yet it’s not just about profits.” In addition to the open management style of its plantation operations, the publicly traded company has developed its own research and training center, and is a member of the Roundtable for Sustainable Palm Oil. IJM has initiated several programs to preserve native trees and plants as a heritage for the future, Tan says.