Archive for April 2012

Greener environment or protectionism?

FACING BARRIERS: Oil palm, despite being the most efficient crop for biofuel, is still considered not as sustainable as other oil crops. A flag bearer for the palm oil industry and an economist tell OOI TEE CHING of protectionist measures in the US and European Union used to block palm oil  imports.

TAN Sri Bernard Dompok stared across the table. The solemn look on his face accentuated the sombre atmosphere in his office.

After what seemed like eternal silence, the Plantation Industries and Commodities Minister leaned forward and said he had recently returned from urging US government officials to accord palm oil biofuels equal trade opportunities with local variants, and not to restrict palm oil imports.

He told Business Times that the US regulatory body Environmental Protection Agency's (EPA) current findings on palm oil carbon footprint is faulty.

In 2007, the US Congress had allowed for refineries there to blend a certain amount of renewable fuel with gasoline and regular diesel. Ethanol and biodiesel qualify, if they are 20 per cent cleaner than fossil fuels.

In January this year, the EPA released a preliminary analysis suggesting that biodiesel made from palm oil does not qualify. This is based on an assumption that wanton deforestation occur in Indonesia and Malaysia when planting oil palms.

Since EPA said palm biodiesel fails to meet that 20 per cent threshold, oil companies in the US cannot use it. This mean they can only use fuels made from soyabeans, animal fat, algal oil, canola oil and used cooking oil.

"It is a blatant disregard of scientific evidence to assume that massive deforestation occur in the planting of oil palms," Dompok said.

"When EPA announced palm biodiesel only has GHG (greenhouse gas) savings of 17 per cent from the usage of regular diesel, it did not take into consideration recent oil palm yield improvements and environmental protection development undertaken by our planters, millers and refiners," he added.

Citing numbers from the Malaysian Palm Oil Board, the minister said the GHG savings of palm biodiesel is around 60 per cent that of petroleum diesel. Furthermore, palm biodiesel's green factor can go as high as 66 per cent when produced with methane captured at the mills.

Dompok said many US officials were misinformed about Malaysia's steadfast commitment to both economic growth and environmental protection.

"We're in the process of harnessing the significant potential for palm biomass. Malaysia is investing into next generation biofuels and bio-chemicals that will satisfy growing domestic and international demand for greener products," he said.

Separately, in a telephone interview from Washington DC, renowned economist Dr Robert Shapiro explained that the determination of GHG savings of various oil crops to fossil fuels is part of EPA's renewable fuel standard (RFS) programme, which aims to promote more green-energy usage, including advanced biofuels.

Shapiro, who is Sonecon LLC chairman, is also a fellow at the Georgetown Center for Business and Public Policy at the McDonough School of Business.

He said the RFS is effective in addressing the US' goals to reduce dependency on fossil fuel, create jobs and lower GHG emissions from the transportation sector.

"In order to meet its mandate of higher green energy usage, America needs to explore all options, and not just domestic sources such as soyabeans and corn," he said. 

The US is the world's biggest producer and exporter of corn. The RFS, introduced in 2005, created government-guaranteed demand for corn, the renewable feedstock to make ethanol.

An update to the RFS approved by the US Congress in 2010 (RFS2) became controversial due to its initial determination that corn ethanol would not meet sustainability standards due to indirect land use change, reflecting the current debate over palm biodiesel.

"We observed that the EPA initially determined that corn ethanol reduced GHG emissions by just between five and 18 per cent, compared to gasoline, far less than EPA's recent determination for palm oil and insufficient for use under the RFS programme.

"This was subsequently revised following a strong response by researchers questioning the EPA's analysis of additional emissions associated with land use change. The Agency, finally, reduced the number by half," he said.

"In fact, the general view of international experts is that the current understanding and projections of emissions from land use changes are highly speculative and therefore, not a reliable basis for policy-making."

Shapiro acknowledged that the increased production of ethanol has a large impact on corn prices. In a free market, if the price of corn goes up, demand will go down, moderating corn prices. But the US federal mandate requires the same amount of ethanol no matter how expensive corn is.

In 2005, when the renewable fuel mandate was first introduced, ethanol production accounted for only five to 10 per cent of the demand for corn in the US. Now it is up to roughly 40 per cent. 

Currently, corn prices on the Chicago Mercantile Exchange is trading at about US$6.50 (RM19.83) per bushel - almost triple the pre-mandate level.

"If palm biodiesel, a very efficient renewable fuel, is to be included into the RFS2, it would lessen corn demand for fuel and possibly lead to cheaper feed for our livestock farmers," Shapiro said.

In Europe, there is a law requiring 10 per cent of all transportation fuel to come from renewable sources by 2020. 

Palm biodiesel exporters from Malaysia and Indonesia have consistently expressed their grave concerns that in the US and European markets, palm oil is being unfairly assessed to protect the US soyabean and European rapeseed farmers.

Incidentally, US soyabean farmers are speaking with the European Union (EU) over their exclusion from the EU biodiesel market due to a similar determination that soya biodiesel fail to meet the European Renewable Energy Directive. 

On a global scale, both palm and soya biodiesel producers have stated that the EU's assessments are inaccurate and violate trade rules at the World Trade Organisation.

The advocacy roles of palm oil groups

This was written by Edi Suhardi who works at one of GAPKI’s member companies. It was published in Jakarta Post.

Last week, Bandung hosted the annual congress of the Association of Indonesian Palm Oil Companies (GAPKI). While this was routine for the association, it is imperative for the association to rethink its role as the vanguard of efforts to advance the country’s palm oil industry.

Palm oil is now Indonesia’s second-biggest export after coal. Despite its achievement, the industry is treated like a Cinderella, one that works hard beyond her means to satisfy the family and yet, treated like a stepchild -- unappreciated and oppressed.

Looking at this Cinderella phenomenon, the new management of GAPKI should more actively voice its members’ interests. Todate, there are unfair negative perceptions that the association has yet to address.

Policy-making and business interests are closely connected. Through lobbying, one can "influence the thinking of legislators or other public officials for or against a specific cause” (Accountability & UN Global Compact, 2005).

In the business world, lobbying is part of “corporate political activity”, which certain interest groups engage in when they wish to influence political processes and decisions. In this sense, it covers a wide range of activities from advertising and other forms of public communication to stakeholder engagement, commissioning research, preparing position papers, launching legal action, or contributing to election campaign financing.

Interest groups, including corporations and associations representing corporations and the industry, have the political rights to influence public officials by voicing their interests. However, this right is legitimate only if it is balanced by the obligation to act responsibly, thus balancing rights and obligations.

This can be referred to the notion of “corporate citizenship”, when companies involve themselves in the citizenship arena, exercising their rights to actively participate in societal decision-making.

Indonesia is bestowed with tropical weather, ample agricultural land, with appropriate rights to the land, attractive investment climate. Also, we have a wide talent base for all levels of management, from strategising to operational, spread across the sprawling palm oil value chain.

With all these strengths, there are many business development opportunities both in the upstream as well as down stream. Currently, we are the biggest palm oil exporter, servicing the world’s increasing appetite for cooking oil and energy.

We have friendly investment laws. The export orientation also induces sustainable palm oil-based management, with a growing adoption of international sustainable certification, servicing both established oil markets in Europe and now dominating markets in India and China.

The palm oil industry is a major contributor to the Indonesian economy supporting livelihoods that feed 3.3 million households. Yet, when it is time to exercise its legitimate rights as a corporate citizen, the palm oil industry is treated like a Cinderella.

First, there are lengthy and uncertain procedures to obtain necessary permits.
There are various permits / licenses / approvals to be obtained from various government authorities on incorporation of the company, land ownership and plantation operational licensing.
Investors, including farmers and smallholders may need a quite lengthy and costly process to obtain complete licenses. Therefore, many companies and individual investors have been opting for acquiring local plantation companies or concessions to avoid the lengthy process, assuming the locals have already obtained the licenses.

Second, there's governance challenges.
The palm oil industry regulatory environment has been government-heavy with more revoking power and less dispute resolution. The regulatory regime gives government officials unprecedented power to revoke licenses, even for some trivial and unintentional ones.
We have no system in place for typical notification, remedy, and appeal procedures. Therefore, palm oil companies and smallholders are reluctant to be seen as “activist companies”, actively voicing their complaints on unfair treatment. This is the role that should be taken over by the industry association, to avoid any repercussion towards a single company that files complaints.

Third, since May 2011, the President has imposed forest moratoriums.
This means no licenses can be granted for about 64.2 million hectares for two years. GAPKI needs to work with the Forestry Ministry to gain clarity on potential development areas outside designated no-go areas for oil palm plantation developments.

Fourth, foreign-based environment NGOs continue to unfairly discriminate against the palm oil industry.
There’s been no substantial campaign supported by the government to counterattack the negative campaigns, like Malaysian government does for their industry.

Fifth, there is a limited supply of high quality seeds from the government’s institutions.
Once again, our neighbor Malaysia provides more encouraging examples.

Sixth, when the companies face conflicts with local communities, the government’s help is limited. Plantation companies usually have to fend for themselves.
GAPKI needs to work with relevant government agencies formulate a new rule of engagement in dispute resolutions.

The challenge for GAPKI is to establish a framework for responsible political lobbying. It needs to rethink engagement practices that foster more cohesive public policy-making, such as igniting public debate to influence decision makers, so as to prevent unnecessary and unfair regulatory environment.

Lobbying should seek to affect public policy by providing key stakeholders, notably policymakers, with options in the policy-making process. GAPKI also needs to open and extend dialogue beyond the executive arm of government or legislators to civil society organisations and open a new chapter of relationships.

GAPKI needs to work together with relevant parties and prove that lobbying can be a legitimate and valuable part of citizens’ rights in our democracy.

Lastly, GAPKI needs to spearhead efforts to create a comprehensive and visionary blueprint for the development of sustainable palm oil in Indonesia. It needs to engage with all stakeholders, particularly multi-government agencies, the private sector as well as civil society.

It is imperative for GAPKI to build resilience against internal challenges and external threats. It needs to proactively influence government policy-making that is supportive of the palm oil industry via responsible lobbying.

Felda to talk to SC on KPF role in listing

This is written  by my colleague Zaidi Isham Ismail.

KUALA LUMPUR: Federal Land Development Authority (Felda) will talk to the Securities Commission (SC) in the next few days on how to include Koperasi Permodalan Felda (KPF) as one of the shareholders in the upcoming listing of Felda Global Ventures Holdings Bhd (FGVH).

Felda chairman Tan Sri Mohamed Isa Abdul Samad said Felda’s management would meet with the SC to discuss the next plan of action now that KPF members had agreed to take part in FGVH’s initial public offering (IPO).

“We plan to meet SC officials in the next two to three days. I don’t want to jump the gun but we will call a press conference soon,” Mohamed Isa told Business Times yesterday.

KPF was initially slated to participate in the listing but the plan was derailed by three court injunctions, which prevented the settler investment cooperative from holding extraordinary general meetings (EGMs).

The EGMs were aimed at seeking approval from its 220,000 members on either joining or not taking part in the IPO, said to be worth more than RM6 billion.

KPF owns 51 per cent of Felda Holdings but post listing, its assets will be injected into FGVH and ultimately, the cooperative will own a 37 per cent stake in the listed entity.

Mohamed Isa had said earlier this month regardless of KPF joining the IPO or not, FGVH’s listing slated for June would proceed.

But last Thurday, KPF members voted in favour of the listing of the state-linked palm oil firm, making it possible again for its direct involvement in the IPO. “Now that members have agreed, we just have to wait for the SC’s approval,” said a KPF source.

Deputy minister in charge of Felda, Datuk Ahmad Maslan, said 88 per cent of 1,250 representatives from the KPF had voted for the IPO at the extraordinary general meeting.

National Association of Smallholders Malaysia president Datuk Aliasak Ambia said under cooperative rules, a simple majority was enough for the listing to go through. “We have been keen all along to join the IPO. Only the injunctions prevented us from taking part in the IPO."

Aliasak said the meeting with the SC was to facilitate, expedite and hasten the listing so that there would not be any last-minute hurdles.

Palm oil's 'secret, bountiful yield'

JANA Miertus' eyes widened when she learnt that palm oil is the most consumed edible oil in the world, commanding 30 per cent market share. "It's certainly an eye-opening revelation," she said when briefed on the world's production, consumption and trade of edible oils by the Malaysian Palm Oil Board (MPOB) recently.

Miertus, who is from Italy, had accompanied her husband to Malaysia recently for a working visit. She is more familiar with butter, rapeseed and olive oils as staple cooking ingredients in her kitchen.

She was part of an entourage comprising participants of MPOB's programme advisory committee. This annual programme taps into the latest research and development trends provided by these international academicians.

One of the places of interest Miertus visited was Felda Group's Institute Tun Abdul Razak Research Centre in Pahang.

As the crowd of 20-odd visitors gathered around Felda Group's oil palm seed producing laboratory, a short briefing revealed that Malaysia and Indonesia produced the bulk of 55 million tonnes of palm oil consumed in more than 150 countries all over the world as cooking oil.

"Malaysia and Indonesia are really the cooking oil bowls of the world. Of the 17 major edible oils in the world, palm oil is the most popular," a Felda official said.

Citing figures from leading industry journal Oil World, he said that last year, world exports of all vegetable oils stood at 68.21 million tonnes. Of that total, palm oil accounted for 61.3 per cent of global market share while rivals like soya oil only command 10 per cent and rapeseed oil, five per cent.

He went on to explain that palm oil, which is is extracted from the fruits of oil palm trees, thrives well in the tropics where there is a lot of rain and sunshine.

An oil palm tree bears between 10 and 12 fruit bunches annually, each weighing around 25kg and containing 1,000 to 3,000 fruitlets. These fruitlets are dark purple, almost black. They turn orange-red when ripe.

Like olive, the oil palm fruit is unique in that it produces two oils. Palm oil is obtained from the fleshy part of the fruit and palm kernel oil from the seed.

Apart from Malaysia and Indonesia, oil palm trees are also cultivated in Papua New Guinea, Central and West Africa, and Latin America, all of which are developing countries in the humid tropics. "Did you know that oil palm trees are planted by some 10 million farmers across the equatorial belt of the globe?" the Felda official asked.

"The oil pressed from the fruits are processed into cooking oil and shipped across the oceans to nourish billions of people in China, India and other developing nations."

The Felda official then explained that developing nations were heavily reliant on the oil palm tree as a source of nutrition because the crop thrives in tropical climates and yields more fats and calories than other options. It gives the developing world -- where hundreds of millions of people still live on a couple of dollars a day -- the most caloric bang for the buck.

His briefing elicited nods of approval among the visiting crowd.

After lunch, the entourage made their way back to the Kuala Lumpur City Centre. 

There, they met up with Crabtree & Evelyn Malaysia marketing communications manager Teoh May May and discovered the wonders of palm oil vitamin E.

She explained that Vitamin E, an essential nutrient for the body, is made up of four variants of tocopherols and another four called tocotrienols. 

Tocopherols are mainly sourced from oilseeds such as soya oil, canola and sunflower, while tocotrienols are only found in abundance in palm oil and rice bran oil.

As one walks out into the sun, Teoh said skin cells exposed to ultra-violet (UV) rays generate huge amount of superoxide radicals in our body, causing serious damage to surrounding cells. Prolonged and extensive cell damage surface as wrinkles on the skin.

Would a regular vitamin E-enriched moisturiser help? Teoh shook her head.

"Currently, what most face creams, body butters and moisturisers in the market offer is tocopheryl acetate, a derivative of common vitamin E tocopherols. There is not much benefit. 

"The only advantage is tocopherols being a preservative for the product, increases the shelf life while allowing a claim that it contains vitamin E," she added.

"Our bestseller hand therapy range contains the active ingredient tocotrienols." She then pointed to an array of Crabtree & Evelyn moisturisers and said: "Tocotrienols are a superior form of Vitamin E that can truly boost sunscreen efficiency by reducing UV-ray penetration."

Teoh foresees that many more skincare companies will soon start to incorporate palm tocotrienols in their formulations, even though they cost up to 10 times more than tocopherols.

This is because research has proven that tocotrienols are 60 times more effective than tocopherols in protecting the skin from the damaging effects of overexposure to UV-rays, pollution, stress and smoking.

Higher allocation for oil palm smallholders

BANGI, Selangor: SMALLHOLDERS who want to plant oil palms, be it replanting or new plantings, are now entitled to a higher allocation from the government.

Those who own 40ha or less are eligible for the replanting grant. As for new plantings, the incentive can only be accorded to those who own up to five hectares in Peninsular Malaysia and a maximum of seven hectares for Sabah and Sarawak.

Previously, the government allocated RM7,000 per hectare to smallholders who plant up oil palms. This one-off grant is actually a small token of gratuity to help pay for the planting up costs.

Now, the government has raised the allocation to RM7,500 per hectare for oil palm land in Peninsular Malaysia. As for Sabah and Sarawak, it has been raised to RM9,000 per hectare.

In an interview yesterday, Malaysian Palm Oil Board (MPOB) director general Datuk Dr Choo Yuen May said: "The Plantation Industries and Commodities Minister has approved the new rate to be backdated to January 2011."

"This means smallholders who had previously been approved of the RM7,000 per hectare, allocation will now automatically be entitled to the new rate. The actual amount, whether it is RM7,500 per hectare or RM9,000 per hectare, will depend on the location of their oil palm plantings. We urge smallholders to deal directly with MPOB and not go through other government agencies," she told Business Times.

There are around 170,000 independent smallholders in Malaysia. With 700,000ha, they account for 14 per cent of the country's five million hectares of oil palm land. This year, the government expects smallholders to plant up 40,000ha, with higher yielding seedlings.

The concerted effort by the government to help smallholders replant is meant to raise the annual national oil yield, which has been stagnating at below four tonnes per hectare over the last two decades.

Choo also highlighted that smallholders who rely solely on planting oil palms are entitled to additional farming subsistence. "Smallholders who do not have any other source of income and own less than 2.5ha will also be entitled to RM500 per month subsistence for two years. This is in addition to the replanting grant," she said.

Asked if she is optimistic of smallholders achieving the 40,000ha planting target, she said there are enough high yielding planting materials to go around. "Every year, seed producers churn out some 80 million oil palm seeds a year, of which 50 million are available to local planters," she added.

Delima Oil hits record RM1b sales

This is written by my colleague Roziana Hamsawi.

MANILA: DELIMA Oil Products Sdn Bhd, a member company of the Felda Global Group recorded its first over-RM1 billion revenue last year, well ahead of its 2013 target, said chief executive officer Zakaria Arshad.

He said based on how well the company is doing in Malaysia and in its first overseas market Myanmar, he is confident that the performance can be sustained this year.

"Last year, our sales were more than RM1 billion, an increase of 17 per cent from the previous year," he told Business Times when met on the sidelines of the Malaysia-Philippines Palm Oil Trade Fair & Seminar here. The seminar was organised by the Malaysian Palm Oil Council and Malaysian Palm Oil Board.

He said Delima Oil, which entered the Myanmar market about a year ago, has todate registered sales of about US$10 million (RM30 million) and demand "in the last five months has been increasing".

With such success, Zakaria said Delima Oil is now eyeing the Philippines and Vietnam markets which will most likely see Delima Oil products on their supermarket shelves this year.

"In Myanmar we are selling our palm-oil based cooking oil, margarine and shortening and are now in final discussion to set up a bottling and packaging plant there," he said adding that the plant is a joint-venture with a local party and will cost Delima Oil about RM10 million.

He said the company is in talks with potential customers or distributors for its products in the Philippines, and may start with the Southern Philippines, due to its proximity to Sabah.

"If all goes well and our products are well accepted here, like in Myanmar we will build our own packaging and bottling plant. The next step then, is to have our own refinery on a bigger scale," he said adding that such a strategy will be emulated in Vietnam.

Delima Oil is also in the midst of negotiating with a party in Abu Dhabi to market its cooking oil in over 90 supermarket outlets there.

Back home in Malaysia, Delima Oil is adding new machinery to its refining and packaging plant in Pasir Gudang, costing about RM20 million which will cater to the production of more products, especially the high-end ones. The new extension of the plant is expected to be ready by June this year.

"Our products are doing well in Malaysia, especially our Saji cooking oil which has over 30 per cent share of the olein segment while our margarine, Seri Pelangi holds more than 50 per cent market share. But now, we want to concentrate on high-end products as they give better margins and that means, there will be better quality margarines and other cooking oils like high grade blended oil, sunflower oil and canola oil," said Zakaria.

Lam Soon: Buruh will cook up good sales in Philippines

This is written by my colleague Roziana Hamsawi.

MANILA: LAM Soon Edible Oils Sdn Bhd expects its edible oil brand, Buruh, which just entered the Philippines market yesterday, to generate encouraging sales in the first year, as it banks on the growing popularity of palm oil here.

"We are confident our cooking oil will do well, registering double-digit growth as the Philippines consumers are becoming more discerning when it comes to choosing their cooking oil," said Lam Soon general manager for export division Siew Yuen Heng.

Speaking to Business Times after the launch of the product by Plantation Industries and Commodities Minister Tan Sri Bernard Dompok at the S&R shopping store here yesterday, he said Buruh would be the only cooking oil from Malaysia being sold at S&R outlets, competing with other local brands.

"Since we first came here with our household and personal care products back in 1998, the number of Lam Soon products being sold in the Philippines has grown and our best-selling product is our powder detergent, Bio Zip," he said.

Siew added that the Philippines is an increasingly important export market for Lam Soon and he is confident that more Lam Soon products will enter the market in years to come. "Our good relationship with our distributor S&R will be the catalyst for our growth here," he said, declining to provide an estimate of the growth the company is targeting.

S&R is an upscale membership shopping store with a bulk of its products from the US. It has six outlets across the Philippines and over 180,000 members.

Siew said just as Buruh cooking oil is one of Malaysia's trusted edible oil brands, Lam Soon aims to make it a favourite here too. "Buruh Cooking Oil has been the consecutive winner of Reader's Digest Trusted Brand (Gold award) since 2006 and with its halal certification, ISO9001 and HACCP recognition, we are committed towards food safety, quality and environmental protection," he said.

S&R owner Susan Co, meanwhile, said Lam Soon products sold in her stores are selling well because of their quality and attractive packaging. "We have no doubts that this Buruh cooking oil, which is suitable for Asian cooking, especially for deep-frying multiple times will do well," she said.

Meanwhile, Dompok in his speech at the launch said Malaysia is expected to produce 19 million tonnes of crude palm oil this year and 18 million tonnes will be for the export market.

He said Malaysia has an abundant supply to meet the requirements of international markets and the Philippines, he added, is more than welcomed to increase their import. Palm oil, added Dompok, not only produces the least expensive vegetable oil, it is also the most versatile oil that can be used in various food applications and in non-food products such as oleochemicals, soaps and biodiesel.

Also present at the launch yesterday were Malaysian ambassador to the Philippines Datuk Seri Ibrahim Saad, Malaysian Palm Oil Council chairman Datuk Lee Yeow Chor and chief executive officer Tan Sri Yusof Basiron.

PM: Make plantation sector more attractive

This is written by my colleague Rozanna Latiff.

KUALA SELANGOR: PRIME Minister Datuk Seri Najib Razak yesterday called for a restructuring of the plantation sector to make it more effective, competitive and attractive to local workers.

Najib said out of some 450,000 estate workers in the country, only 83,000 or 40 per cent were Malaysians, while in Selangor, less than 4,000 out of 11,000 workers were local. "Some of the reasons that locals have shied away from working include low renumeration, poverty and widespread social problems.

"I find it unacceptable that estate workers have remained in the same situation for so many years while others prosper," he said when launching Sime Darby Bhd's Tennamaram Estate Central Housing Complex (CHC) here yesterday.

He said other companies in the sector should follow in the footsteps of Sime Darby, which saw its productivity levels increase by 10.7 per cent after raising wages for its estate workers by RM200 per month last July.

"The palm oil sector has a large impact on Malaysia's economy. With improved productivity, raising wages can be a win-win situation not only for the workers and their employers but the country as well."

Najib said the Tennamaram Estate CHC - a centralised community comprising residences, offices, public amenities and recreational facilities for some 300 workers - was a "game-changer" for the estate sector.

"While we believe in capitalism and a free economy, our philosophy has always been to practise capitalism with a heart or capitalism based on acting in the interest of the people. With upgraded housing and recreational facilities, we have been able to put into practice this philosophy in order to improve community lives in the estate."

The prime minister also announced a RM2.6 million allocation to supply clean water to the Mary and Sungai Tinggi estates.

Sime to spend RM2b on workers' housing

Sime Darby Bhd plans to spend RM2 billion in the next 10 years to upgrade its workers' housing at its oil palm estates to that of mini-townships. This is an initiative based on a better community living model comprising residences, offices, public amenities and recreational facilities clustered in one location.

By enhancing living standards of its employees at the estates, the group hopes to attract and retain more local talent. Currently, Sime Darby employs 37,000 workers at its plantations in Malaysia, of whom only 40 per cent are locals. "This Central Housing Complex is a place you could call home and not just a company's house," said chairman Tun Musa Hitam.

He was speaking to reporters here yesterday after Prime Minister Datuk Seri Najib Razak officiated at the upgrading of staff housing amenities at the Tennamaram Estate. The location is historic because Tennamaram Estate is Malaysia's first commercial oil palm estate dating back to 1917.

So far, Sime Darby spent RM37 million at this estate so that managers, executives and staff get to live in three-bedroom and two-bathroom quarters equipped with broadcast satellite television Astro. There are now more sports and recreational facilities for the enjoyment of its 300-odd staff there.

Following the successful rollout of this Tennamaram Estate pilot project, the group will now seek to upgrade more workers' quarters at another three estates this year. They are Simpang Renggam Estate in Johor, Sg Dingin Estate in Kedah and Sentosa Estate in Sabah.

As an integrated global company, Sime Darby also has refineries, specialty fats and oleochemical plants spread out in several countries to produce ingredients to make cooking oil, margarine, fruit juices and detergent.

Palm oil exports to Manila set to go up

This is written by my colleague Roziana Hamsawi.

MANILA: Malaysian palm oil exports to the Philippines have been growing at a steady rate of 10 per cent annually in the last decade. They are set to expand even more in the years to come, a trend which offers tremendous business opportunities for industry players.

Plantation Industries and Commodities Minister Tan Sri Bernard Dompok said with rising economic prosperity and improved living standards among the Filipinos, there is ample room for businesses communities of both countries to tap the oil and fats sector.

Currently, Malaysian palm oil shipment into the Philippines fulfill 90 per cent of the country’s oils and fats needs.

With the Philippines being a producer of coconut oil, there are also many untapped business opportunities to be explored for both the palm and coconut oil industries, Dompok said.

Last year, the Philippines bought 512,000 tonnes of palm oil, valued at about RM1.79 billion, from Malaysia, a significant increase of 150 per cent from 204,731 tonnes in 2010. “This signifies that Malaysian palm oil is gaining popularity there. It also stamps the status of the Philippines as a major destination for our products,” Dompok said here yesterday when delivering his keynote address at the inaugural Malaysia-Philippines Palm Oil Trade Fair and Seminar (POTS).

The Malaysia-Philippines POTS is the 24th edition of its series since its introduction in 2006. It is jointly organised by the Malaysian Palm Oil Council and the Malaysian Palm Oil Board, with the support from key players in the local palm oil industry.

Speaking to the media later, Dompok said with close to 100 million population, the Philippines, no doubt, presents Malaysia with tremendous business prospects. “We, on the government side, want to start engaging with the Philippine government in an annual consultation like what we’ve had with the Indonesians, and POTS is a good start,” he said.

He added that prospects from the Philippines will not only come from planting oil palms, but also from finished products, especially cooking oil. “Malaysian households consume 56,000 tonnes of cooking oil a month and, together with the small medium enterprises, local consumption stands at 90,000 tonnes a month. Imagine the potential here (the Philippines),” he noted.

Dompok said the current per capita consumption for oils and fats in the Philippines is only 10.5kg a year, while the world’s average consumption is 25kg per person per year. “There is scope to improve on the per capita consumption. Even if the Philippines starts to grow and increase its own production of palm oil, it would still need to import to supplement its requirements,” said Dompok.

The minister also said that his visit to the Philippines this time is to facilitate the prospects of Malaysian planters to form joint ventures with local players to cultivate oil palms in southern Philippines as the “timing is right”.

“The government will facilitate the business opportunities, like when Malaysian companies (started) going into Indonesia where we initially allowed shipment of germinated seeds into Indonesia to start up their planting … Maybe we can have this here, too.”

Dompok added that during his visits to the four provinces in Mindanao, the people there were keen on planting oil palms. He hoped the private sectors in Malaysia would take the lead in exploring this investment opportunity.

Sarawak tycoon tightening grip on Wijaya

This is written by my boss Francis Fernandez.

KUALA LUMPUR: Sarawak tycoon Tan Sri Ling Chiong Ho is planning a major move into Wijaya Baru Global Bhd. It is understood that the self-made businessman is attempting to lock up Wijaya’s landbank in Indonesia.

Wijaya’s Indonesian asset is 80,000 hectares of virgin jungle land suitable for planting palm oil. It had bought the assets last year for US$80 million (RM245 million). Business Times understands that at least one of the public-listed companies controlled by Ling had sent in proposals to help lock up the Indonesian assets.

The offer comes just weeks after Wijaya’s dominant stakeholder, Major (Ret) Anuar Adam, told Business Times that he was preparing for a corporate coup that will benefit all Wijaya stakeholders. Last year, Anuar bought a 32 per cent stake in Wijaya from Datuk Tiong King Sing at 95 sen a share.

It is understood that Miri-based Shin Yang group, one of Sarawak’s fastest growing conglomerates, is proposing a venture with Wijaya, whereby it will bear the entire cost of felling the virgin jungle as well as setting up an integrated timber complex.

Wijaya currently has a felling licence from the Indonesian government to cut down trees in the concession area before converting the area into an oil palm plantation. Under the proposal, Wijaya will have a substantial stake in the integrated timber complex. As for the trees felled, Shin Yang is proposing to pay just under US$13 (RM40) for every 30 cubic meters.

Ling controls 55.03 per cent of the public-listed Shin Yang Shipping Corp via the privately-held Shin Yang Holdings Sdn Bhd. Shin Yang owns a fleet of 285 vessels, which helped ship some 1.36 million cubic meters of timber products, its latest annual report showed.

Shin Yang group, meanwhile, owns four plywood mills in Miri. It is regarded as one of Asia’s leading exporters of wood products.

Sarawak Oil Palms Bhd (SOP), meanwhile, is proposing a joint venture to help plant the felled jungle with palm trees, a venture that could eventually cost some US$100 million (RM306 million). Ling controls 29.15 per cent  in SOP via Shin Yang Plantation Sdn Bhd. Additionally, Ling also has a 7.16 per cent direct stake in the public-listed company.

On Bursa Malaysia yesterday, Wijaya closed 2.5 sen lower to 71.5 sen with 392,400 shares traded.

Genting Plantations expands into Indonesia

KUALA LUMPUR: Genting Plantations Bhd have proposed a joint venture (JV) with two companies to develop and cultivate 74,000ha of palm oil plantation in Indonesia.

In a statement to Bursa Malaysia, the company through its wholly-owned subsidiary Sunyield Success Sdn Bhd had entered into a sale and purchase and subscription agreement with the vendor Global Agrindo Investment Company Ltd (GAIC) and the JV company Global Agripalm Investment Holdings Pte Ltd (GAIH). The agreement will involve up to US$116 million (RM355 million) cash.

Under the corporate exercise, up to US$66 million (RM202 million) would be use to acquire 495 ordinary shares of GAIH or 49.5 per cent stake from the GAIC. Meanwhile, the remaining US$50 million (RM153 million) would be used to subscribe for 371 new GAIH shares or 27.1 per cent of the enlarged share capital of GAIH.

The corporate exercise will see Genting Plantations owning 63.2 per cent in the enlarged share capital of GAIH. The proposed JV is expected to be completed by the end of second quarter this year.

Genting Plantations said the proposed JV is in line with the company's long term strategy to increase its interest in the palm oil industry as it wants to establish itself as a major player in the industry. The proposed venture will increase Genting Plantations' landbank in Malaysia and Indonesia to 239,950ha from the present 165,560ha.

JCorp still hoping to privatise QSR, KFC

PUTRAJAYA: Johor's state investment arm Johor Corp (JCorp) and CVC Capital Partners Asia III are still pursuing the privatisation of QSR Brands Bhd and KFC Holdings (M) Bhd.

In December 2011, JCorp and CVC Capital, via Massive Equity Sdn Bhd, announced their intention to buy QSR shares at RM6.80 each and RM3.79 per warrant. They also offered RM4 per KFC share and RM1 per warrant.

"This is a complex buyout. It has taken longer than we anticipated as there are many parties involved. We need to abide by listing rules as it involves three listed entities; QSR Brands Bhd, KFC Holdings Bhd and Kulim (Malaysia) Bhd," said president and chief executive officer Kamaruzzaman Abu Kassim.

JCorp owns 55.9 per cent of Kulim, which in turn has a 53.9 per cent stake in QSR. KFC is a 51 per cent unit of QSR.

"The discussion is very much in progress. Unless and until a definitive agreement is signed, then only the various extraordinary general meetings can be called for the respective shareholders to vote on," he told reporters at a media briefing here yesterday. "We hope to seal the definitive agreement soon ... God willing, by this year," he added.

Asked if the United States-based Yum! Brands Inc, the licensor and owner of the KFC and Pizza Hut brandnames is happy with the privatisation plan, Kamaruzzaman replied, "They understand our proposal and are assured of further growth in the business. In fact, Yum! Brands sees this region as one of their most profitable."

"We entered the quick service restaurants business in 2006 (through Kulim's investment in QSR) and since then, there has been tremendous growth in revenue and profits," he said. "There is room for growth as this business stretches beyond Malaysia, Brunei and Singapore to Cambodia and India," he added.

To another query on JCorp's financial health, Kamaruzzaman replied: "Our debt to asset ratio is 0.72 times. The market no longer speculates on JCorp's solvency."

He went on to say JCorp will issue a RM3 billion sukuk wakallah with maturities stretching from five to 10 years to redeem existing bond obligations amounting to RM3.2 billion, which will expire on July 31, 2012. "This is not a re-financing move, it will be a new issuance. There will be a public offering through a book building process. We hope to issue the first tranche of the Sukuk Wakallah next month," he said.

Asked if part of the proceeds of the new sukuk issuance would go to finance the privatisation of QSR and KFC, Kamaruzzaman replied, "No, the privatisation is an independent exercise. It doesn't affect our impending sukuk issuance."

JCorp performed very well last year, raking in RM1.1 billion in net profits on RM7.8 billion revenue. "Our sterling results were contributed by improved earnings in plantation, healthcare, property, food and intrapreneur ventures."

Oil palm plantings make up 58 per cent of JCorp's profits. In view of strong crude palm oil prices trading at around RM3,500 per tonne, Kamaruzzaman said JCorp was confident of sustaining its strong profits this year.

'Palm oil industry not a threat to orang utans'

This is written by my colleague Bilqis Bahari.

ORANG utan, a great ape species and one of Malaysia's darling icons, has been at the centre of the most debated issues among the local palm oil industries as well as local and western non-governmental organisations (NGOs).

Efforts have been made by the local palm oil industry stakeholders and local wildlife departments and NGOs such as Malaysian Palm Oil Council (MPOC) and the Sabah wildlife department to protect the orang utans as well as to attest to the Western Environmental NGOs (WENGOs) of their claims that the local palm oil industry is threatening the survival of the orang utans.

MPOC chief executive officer Tan Sri Yusof Basiron told Business Times in an exclusive interview that the council has set up Malaysian Palm Oil Wildlife Conservation Fund (MPOCWF) in 2006 for the local palm oil industry to actively participate in the conservation of wildlife biodiversity in Malaysia.

He added that the MPOCWF was set up partly in response to the many, often unfounded accusations from WENGOs that the palm oil industry was on a blatant path of destruction.

MPOCWF has a revolving fund of RM20 million, with half of the amount being contributed by the government and the other half from the industry, pulled out of MPOC's own reserves, he said.

The creation of the fund has allowed the MPOC to directly negotiate with interested parties that are able to bring the required expertise and propose meaningful studies and actions.

"We hope in the long-term these could allow the harmonised and caring existence between the palm oil industry and fulfills the need to maintain and preserve conservation of both flora and fauna throughout our country," said Yusof.

Some of MPOCWF's initiatives include undertaking a survey of the orang utan population in Sabah. The survey was completed and allowed MPOC to map out many of their dwelling sites and ascertain their numbers. The survey was done with Sabah Wildlife Department, the French NGO Hutan and Borneo Conservation Trust.

A grant was given to the Malua BioBank in Sabah to undertake studies on wildlife and potential conflict with forested areas and fringes of oil palm plantations.

MPOCWF funded test rope bridges within Malua to see if orang utans in the wild are capable of using man made bridges aimed at functioning as corridors connecting to the isolated populations.

MPOCWF, along with Sabah Forestry Department, has helped establish an active jungle patrol to monitor and act against poaching of protected wildlife. The fund was used to work with Sarawak Forestry Cooperation to monitor wildlife especially orang utan in several protected areas in Sarawak that share common boundaries with oil palm plantations.

MPOCWF also provided funds for the orang utan infant care unit in Bukit Merah, Perak, which has helped to ensure better survival of orang utan infants born within the facility.

Yusof said that the most important thing is there is interest, especially from overseas conservation research centres wishing to use the facility for orang utan related research. State authorities have a record of active partnership with international and local NGOs.

"When an interest is generated, we sit with all parties proposing such ideas and work towards the proposed objectives. In this way, we succeeded in bringing to the table a large range of expertise. Our current model of multiple party engagement for the project we funded is beginning to generate the right output and help increase an awareness about all conservation efforts, in general," he said.

MPOCWF is not just a corporate social responsibility (CSR) project for MPOC. In reality it goes beyond CSR, said Yusof, adding that MPOC is keen to understand how the oil palm plantations have impacted the overall conservation landscape.

By such enhanced knowledge, he said, it is able to interact more meaningfully with the local industry players. "Our involvement has allowed the industry to become more active in these areas and we continue to encourage them to become partners in some areas where we undertake the conservation projects," he said.

He added that there are many palm oil firms that have taken their own conservation efforts and financing such efforts. The most visible of such activities is through the Yayasan Sime Darby. "Many other examples are already obvious. Funding is not just confined to orang utans. You know of funding to save rhinoceros, proboscis monkeys, tigers, elephants, hornbills and sun bears," he said.

The local palm oil industry has received many unfavourable comments and criticisms, especially from WENGOs on the industry's impact on wildlife. Campaigns such as "Don't palm us off" by Australian zoos has shed a bad light on the palm oil industry.

Speaking on the many allegations that WENGOs have made to the local palm oil industry, Yusof said the industry stakeholders need to continue dialogues with all parties concerned. "We cannot accept when overseas rule makers are emotional and more interested in delivering only emotional statements that will only please their own constituents."

"We are simply asking for a level playing field. Meanwhile, out of MPOC, we will engage the many channels and convey the truth about palm oil," he said.

 'Most stable, viable population in the world'

KUALA LUMPUR: Sabah has about 11,300 orang utans, while in Sarawak the numbers are estimated at about 2,000. The Malaysian Palm Oil Council (MPOC) believes that this group could develop into the most stable and viable population in the world. Orang utan is found only on the islands of Borneo and Sumatra.

According to the Orang Utan Action Plan (2012-2016), which was developed by Sabah Wildlife Department, orang utan distribution and abundance decline is directly attributed to recent and drastic habitat losses mainly due to the conversion of large expanses of orang utan habitat to oil palm plantations and other crops.

The action plan also stated that other immediate threats include habitat degradation due to unsustainable and/or illegal logging practices, various forms of encroachments with protected forests, fires and poaching or killing.

According to MPOC chief executive officer Tan Sri Yusof Basiron, currently much of the local orang utan conservation efforts are managed in Sabah and Sarawak. MPOC is actively working with the state wildlife departments since the latter are responsible and guardians of all the wildlife in these states.

The feel-good oil

A natural oil from a fruit with lots of health benefits, palm oil is one of the best gifts to us from Mother Nature, writes Tan Bee Hong.

PALM oil, produced from the fruit of the oil palm (Elaeis guineensis), contains a variety of fats, vitamins and nutrients, with no unhealthy trans-fatty acids that is mainly found in hydrogenated oils.

Palm oil is free of artery-clogging trans-fats as it is made up of a mixture of fatty acids and contains valuable vitamins and nutrition that our bodies need. It is rich in phytonutrients such as natural carotenes, tocotrienols and tocopherols (Vitamin E) and co-enzyme Q10.


Studies on the health benefits of palm oil show it has anti-cancer properties and the fatty acids of palm oil can inhibit and/or delay experimental carcinogenesis.

In the United States, Dr Paul Sylvester, Professor of Pharmacology and director of Graduate Studies and Research at the College of Pharmacy, University of Louisiana, has conducted studies that demonstrated the anti-cancer effects of dietary palm oil (Sylvester et al., Cancer Research 46:757, 1986).

“In these studies, we investigated the effects of different types of high fat diets on mammary tumour development and discovered that nearly all of the different high fat diets were found to stimulate tumour development regardless of whether the diets were formulated with different animal versus vegetable fats or saturated versus unsaturated fats,” said Dr Sylvester who has been researching on the health benefits of tocotrienols for nearly 25 years.

“The notable exception to this finding was the observation that high dietary intake of palm oil suppressed carcinogen-induced mammary tumourigenesis in experimental animals. Palm oil differs from other animal and vegetable fats in that it naturally contains high levels of tocotrienols.”

The findings were confirmed in subsequent studies that showed carcinogen-induced mammary tumour incidence was lower in rats fed high palm oil diets as compared to rats fed diets high in other dietary fats, he said, adding that palm oil diets stripped of tocotrienols were found to enhance mammary tumorigenesis in rats.

There has been a massive amount of evidence that further characterised the anti-cancer action of palm tocotrienols. It is now well-established that tocotrienols, in contrast to tocopherols (the more common form of vitamin E), display potent antiproliferative and cytotoxic activity against a wide range of cancers at treatment doses that have little or no effect on normal cell growth and function.

Dr Sylvester said it has also been established that combined treatment of palm tocotrienol with other traditional chemotherapies very often results in a synergistic inhibition in cancer cell growth and viability. Since combination therapy of tocotrienol with other chemotherapeutic agents requires significantly lower treatment doses to suppress cancer cell growth and survival, an additional benefit can also be realised in a corresponding reduction in adverse side effects and toxicity characteristically associated with high dose chemotherapy.

Recent studies in the areas of tocotrienol kinetics have provided essential information required for understanding the therapeutic limitations of oral administration of tocotrienols.

Intensive research into the health benefits of palm oil also show that it helps in the reduction in the risk of arterial thrombosis and atherosclerosis, inhibition of cholesterol biosynthesis and platelet aggregation, and reduction in blood pressure.

In a study comparing palm, soya bean, peanut oils and lard, researchers in China found that palm oil actually increased the levels of good cholesterol and reduced the levels of bad cholesterol in the blood (Zhang et al. 1997).

According to the book, The Palm Oil Miracle by Dr Bruce Fife, benefits of palm oil include, apart from those mentioned earlier, better eye health, immunity boost, better blood circulation, improved nutrient absorption, strengthens bones and teeth, and protects against mental deterioration.

People have been using palm oil for cooking for thousands of years. Today, it is used all over the world as cooking oil as well as in the production of a huge variety of food products.

Because palm oil is naturally semi-solid at room temperature, it does not require hydrogenation, making it a good replacement for partially hydrogenated oils. It provides the same “hard or solid” fat needed to produce pastries, cookies and other food items that require long shelf stability and a particular texture.

Professor Yuen Kah Hay of Universiti Sains Malaysia is presently conducting a study to assess the neuro-protective, anti-atherogenic and hepatoprotective properties of tocotrienols (palm vitamin E) supplementation as determined by white matter lesion load on serial magnetic resonance imaging (MRI), carotid artery magnetic resonance angiography (MRA) and liver ultrasound (US) as well as lipid profile analysis.

He says: “The results are very encouraging. This is the first study to show that in humans. Tocotrienols is a supplement, not a drug, so it can be taken as a daily dietary supplement for neuroprotection.”

He and his team found that there was regression of white matter lesion load in terms of numbers and size in the brain (time frame: 1-2 years). Secondary results include regression of the carotid artery stenoses in terms of percentage and an improvement in liver echogenicity.

Vitamin E, an essential nutrient for the body, is made up of four variants of tocopherols and another four called tocotrienols. Tocopherols are sourced from oilseeds such as soya oil, canola and sunflower, while tocotrienols are only found in abundance in palm oil and rice bran oil. What can tocotrienols do that tocopherols cannot?

Tocotrienols inhibit cholesterol production in the liver, thereby lowering total blood cholesterol. Alpha tocotrienol suppresses hepatic HMG-CoA reductase activity that results in the lowering of LDL cholesterol levels. Tocotrienols, which are naturally occurring in palm oil, have been shown to suppress lower plasma cholesterol in humans.

A study showed that patients with confirmed carotid arteriosclerosis, who consumed 240mg of palm based tocotrienols per day for 18-36 months, had a decrease in the amount of cholesterol plaque in their carotid artery while those receiving placebo did not show such an effect.

Palm oil tocotrienols has been shown to inhibit human breast cancer cells. Delta-tocotrienol was found to be the most effective tocotrienols in inducing apoptosis (cell death) in human breast cancer cells and Gamma-tocotrienol is three times more potent in inhibiting growth of human breast cancer cultured cells than Tamoxifen.

Alpha-tocotrienol has been shown to be 40-60 times more potent than alpha-tocopherol as an antioxidant.

In a test on rats, palm gamma-tocotrienol shows the ability to prevent development of increased blood pressure in Spontaneously Hypertensive Rats (SHR) after 3 months of supplementation.

Boustead banks on 'super trees'

KUALA LUMPUR:  BOUSTEAD Holdings Bhd, which derives 40 per cent of its group profit from planting oil palms, is banking on "next generation super trees" and clonal materials to raise its oil yield by at least 15 per cent to 300,000 tonnes in three years, says deputy chairman and group managing director Tan Sri Lodin Wok Kamaruddin.

"We're unlocking the value of our oil palm plantations through strategic breeding of hybrids and clones," he told reporters after the company's shareholders meeting here yesterday.

At prime fruit-bearing age, these next generation super trees, grown under good management and environment, are capable of producing more than 35 tonnes of fresh fruit bunches with over 23 per cent oil extraction rate. That works out to be about nine tonnes of oil per hectare in a year, or more than two times higher than the country's average yield.

Lodin said his plantation team will now accelerate replanting of aging trees with these super hybrids and clones supplied by its associate, Applied Agricultural Resources Sdn Bhd (AAR). 

AAR, an equal joint venture between Boustead Plantations Bhd and Kuala Lumpur Kepong Bhd (KLK), had started breeding the hybrids on experimental plots in the last 25 years.

What separates AAR from its bigger and financially stronger rivals, like Felda Agricultural Services Sdn Bhd and Sime Darby Seeds & Agricultural Services Sdn Bhd, are its super-oily fruits and compact oil palms that allow for higher density planting. "Previously, we have been planting 136 trees per hectare. Now, when we replant, we'll increase that to between 148 and 160 trees." 

At the AAR tissue culture laboratory in Ijok, Selangor, scientists carry out cloning where shoots of the chosen oil palm trees are spliced, cultured and grown in test tubes. These shoots grow up to be identical to the "parent" tree.

"Over the years, KLK and our group have invested heavily in oil palm breeding and cloning," Lodin said. The semi-clonal seed production technology ensures consistent quality in every seed. 

"We've started high density replanting in 2008. As the first planting batch bear fruits this year, we expect to harvest and mill 260,000 tonnes of oil. As we engage AAR's expertise in best agronomic practices and fertiliser optimisation, we're quite optimistic of harvesting 300,000 tonnes of oil by 2015 from the same planted area," he added.

At the same time, Boustead is also improving harvest productivity by providing its workers with motorised sickles and pocket-sized diamond blade sharpeners. 

"We're hopeful of good profits again this year if palm oil prices continue to trade at buoyant levels," Lodin said. Yesterday, the third-month benchmark crude palm oil futures on Bursa Malaysia closed RM28 lower at RM3,576 per tonne.

Boustead also expects higher contribution from its shipbuilding division, he said. According to a filing to Bursa Malaysia yesterday, the group's unit, Boustead Naval Shipyard Sdn Bhd, has awarded Boustead Heavy Industries Corp Bhd RM1.53 billion worth of jobs on littoral combat ships. The contracts entail engineering and integration works in connection with the DCNS Setis Combat Management System, procurement of the CMS and the Rheinmetall Fire Control System.

On Boustead's capital expenditure for the year, Lodin said the group has set aside RM1.3 billion, of which the bulk of it, amounting to some RM400 million, will go to land acquisition for property development.

Finding vitamin E's anti-cancer properties

This is written by my colleague Tan Choe Choe.

KUALA LUMPUR: A GROUP of researchers is  embarking on a clinical trial on breast-cancer patients to find out if the vitamin E extracted from palm oil is an effective anti-cancer agent.

The research is led by Professor Yip Cheng Har and her team of researchers at University of Malaya Medical Centre, together with Associate Professor Nur Aishah Mohd Taib, and in collaboration with Dr Kalanithi Nesaretnam and her team of scientists at the Malaysian Palm Oil Board (MPOB).

Vitamin E, an essential nutrient for the body, is made up of four variants of tocopherols and another four called tocotrienols.

Tocopherols are sourced from oilseeds such as soya oil, canola and sunflower, while tocotrienols are only found in abundance in palm oil and rice bran oil.

The majority of research on vitamin E has been focused on alpha-tocopherol, which is the vitamin E widely used as a supplement in the market now.

But Malaysian researchers, chiefly from MPOB, have been studying palm tocotrienols since the 1980s and their research into the medical effects of tocotrienols, which focused mainly on breast cancer, has showed promising results in breast cancer cell lines and in animals.

And recently, studies in the laboratory on the different variants or isomers of the tocotrienol (alpha, beta, gamma and delta), showed that the gamma and delta forms in particular, seems more potent as an anti-cancer agent.

"However, just because a product works in cancer cells and in animals, it does not mean that it will work in human, since a human is more complex," said Nur Aishah.

But the studies are promising enough to warrant a clinical trial on human subjects on the full effects and efficacy of the gamma-delta tocotrienols (GDT).

"We want to assess whether the GDT has any significant side effects and if it has an anti-cancer effect.

"We are doing this study on women with advanced breast cancer, who have no other options of treatment, that is, they have no more chemotherapy to take, or they have refused any further treatment," said Nur Aishah.

The study, which is pending the recruitment of volunteers, has received a research grant of RM2 million from the Performance Management and Delivery Unit last November, to be disbursed through MPOB. The clinical trial is expected to be completed in five years and some 300 volunteers will be needed.

"If the trial shows that GDT has a significant anti-cancer effect in women with advanced breast cancer, it will benefit these women who may not be suitable for more rigorous therapies like chemotherapy. 

"We will continue to test this drug in another situation, perhaps as a follow-up therapy in women after the treatment for breast cancer," she added.

Tocotrienols have been stirring quite a rage of interest in the scientific community in recent years. Today, it accounts for nearly 30 per cent of all research in vitamin E.

Malaysia is the world's biggest tocotrienol producer and exporter. A kilogramme of palm oil vitamin E retails at US$500 (RM1,500). Annually, Malaysia exports some RM50 million worth of palm oil health supplements to Europe, the United States, Canada and Japan.

KL may export more CPO after Jakarta tax review

BANGI, Selangor: Malaysia is likely to export more crude palm oil (CPO) this year as the recent review of Indonesian palm oil taxes has caused refiners here to lose money.

Since October 2011, the Indonesian government has widened the export tax gap between CPO and refined products drastically to boost refining capacity and downstream activities. As a result, CPO and crude palm kernel oil became very cheap for downstream producers there.

Malaysian refiners have started to concede global palm oil market share to Indonesia. This is pushing more palm oil stocks to Malaysia.

This year, the Malaysian Palm Oil Board forecast palm oil output to top 19.3 million tonnes, two per cent more than last year's 18.9 million tonnes.

The industry regulator estimated that there will be more CPO to process as more trees come into maturity and bear more fruits. But refiners in Malaysia lose money when they run their factories in this kind of uncompetitive environment.

The backflow effect of refiners slowing their uptake of CPO from millers is now slowly, but surely, causing a build-up in stocks.

LMC International Ltd chairman Dr James Fry said: "Malaysian exporters have adapted to the Indonesia moves in the short run by raising CPO exports."

This is possible because so far, the Plantation Industries and Commodities Ministry has allowed a duty-free quota of three million tonnes of CPO for the year, Fry said when presenting his paper - "Indonesian Export Taxes since September 2011: Malaysia's Policy Options" - here yesterday.

On paper, Malaysia's CPO export tax is highly prohibitive. At 30 per cent, no one wants to ship out CPO unless they are granted duty-free quota by the government.

Last month, London-based Godrej International director Dorab Mistry expressed similar views. He reportedly said the drastic widening of the export tax gap between CPO and refined products to boost refining capacity and downstream activities in Indonesia has resulted in the republic grabbing market share from Malaysia.

"Malaysia's palm oil stocks are not declining. What could happen in the months ahead is Malaysia can either become a CPO exporter or the government could copy the Indonesian export tax regime," Dorab said.

When contacted, a senior official with the Plantation Industries and Commodities Ministry replied that there has yet to be any applications for additional export quota for duty-free CPO.

Asked if the government would raise the quota if planters request to ship out more duty-free CPO to prevent overflowing in storage tanks at the mills, the official said: "We will do what is best for all stakeholders throughout the value chain."