Notes on MPOB’s PIPOC in Malaysia October 6 – 8th, 2015
The excellent MPOB’s international palm oil congress (PIPOC) attracted about 8,000 to the KLCC in central Kuala Lumpur this month. I was honoured to be asked to speak again after my last appearance there in 2011.
This being Malaysia and Palm Oil, the event was a big deal. Oil palm represents about 6% of Malaysian GDP, over 60% of exports and an employer of over 600,000 people. The industry is a key driver of the country’s ongoing transition to beyond emerging market status. The event was attended and opened by the Minister of Planation Industries and Commodities, Malaysia, YB Datuk Amar Douglas Uggah Embas. Numerous members of government and ambassadors to Malaysia attended the opening ceremony.
The six plenary lectures in the opening session set the tone for the entire event and took place in front of an attentive crowd of around 2,500. Here a few comments and my take on each:”
Carl Bek-Nielsen, CEO of United Plantations Berhad opened with a talk on sustainability in the oil palm business. A remark which has stayed with me is the following “Like it or not, the proboscis monkey and the orangutan are the stars of the jungle. They are Angelina Jolie and Brad Pitt”
What on earth does he mean by this? Clearly, no matter what you think, everybody loves Angelina and Brad, just like they love the orangutan and the monkey. So if you ran a palm plantation in Angelina’s back garden, your every move would be scrutinized and, likely criticized if you disturbed her or kept the kids awake at night. So too with your plantation in the orangutan’s garden. You’re not going to change this so be above reproach in your conduct of business and be ready to call out any of your peers that you see doing something that may not meet the “Angelina’s garden” test. Think about it. A simple message, put very powerfully. Personally, I am not hugely impressed by Angelina or Brad as actors. Their reputation in my view, somewhat outstrips their talents. But what I think on this matter does not count much against the collective tastes of the readers of People Magazine for example. Are you getting Carl’s message? Your customers’ customers don’t read ICIS Chemical Business. They read People Magazine, which not only covers Angelina but the orangutan also.
Following Carl’s call to the industry, Dr. Choo Yuen May, Director General of the MPOB outlined MPOB’s cutting edge work in genome technology as applied to the palm tree. Attendees at my surfactant conferences will already have heard all about this from MPOB speakers. This mapping of the genome and subsequent work on figuring out how to optimize productivity of the plant has already yielded huge results in yields and tree life-cycles. No doubt much more progress to come as this work continues deep inside the genetic material that makes a palm tree a palm tree.
I took the third slot with a talk on the future of the oleochemicals industry. As most of the attendees were clearly not involved (at least directly) in oleochemicals, I wondered how this would go, especially as cups of Malaysian tea started to beckon outside around midway through the session. My point was that we are going to be living in a resource rich world for the foreseeable future and so producers of palm oil and oleochemicals need to invest in intellectual capital in order to specialize and add applications value, otherwise they will be condemned to suffer at the hands of low margin, oversupplied and volatile commodity markets. One kind audience member tweeted that my talk was “TED-Like”. I’ll take that as a compliment.
After tea, we got deep into the science, with a talk from the National Institute of Nutrition and Food Safety of China. Summary: Palm oil is good for you and not only that, but the fact needs to be more widely recognized. Don’t let my trite summary fool you. This was a deeply academic paper and summarized real world results from the use of red oil enriched biscuits in the China public school system. Worth taking note by opinion makers in our diet obsessed nation (the USA I’m talking about). A minor diversion, but this reminds of Stephanie Faul’s excellent book the “Xenophobe’s Guide to the Americans” which my parents bought me shortly after I settled in the US. The section on food opens with the classic sentence “Americans approach every meal in terror that the food will leap up off their plate and kill them or, worse, make them fat.” True, but in the case of palm oil, not an issue and indeed the opposite may prove to be true.
Following were two excellent papers, one dealing with the internationalization of the malysian palm oil business, a topic we have addressed recently in our surfactant series. The other, by the inestimable Jim Fry of LMC International covered his enormous insights into the link between crude oil and palm oil, how it arose and how it will be the major determinant of palm oil pricing into the foreseeable future. By the way, I have to let you know that Yu Leng Khor will be unveiling some huge new insights in the area of feedstocks for our surfactant conference in Singapore, coming up in November.
Wrapping up the first day, a panel discussion left a deep impression on me regarding what is happening on the collective psyche of the oil palm industry. Dr. Makhdzir Mardan of the Malaysian Palm Oil Association gave an impassioned defense of what the industry has done in terms of sustainability and an equally impassioned plea to consumer goods to “put their money where their mouths are!” (my words, paraphrasing his more eloquent exposition). In short, his point is that the big CPG companies are quick to preach and demand (selectively he adds) sustainability upstream in their supply chain, but will not share the cost on anything like an equitable basis. Savvy CPG Marketing? Sharp-elbowed business practice? Hypocrisy? Maybe a bit of all three.
So in summary, we heard:
- Conduct business like you’re in Angelina’s back garden.
- Genetic engineering is a huge key to future palm development
- Specialise and add value or get whipsawed
- Palm oil is good for you
- It’s also increasingly global
- And increasingly linked to crude oil
- And finally, the upstream is starting to fight back!
After that, we got into two solid days of conferences on a number of tracks. I was very pleased to chair the final session of the oleochemicals track and made some great contacts there. Thanks again to the MPOB organisers .
If your interests are rooted in the palm plantation and extend out as far as surfactants, like me, then I hope to see you at my 5th Asian Surfactants Event in Singapore, November 19 – 20th.