Wilmar Expands in Europe With Palm-Oil Refining, Alcohol Plant

10/05/2011 (Bloomberg) - Wilmar International Ltd. (WIL), the world’s biggest palm-oil producer, will partner with a rival to refine and sell cooking oil in Europe, seeking to ease its reliance on China.

Wilmar, based in Singapore, will supply refined palm oil from New Britain Palm Oil Ltd. (NBPO)’s farms in Papua New Guinea and the Solomon Islands, the two companies said in a statement today. Separately, Wilmar said it also plans to build a natural-alcohol plant in the Netherlands.

The European expansion comes after more than six months of Wilmar being told by the government in China, its biggest market, to cap cooking oil prices to rein in food inflation. Wilmar’s oilseed and grains unit posted a $173.2 million loss last year mostly because of the caps, which made retail oil cheaper than bulk.

“Wilmar’s always been interested in expanding its presence in Europe and this certified oil is a step forward,” said Ben Santoso, an analyst with DBS Vickers Securities Pte. “Europe needs an alternative to rapeseed oil.”

Wilmar rose 0.6 percent to S$5.15 at the end of trading in Singapore. The stock has declined 8.5 percent this year, compared with a 1.7 percent drop in the key Straits Times Index.

Biggest Market

Europe accounted for 7.2 percent of Wilmar’s $30.4 billion in sales last year, while China contributed 52 percent. Wilmar also refines sugar and has its own palm plantations, as well as a biodiesel manufacturing business.

“We look forward to being more involved in the local chemical community and strengthening our foothold in Europe,” Wilmar Chief Executive Officer and Chairman Kuok Khoon Hong said today in the statement, referring to the alcohol plant.

 

According to Wilmar’s partnership with New Britain, oil- palm fruits grown at the London-listed company’s certified sustainable plantations will be processed by Wilmar in Germany and jointly marketed. Wilmar’s plant in Germany will begin palm oil refining from the middle of next year, producing as much as 300,000 metric tons of the product per year.

Europe each year buys about 5 million tons of palm oil, which is used to make bread, cereals, margarine and lipstick, Wilmar said.

The company’s natural alcohol plant will be built near the port of Rotterdam jointly with Salt Lake City, U.S.-based Huntsman Corp. (HUN), it said in a statement today. The factory is due to come on stream in 2013. 

Europe Palm Oil Market

 

Indonesia To Set-up Green Palm Body in May

03/05/2011 (Reuters) - Indonesia will form a body to manage, monitor and clarify its mandatory green palm oil industry scheme within two weeks, an agriculture ministry official said.

The agriculture ministry said last month that it planned to issue Indonesian Sustainable Palm Oil (ISPO) certification to cover the entire operations of planters amid pressure from green groups to halt deforestation.

In January, Indonesia, the world's top palm oil producer, said it would trial its ISPO certification, covering the operations of planters.

"We have been appointing a team to prepare the formation of the ISPO organization," Gamal Nasir, director general of plantations at the ministry, told Reuters.

"We hope the team can accomplish their task -- to form the organization -- in one to two weeks from now."

Gamal added that the government would appoint an ISPO commission, consisting of officials from government institutions and ministries, palm oil associations and NGOs.

The ISPO commission will manage the certification system, and be tasked with giving ISPO approval and recognition to plantation companies being managed in a sustainable manner.

Such firms should also be co-operating with both local and international bodies that encourage sustainable palm oil, he added.

The Roundtable on Sustainable Palm Oil (RSPO), which groups planters, green groups and consumers, is the only other major group to have set up green standards for the whole industry.

But unlike RSPO, which does not impose sanctions on members that violate its voluntary standards, those found to be breaking ISPO rules will be punished by law, a ministry official said in November.

Earlier this year, the new secretary general of the RSPO described the ISPO as "excellent" and said it would compliment the RSPO.

Some major palm oil consumers such as Unilever (UNc.AS) stopped buying palm oil from Indonesian firm SMART because of concerns over deforestation, while a planned Indonesian moratorium on new permits to clear forests may slow industry expansion.

Sustainable Palm Oil