WORMERVEER, Netherlands — IOI Loders Croklaan has partnered with Kerry Group, Wild Asia and the Fortuna Palm Oil Mill in Sabah to implement a 3-year Small-Growers Support Program. This program supports the inclusion of smallholders into IOI’s supply chain and will boost small farmer’s (farm size between 0 to 500Ha) productivity by helping them implement sustainable agricultural practices. It also guides IOI’s directly sourced 3rd party supplying mills in achieving staged compliance to IOI’s Sustainable Palm Policy and helps them prepare for certification requirements. Wild Asia is the implementation partner for the program that will be managed by both Kerry Group and IOI Loders Croklaan.
“We have a few potential participating non-RSPO certified mills in the Telupid, Beluran and Kinabatangan landscape (Sabah) with approximately 5000 smallholders and small growers. We start with one mill – Fortuna – and will increase the number throughout the duration of the program,” said Ben Vreeburg, Sustainability Director at IOI Loders Croklaan. “Smallholders will see a decrease in FFB (Fresh Fruit Bunch) production costs in the 1st year and a gradual increase in FFB yield in the 2nd year. Through this program millers are ensured of a steady supply and better control of FFB and a higher extraction rate.”
40% of the total worldwide palm oil production is ultimately provided by smallholders. They play a critical role in the palm oil supply chain. “If you look at the palm oil yield, there are still large variances between the yield of smallholders and big plantation companies,” explains Vreeburg. “You could increase FFB production up to 50% without any new developments if you increase the current yield of smallholders. Helping smallholders to get good sustainable manufacturing practices in place will increase their productivity and further lift them out of poverty.”
The program is designed to help Kerry work more collaboratively with its suppliers, Maarten Butselaar, Responsible Sourcing Manager at Kerry Group, explains: “As a buyer of palm oil we have limited interaction with mills or palm growers, so we rely on our supply partners to help meet our sourcing commitments. This partnership gives us a more direct influence on practices at mill and farm level in the project area. Alongside our broader requirements on palm oil, the program aims to deliver a positive impact for communities and workers within our supply chain.”
About IOI Loders Croklaan
IOI Loders Croklaan is a leading producer and supplier of premium quality oils and fats for the food manufacturing industry around the globe. Its products are used in a wide range of applications, from bakery and confectionery to dairy fat alternatives and infant nutrition. IOI Loders Croklaan is dedicated to sustainable practices in all aspects, from choice of raw materials to building a transparent and sustainable supply chain. Their efforts and progress are publicly reported via their online palm oil dashboard. The company works closely with its customers to develop tailored solutions.
About Kerry Group
Headquartered in Ireland, Kerry Group provide the largest, most innovative portfolio of Taste & Nutrition technologies and systems and Functional Ingredients & Actives for the global food, beverage and pharmaceutical industries. Our consumer foods division, Kerry Foods, is also a leading consumer foods processor and supplier in selected EU markets. IOI Loders Croklaan is a supplier of Palm Oil to Kerry.
About Kilang Kelapa Sawit Fortuna Sdn. Bhd
Kilang Kelapa Sawit Fortuna Sdn. Bhd is a palm oil mill based in Beluran, Sandakan, Sabah. Their business activities include the cultivation, harvesting and processing of palm oil fruits into Crude Palm Oil (CPO) and Palm Kernel (PK). The company is also involved in the manufacturing of pelletized bio-organic chemical fertilizers for the palm oil industry. Fortuna is a direct supplier of Crude Palm Oil to the IOI Group.
About Wild Asia
Wild Asia is a not-for-profit social enterprise that was founded in Malaysia. Wild Asia’s goal in palm oil is to “increase the growth of traceable and certified palm oil”. Wild Asia pioneered a scheme for small palm oil producers through a program called Wild Asia Group Scheme for Small Producers or WAGS. WAGS was created to address the challenges faced by independent small farmers by providing the necessary technical assistance, training and capacity building for small farmer groups. The focus is to help them improve their farming practices and support them towards reaching international standards (for example, RSPO).