African palm oil producer Siat Group is set to get its Ghanaian output certified as sustainable by early next year, the Brussels based firm has said.
The Roundtable on Sustainable Palm Oil (RSPO), an industry body of consumers, green groups and plantation companies, was formed in 2004 and aims to promote growth and use of sustainable oil palm products.
Annual production capacity of RSPO-certified sustainable palm oil jumped over the 3 million tonnes mark last month, according to the Roundtable. Certification for green palm oil started in August 2008. [ID:nSGE62E0N0]
“In Ghana we expect to be certified in January 2011 … we have submitted our files to the RSPO board and they are hopefully going to approve it in Jakarta,” Gert Vandersmissen, group director of operations for the Siat Group, told Reuters.
Vandersmissen, who is currently the alternate member for the rest of the world group on the RSPO board, was speaking ahead of the RSPO’s annual meeting in Jakarta from Nov. 8-11. The company, which has palm oil plantations in Ghana, Nigeria and Gabon, produces about 50,000 tonnes per year.
Siat’s customers include Unilever and Nestle:
“We are planting every year in every country where we are, we’re planting something like a thousand hectares a year,” Vandersmissen said. “The world population will not go down … there is already a (palm oil) shortage.” Palm oil is used in products such as food, cosmetics and biofuels.
Golden Agri-Resources the second-largest plantation company listed in Singapore, and the world’s biggest listed palm oil firm, Wilmar are looking to develop land in Africa. Established 1991, Siat has invested about 130 million euros in its African palm oil plantation business.
“We know that it takes seven years before we get something back from our investment,” he said. “It is an investment over a generation — we have a 20 year business plan. “We are planting in area that has already been de-forested before by loggers followed by traditional slash and burn farming techniques.”
Vandersmissen said the advantages of producing African palm oil for African consumers, is that it keeps transportation costs down at a time when there is a shortage in the region, which also pushes prices higher than in Asia. Malaysia and Indonesia account for around 90 percent of the world’s supply of palm oil.
“The advantages are the shortages, so we always have a market for our product,” he said. “Secondly, if they want to import, it has to be transported and some countries have import taxes.” “We sell our oil here at much better prices than the world market price,” he added.
Vandersmissen said that Africa imports more than 2 million tonnes of palm oil every year. This compares with about 8 million tonnes in India and 7 million tonnes in China. The objective of Siat, which stands for Societe d’Investissement pour l’Agriculture Tropicale, is to invest and manage agro-industrial ventures in the tropics.
The group employs in excess of 8,000 people and has a turnover of about 160 million euros in 2010, with an estimate of around 230 million euros in 2011. On Tuesday, Malaysia’s benchmark January palm oil futures KPOc3 ended near two year highs at 3,053 Malaysian ringgit from 3,071 at Monday’s close.
“They will go up another 20 percent (next year),” Vandersmissen said. “People are buying more it’s the cheapest vegetable oil available.
Source: B&FT