Annual Report 2012 - IOI Group

MANAGEMENT’SDISCUSSION AND ANALYSISGroup Business Review – Resource-based ManufacturingThe Group’s resource-based manufacturing division is anessential segment of our palm oil business and consists ofthe downstream refining of palm oil, and the processingof refined palm oil and palm kernel oil into oleochemicalsand specialty oils and fats. Crude palm oil and palmkernel oil are processed into products that are used invarious industries including food, personal care,households, pharmaceutical, cosmetics and chemicals.REFININGIOI Group owns four palm oil refineries, three locatedin Malaysia and one in the Netherlands. They have acombined annual refining capacity of 3,300,000 MT.In Malaysia, two of the refineries are situated in PasirGudang, Johor. They have a combined annualrefining capacity of 1,100,000 MT. The third refineryin Malaysia is located in Sandakan, Sabah and has anannual refining capacity of 1,000,000 MT. The fourthrefinery located in Rotterdam, Netherlands has anannual refining capacity of 1,200,000 MT. Ourrefineries are strategically located along the majorshipping routes with direct port access.These refineries produce palm and palm kernel oilfractions for export as well as feedstock for theGroup’s downstream activities. Our manufacturingpremises are ISO 9001:2000 and HACCP accredited.In addition, in line with the Group’s commitment tothe Roundtable on Sustainable Palm Oil (“RSPO”),our refineries are RSPO-certified to handle segregatedRSPO oil on a large scale.With the Group’s integrated business model fromplantation to specialty fats and oleochemicals, ourrefineries play an important role in the supply chainand we are in a favourable market position to caterto our customers’ needs.Previous page: A view of IOIOleochemical’s manufacturing plantin Prai, Penang.Top: A lab assistant carrying outtesting to ensure the refined palmoil is of high quality.Left: IOI Loders Croklaan Europe’s new,cutting-edge refinery at Rotterdam is asignificant breakthrough in innovationand sustainability.Annual Report 2012IOI CORPORATION BERHAD 35