Annual Report 2012 - IOI Group

sustainability andCORPORATE SOCIAL RESPONSIBILITYBack in year 1995, long before the concepts ofsustainability and corporate social responsibility (“CSR”)became popular in the business world, IOI Group hadintroduced its Vision IOI which acknowledged itsresponsibility towards various stakeholders namely itsshareholders, customers, employees, business associates,community and the nation.IOI Group’s sustainability commitment is also articulated in its Corporate Responsibility (“CR”) policystatement. The Group holds firmly to operating its businesses in ways that meet regulatory requirements onenvironmental impact in countries or markets where it operates. It strives to achieve a sustainable long-termbalance between meeting its business goals and preserving the environment. Specifically, the Group adoptsa group-wide policy of greening the environment which also extends to insisting on its suppliers andbusiness partners to practise the same standards of environmental care.The Macro PictureMalaysia is a firm believer in the importance of CSRand sustainability, recognising that the country’sbusinesses have a direct and indirect impact on thecommunities. In the quest towards certified palm oil,the nation has achieved significant milestones. As ofMay 2012, Malaysia being the second largestRoundtable on Sustainable Palm Oil (“RSPO”)membership by country after United Kingdom,contributes 43% with 2.74 million tonnes in annualproduction. In line with the significant growing palmoil market, IOI Group is committed to the productionof sustainable palm oil according to goodenvironmental, social and economic standards whileholding fast to Vision IOI. IOI Group is listed as thesecond top Certified Sustainable Palm Oil (“CSPO”)producer in Malaysia and contributes 14% to thetotal volume of national CSPO.Europe is still the market in which sustainability andCSR are very high on the agenda of the Group’scustomers. Originally led by its multinational keycustomers, the well-known global brands, othercompanies and partners in the supply chain are nowalso seen to be giving more preference to refinersthat are able to provide sustainable oils with atraceable origin. From January 2012, IOI LodersCroklaan Europe is proud to be able to offer allRSPO certified Mass Balance products globally. Itsfacilities in the Netherlands are expanded with anew deodorizer, allowing refining capacity to growsubstantially.The American market is more focused on bakerymarkets. Health issues are on top of customers’minds. To meet the rising demand for no-trans fullyfunctional shortenings and oils in the NorthAmerican market, IOI Loders Croklaan Americas hasjust completed an expansion of its Palm OilProcessing Plant in Channahon, Illinois whicheffectively doubles the capacity of this facility. Whiledemand for Mass Balance is higher than RSPOSegregated products, IOI Loders Croklaan Americasoffers a wide selection of functional fats and oils tothe food industry based on CSPO.In Asia, especially where India and China are the twolargest palm oil consuming countries, the issue ofsustainability is not a significant factor in the marketyet. However, demand for sustainably sourced productsis expected to grow as the income level of the localpopulation continues to rise. In addition, demanddriven by China’s key clients in Europe and America isexpected to stimulate demand for RSPO CSPO in thecoming years. In view of the upcoming trend, theGroup participates as a member in the Network for thePromotion of Sustainable Palm Oil in China.48IOI CORPORATION BERHADAnnual Report 2012