Ranked amongst the largest of the listed companies by market capitalization on the Singapore Stock Exchange, with its quarters in Singapore, Wilmar International has been the leading agribusiness group in Asia since its inception in 1991.

WRITTEN BY JACK SLATER

THE GIANT BEHIND IT ALL

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Diversification, not only of industry but also of location has ensured a solid global presence which is very much the model of corporate giants today.

“Currently we’re investing $250 million into the construction of a petrochemical refinery in Gresik East Java,” Jeremy Goon explains, “And $300 million to construct a flour mill and bio-refinery plant in Gresik.“

It appears that a substantial part of Wilmar is setting up shop and laying down the groundwork for future development and growth. Their business activities include palm oil cultivation, biodiesel and fertiliser manufacturing and grain processing

At the core of Wilmar’s strategy is a resilient integrated agribusiness model that encompasses the entire value chain of the agricultural commodity processing business, from origination and processing to branding, merchandising and distribution of a wide range of agricultural products.

With over 400 manufacturing plants and an extensive distribution network covering China, India, Indonesia and some 50 other countries the Group employs a staggering multinational workforce of 90,000 people. Considering the tidal impact of their presence upon nature and being the axis around which much of the food industry supply chain revolves it is surprising how so few of the consumers at the end even know of their existence.

With this in mind, Wilmar’s portfolio of high quality processed agricultural products is the preferred choice of the food manufacturing industry, as well as the industrial and consumer food catering businesses. Its consumer-packed products occupy

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Part of their success has been their speedy expansion; for example in 2010 they took their first steps into the sugar industry by acquiring Sucrogen Limited, the largest raw sugar producer and refiner in Australia, and PT Jawamanis Rafinasi, a leading sugar refinery in Indonesia. Immediately expanding their presence globally this led to another acquisition in 2011 of PT Duta Sugar International in Indonesia, Proserpine Mill in Australia and Natural Oleo chemicals, a leading oleo chemicals producer with significant market share in Europe and Asia and a growing presence in the USA.

a leading share in its targeted markets. Through scale, integration and the logistical advantages of its business model, Wilmar is able to extract margins at every step of the value chain, thereby reaping operational synergies and cost efficiencies.

“As our spread is so varied with cultures, people and locations it is important for us to maintain a structured mandate of approach,” Jeremy specifies, “To ensure this we have a structured set of values that are known throughout our workforce and up through the entire corporate structure.”

Integrity, excellence, passion, innovation, teamwork, safety and simplicity are the key to managing people. The expectations for every employee are easily communicable and easily understood and it’s this simple but strong approach which can be directly attributed to the vast expanse of this country.

“While Wilmar’s net income dropped 53 percent to $378 million in the first half of this year,” Jeremy explains, “Our revenue climbed 7 percent to $21.5 billion.”

As a member of the RSPO (Roundtable of Sustainable Palm Oil) who share a vision to make sustainable palm oil the norm, Wilma comes with the hefty task of conducting themselves in a manner befitting their status as one of the global leaders in this industry.

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Their approach to this end has included all the major areas of their business.

“As one of the largest oil palm plantation owners in Indonesia and Malaysia,” Jeremy tells us, in explaining the lengths of their corporate approach, “Our oil palm plantations are strategically located in the various regions of Malaysia and Indonesia where the climatic conditions are suitable for planting oil palms.”

To best make use of the weather conditions, in Indonesia their plantations are located in Sumatra, West Kalimantan and Central Kalimantan with is in the southern region while in Malaysia, they are located in the states of Sabah and Sarawak.

“The Group, through joint ventures also owns oil palm plantations in Ghana, Uganda and West Africa,” he tells us, “Approximately 247,081 a hectare (ha) of planted area of which about 74% is located in Indonesia, 24% in East Malaysia and 2% in Africa.”

Under the Plasma Scheme, Wilmar manage approximately 38,021 ha of oil palm plantations in Indonesia. The Plasma Programme is an initiative designed for the development of oil palm plantations for smallholders by a developer of plantations.

“We are committed to purchasing all the fruits produced by the small landholders’ plantations,” he states, “And intend to grow our plantation business through greenfield projects and acquisitions to better tap into the ever growing demand for palm oil.”

Wilmar is committed to the use of best management practices, which include good field and harvesting standards and timely application of fertilisers to optimise crop yields. With stringent corporate social responsibility (CSR) policies and procedures ensuring their plantations are developed in an environmentally and socially responsible manner everything from the cultivation of the seeds to the harvesting of the final product over a palm-oil lifespan of twenty five years.

“A scientific approach to the cultivation and production is pivotal to reaching maximum yield,” Jeremy points out, “For example once a seedling has spent a year in the nursery it is put into the field and the young palms are planted about nine metres apart resulting in 128 to 140 trees per hectare.

“Generally oil palms begin to produce fruits 30 months after being field planted with commercial harvesting commencing six months later. Although low at first the fruit yield increases as the palm matures,” it is clearly a long-term commitment, “Fully mature oil palms produce 18 to 30 metric tonnes of fresh fruit bunches per hectare.”

The milling of these fresh fruit bunches takes place within twenty four hours of harvesting, where they are first transferred to the palm oil mills for sterilisation by applying high-pressure steam, whereupon the palm fruits are enzyme-deactivated and separated from the palm bunches.

After steaming, the palm fruitlets are crushed in a pressing machine to obtain crude palm oil and palm kernel. Waste and water is then cleared and separated by means of a centrifuge. The cleared crude palm oil emerging from the centrifuge is then sent for refining while the palm kernel nut is sent for crushing and the liquid waste material arising from the process is recycled as fertiliser in the plantations.

As part of Wilmar’s integrated business model, they own a fleet of vessels which caters primarily to their in-house needs, improving the flexibility and efficiency of their logistics operations. The shipping operation is managed by Raffles Shipping Corporation Pte Ltd a subsidiary of Wilmar.

A driving force to every industry leader is research and development and the lengths that this company goes to ensure that they are ahead of the curve in all new movements and changes are remarkable.

“Wilmar’s research and development takes place in China, Singapore, Malaysia, Indonesia, India, Vietnam, Russia and Germany,” Jeremy outlines, “Aiming to improve current processing technology and products and develop green and white biotechnology, creating new product concepts that support healthy living.”

In China, the R&D focus is primarily on edible oils, specialty fats; food technology, oleo chemicals, flavour chemistry, food ingredients and cereal processing while in Indonesia activities include research into agronomic traits of palm oil. The cloning of key oil palm genes involved in fatty acid biosynthesis, environmentally friendly approaches to controlling or preventing oil palm diseases, bio fertilisers and the use of microbes to improve plant growth and for waste treatment are just some of the areas that are being looked at right now.

Besides supporting Wilmar’s business and brands, their research and development efforts also focus on providing sustainable solutions to optimise resources, reduce energy consumption and minimise environmental impact.

“One such example is the rice milling operations in China where paddy husks, a major by-product of the milling process, are used to generate electricity,” Jeremy concludes, “It is through these sort of developments and this innovative thinking that keeps us ahead.”

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