PETALING JAYA: Kulim (Malaysia) Bhd has entered into a two-year purchase agreement of certified fresh fruit bunch (FFB) with Wild Asia and Eng Lee Heng Trading (ELH) to bolster the production of traceable and sustainable palm oil that meets the standards of the roundtable on sustainable palm oil (RSPO).
The purchase agreement is expected to increase the production of Identity Preserved palm oil at Kulim’s Sindora Mill in Kluang, Johor and contribute to the company’s revenue and profitability.
With the assistance of Wild Asia, Kulim was able to create a new model for working with FFB dealers. This new purchase agreement ensures there is a fair benefit share of RSPO premiums, allowing dealers to empower more smallholders.
By working with Wild Asia under the Wild Asia Groups Scheme (WAGS), smallholders are supported to meet the global RSPO certification standard. WAGS is a programme developed by Wild Asia to provide technical and management support for smallholders to have their production be independently certified, allowing them to participate in the global sustainable palm oil value chain.
On top of enhancing physical traceability from the estate to mill for Kulim’s Identity Preserved palm oil production, this agreement is a testament of the company’s ongoing smallholder inclusion programme to encourage more smallholders to attain RSPO certification.
Kulim managing director Mohd Faris Adli Shukery said as a founding member of RSPO, Kulim continues its effort to share its experience and knowledge whilst encouraging more smallholders to attain RSPO certification.
“I am optimistic that this pilot project will be able to demonstrate to more smallholders the value of being RSPO-compliant that is not only better for the environment, but also on how it can increase their revenue and profitability,” he said.
Kulim, a wholly owned subsidiary of Johor Corp, is focused on strengthening the turnaround of the company through continuing mechanisation and digitalisation at its oil palm plantations to overcome the acute labour shortage, and enhanced sustainability practices resulting from its ongoing commitment to continuously strengthen its environmental, social, and governance platform.
Kulim has been providing advisory and technical support for its 21 FFB outgrowers (including dealers, small estates and smallholders) and three of them had been RSPO-certified thus far. Kulim rewards its RSPO-certified smallholders with an additional premium to encourage more participation. It has set a target for all of its FFB outgrowers to attain RSPO certification.
