IOI Group

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IOI Corporation Berhad
Company typePublic limited company
MYX: 1961
ISINMYL1961OO001
IndustryConglomerate (palm oil, chemical manufacturing, property development, investment, resort management)
Founded1969
FounderLee Shin Cheng
HeadquartersIOI City Tower 2, IOI Resort City, 62502 Putrajaya, Malaysia
Area served
Southeast Asia
Key people
Lee Yeow Chor (Group Managing Director)
ProductsPalm oil, oleochemicals
RevenueIncrease RM 7.41 Billion [1]
Number of employees
30,000

IOI Corporation Berhad, commonly referred to as IOI, was incorporated on 31 October 1969 as Industrial Oxygen Incorporated Sdn Bhd.[2] IOI is one of Malaysia's biggest conglomerates. It ventured into oil palm plantations in 1983,[3] followed by property development in 1984[4] and refineries in 1997.[3] IOI was listed on the Kuala Lumpur Stock Exchange (KLSE) and trading as MYX: 1961—now known as Bursa Malaysia—in 1980.[2]

The group was founded and headed by Lee Shin Cheng, the executive chairman, until his death in 2019.[5] Lee Yeow Chor is currently the chief executive.[6]

Its diverse businesses extend from the upstream plantation in Malaysia and Indonesia, to downstream manufacturing of oleochemicals, specialty oils and fats which are exported to over 70 countries.[7]

Core businesses[edit]

Palm oil plantations[edit]

Palm oil plantations are IOI's biggest income generator. As of 2023, about 63 percent of the conglomerate's profits came from its oil palm plantations. The group controls 176,925 hectares of oil palm plantations in Malaysia and Indonesia. It has 15 palm oil mills with a total refining capacity of 1.8 million metric tonnes of FFB (fresh fruit bunches) per year from its 98 estates throughout Malaysia and Indonesia.[8]: 7 

With oil yield of some six tonnes per hectare per year at its mature estates, IOI is the most efficient plantation company in the world.[9] Malaysia's oil palm average yield for the last 20 years has been stagnant at four tonnes per hectare per year.[citation needed]

Nestlé stopped buying palm oil from IOI in 2016.[10] The United Nations Environment Programme says palm oil production is the leading cause of deforestation, which is occurring at a rate of about two per cent per year.[citation needed] Indonesia is also the world's third-largest carbon emitter, largely as a result of deforestation and the burning of peatlands.[citation needed]

Real estate[edit]

IOI develops real estate and makes property investments in commercial, hospitality and leisure, launching its maiden 930-acre Bandar Puchong Jaya township in 1990.[4] IOI announced a demerger of its property business in 2013,[11] and relisted it as IOI Properties Group Berhad on the Main Market of Bursa Malaysia on 15 January 2014.[12]

Oleochemicals and speciality fats[edit]

IOI is the largest vegetable oil-based oleochemical manufacturer in Asia—held under wholly owned entities IOI Oleochemical Industries Bhd and Pan Century Oleochemical Sdn Bhd with a combined capacity of over 750,000 tonnes per annum.[13] In 2021, IOI was ranked 8th on the Global Top 30 Specialty Oil Companies list.[14]

These plants produce fatty acids and esters, glycerine, soap noodles, fatty alcohols, and metallic stearates. These have various industrial applications in the production of food, pharmaceutical, cosmetics, personal care, home care, industrial detergent-surfactants and lubricant products.

IOI's specialty fats businesses are operated by its 20%-owned associate Bunge Loders Croklaan (formerly known as IOI Loders Croklaan),[15][16] with manufacturing facilities in the Netherlands, North America, and in Malaysia (with a combined production capacity of more than a million tonnes per year). Bunge Loders Croklaan's customer base includes global food giants like Unilever, Nestle, Cadbury and Kraft. Speciality fats are used in pastries, confectionery, snack foods, and ready-to-eat meals.

Refineries[edit]

IOI owns refineries in the US and the Netherlands.[17] IOI extended its activities to Indonesia in 2005.[18]: 100  Its associate company in Indonesia is Bumitama Gunajaya Agro.[18]: 100  On 27 September 2016, Greenpeace blockaded the IOI refinery in the Netherlands in order to force IOI to adopt a more sustainable plantation policy.[19][20]

Critics[edit]

See also: Oil palm

Environmental and civil organizations have criticized IOI Group. Greenpeace first documented the destruction of orangutan habitat and peatland forest in the 2008 report Burning up Borneo,[21] followed by a second report in 2015, Under Fire.[22] The company also faced allegations in 2014 from Finnish NGO Finnwatch of serious labour issues on its Malaysian plantations, including confiscating workers' passports, providing contracts in language workers could not understand, restricting freedom of association and paying salaries below the minimum wage.[23]

IOI is a co-founder of the Roundtable on Sustainable Palm Oil (RSPO) and has played an active role in shaping the scheme. The company has several of its estates in Malaysia certified as complying with RSPO standards. According to Friends of the Earth in March 2010, IOI Corporation failed to live up to its claims of green stewardship. For example:[24]

  • Plantation development took place in forest lands without approval of the Ministry of Forestry in conflict with the Indonesian legislation
  • Plantation development took place without approved environmental impact assessments
  • Fraudulent statements were made
  • Encroachment has taken place in forests and peatlands
  • There is a significant increase in fire hot spots
  • Corporate claim not to use peatland but to circumvent the issue it does not consider coastal or shallow peat as peatland.
  • Corporate claim not to use "burning policy". According to the Fire Information for Management System (FIRMS), there was a significant increase in the number of hot spots after land clearing activity started in 2009.
  • IOI's current land development activities may trigger significant land conflicts.

After a complaint filed by AidEnvironment in April 2015, the RSPO certificates of the IOI Group are suspended as of 1 April 2016.[25] Since then, many consumer companies like Unilever, Nestlé and Mars have cancelled contracts with the company.[26] IOI was reinstated in August 2016 by RSPO after it was judged to have fulfilled the group's demands to improve its environmental performance.[27] In September 2016, Greenpeace published a damning indictment of IOI entitled, A Deadly Trade-Off; IOI's Palm Oil Supply and its Human and Environmental Costs.[28]

References[edit]

  1. ^ "IOI Investor Relations". Retrieved 20 January 2019.
  2. ^ a b "Corporate Milestones; Corp". IOI Group. Retrieved 28 September 2016.
  3. ^ a b "Our History - IOI Group". www.ioigroup.com. Retrieved 18 April 2024.
  4. ^ a b "Corporate Milestones; Property". IOI Group. Retrieved 28 September 2016.
  5. ^ "Malaysian Tycoon Lee Shin Cheng Dies At 79". Forbes. Retrieved 18 April 2024.
  6. ^ "Board of Directors - IOI Group". www.ioigroup.com. Retrieved 18 April 2024.
  7. ^ "About Us - IOI Group". www.ioigroup.com. Retrieved 18 April 2024.
  8. ^ IOI Group Annual Report 2023 (PDF). IOI Group. 2023. Retrieved 18 April 2024.
  9. ^ "IOI wins on efficiency; FGV on size". The Edge Malaysia. Retrieved 20 March 2024.
  10. ^ "Nestlé to cut all ties with IOI over palm oil action plan: 'It doesn't go far enough'". foodnavigator.com. 11 May 2016. Retrieved 18 April 2024.
  11. ^ "IOI Properties relists as a stronger entity". The Edge Malaysia. Retrieved 18 April 2024.
  12. ^ "IOI Properties' RM1.87 bil relisting was 2014's largest IPO". The Edge Malaysia. Retrieved 18 April 2024.
  13. ^ IOI to buy Aditya Birla's Pan Century for RM423 million. New Straits Times, 8 December 2006
  14. ^ Fu, Rice (26 May 2021). "2021年全球特种油脂企业30强". FoodTalks (in Chinese). Retrieved 21 January 2022.
  15. ^ "Our Company; About Us". IOI Loders Croklaan. Retrieved 27 September 2016.
  16. ^ IOI to buy Unilever's oils and fats division. New Straits Times, 31 August 2002
  17. ^ Forbes 2012 No. 4 Lee Shin Cheng
  18. ^ a b Varkkey, Helena (2015). The Haze Problem in Southeast Asia. Abingdon: Routledge.
  19. ^ "Actievoerders Greenpeace opgepakt in Rotterdamse haven". Rijnmond.nl. Retrieved 20 March 2020.
  20. ^ Neslen, Arthur (27 September 2016). "Greenpeace blockades IOI palm oil refinery in Rotterdam port". The Guardian. Retrieved 28 September 2016.
  21. ^ "How Unilever palm oil suppliers are burning up Borneo" (PDF). Greenpeace. Archived from the original (PDF) on 24 August 2017.
  22. ^ Indonesia's Forests: Under Fire. Indonesia's fire crisis is a test of corporate commitment to forest protection
  23. ^ IOI Group suspected of serious labour rights violations
  24. ^ Too Green to be True, IOI Corporation in Ketapang District, West Kalimantan[permanent dead link] Milieudefensie and Friends of the Earth Europe, March 2010
  25. ^ NOTICE TO RSPO MEMBERS ON THE SUSPENSION OF IOI GROUP'S CERTIFICATION
  26. ^ Unilever palm oil supplier must suspend all plantation expansion to save reputation, The Guardian
  27. ^ Cuff, Madeleine (8 August 2016). "Palm oil giant IOI Group regains RSPO sustainability certification". The Guardian. Retrieved 27 September 2016.
  28. ^ A Deadly Trade-Off; IOI's Palm Oil Supply and its Human and Environmental Costs (PDF). Amsterdam: Greenpeace International. September 2016. Retrieved 27 September 2016.

External links[edit]

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