Friday 29 Mar 2024
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KUALA LUMPUR (Dec 11): Major oil palm growers, including Malaysia's Sime Darby Bhd will conduct trials of a sustainable cultivation scheme under the Sustainable Palm Oil Manifesto.

Companies including Sime Darby, Singapore-based Musim Mas and the US' Cargill Inc are signatories of the manifesto, which advocates the high carbon stock (HCS) scheme. The HCS was launched here today.
 
In a statement today, Sime Darby said the HCS methodology was built on three pillars. The list comprises ecosystem maintenance, socio-economic benefits for local communities and economic viability.

"It emphasises equitable, transparent, conflict-free and carbon-neutral oil palm development," said Datuk Franki Anthony Dass, who is managing director of Sime Darby unit, Sime Darby Plantation Sdn Bhd.

Franki said Sime Darby intended to carry out trials at its oil palm plantations in Liberia.

He said Liberia was chosen because Sime Darby's estimated 10,000 ha of plantations there, were the group's only greenfield development.

“We will fulfil our commitment to follow through on the pledge made in the Sustainable Palm Oil Manifesto, and trial the HCS methodology. By testing both HCS methodologies jointly, we hope to ensure the practicality of implementation, and contribute to efforts towards the development of a single HCS methodology for the oil palm sector.
 
“We have started to commission a Light Detection and Radar (LiDAR) study to obtain a baseline carbon map of the area identified to carry out the trials in Liberia. The map will be completed in the next six months, while socio-economic studies will be designed in the next few months,” Franki said.

At 3:49pm, Sime Darby shares fell six sen or 0.8% to RM7.38. The stock had earlier risen to its highest so far today at RM7.47.

Meanwhile, food-processing company Cargill's tropical palm chief executive officer John Hartmann said the company had committed to include the HCS trials on its plantations.

"The company had already embarked on implementing HCS assessments in its plantations and the HCS+ methodology will help the company integrate socio-economic considerations," Hartmann said.

Additional cost for oil palm growers

The HCS study's independent report steering committee co-chair Dr John Raison said while the new methodology would result in additional cost to oil palm production, the scheme would equip companies with more information to plan their plantations efficiently.

Speaking to reporters at the HCS launch, Raison said the scheme involved mapping of concession areas to identify the size and location of forest patches and surrounding land under the concession.

He said this would help companies determine areas with high cultivation potential and forested areas, which needed to be preserved.

"The carbon mapping part is not too expensive. The advantage is that it helps equip companies with information on where to build drainage, roads and so on," Raison said.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

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