Sukanto Tanoto commits to sustainable palm oil practices through new palm oil alliance ‘SUSTAIN’

Sukanto Tanoto, Founder and Chairman of Royal Golden Eagle (RGE), has adopted sustainable palm oil practices, through an important alliance formed in 2018. The alliance  includes these two companies managed by RGE⁠—Apical and Asian Agri, operating under the name ‘SUSTAIN’. The launch took place in Singapore.

Sustainability Assurance & Innovation Alliance (SUSTAIN) is a group of oil palm growers, palm oil processors, consumer goods manufacturers, not-for-profit organisations and technology leaders that initiated a blockchain solution. This solution was meant to increase  traceability in the production chain and help improve NDPE (No Deforestation, No Peat, No Exploitation) compliance in the palm oil chain.

According to block is defined as follows: “Blockchain, sometimes referred to as Distributed Ledger Technology (DLT), makes the history of any digital asset unalterable and transparent through the use of decentralisation and cryptographic hashing.”

Other companies present at the launch event were as follows: renewable diesel producer Neste, consumer goods manufacturer KAO, facilitation team CORE (Proforest and Daemeter), and technology partner SAP.

The goal of the alliance is to provide palm oil to individuals who are increasingly demanding vegetable oil. Palm oil will be demonstrated as the cheaper alternative.

“SUSTAIN is not about building another traceability data collection tool, analytics or dashboard. The key focus of SUSTAIN is to promote collaboration and align efforts in solving landscape-level issues by leveraging on technology to address shared challenges in the supply chain,” said Dato’ Yeo How, President of Apical Group. “We aim to work together with industry partners in creating an industry solution towards greater transparency and sustainability assurance through the successful integration of sustainability good practices with the latest technological solutions.”

The SUSTAIN system was built in a manner that’ll support an open access system. This system has downloadable tools that can be used by a large user base. The benefits provided to the users will be as follows: traceability, monitor policy compliance, efficiently trade FFBs (fresh fruit bunch), best practice guides, and access to innovative ESG-linked microfinancing.

“SUSTAIN will capitalise on the advantages of blockchain technology to encourage industry-level collaboration and wide adoption of a common blockchain-based platform as a practical solution to drive supply chain transformation to improve market access for palm oil products,” Yeo added. “The initiative has been created to acknowledge the critical roles of palm oil mills, dealers, agents, and smallholders in the supply chain, and works towards inclusion and progressive transformation.”

The technology partner SAP is involved with 60 enterprises interested in building blockchain systems for their company.

“SAP believes innovation is driven from a deep understanding of our customers’ business and the environment in which they operate and the communities they serve. We are delighted to be working with SUSTAIN as their technology partner,” said Jim Cook, Vice President, Industries and Digital Leader of SAP South East Asia. “SAP Leonardo, our innovation platform supporting new technologies, such as machine learning, artificial intelligence and blockchain, will be used as a platform for SUSTAIN. SUSTAIN will capitalise on the advantages of blockchain technology to encourage industry-level collaboration to improve traceability and management of sustainable sources. Collaboration across the many stakeholders in this industry is vital to protect the livelihoods of those who work in the industry and protecting the environment.”

Celebrating their alliance, Apical Group and Asian Agri, participated in the annual Trade Expo in Indonesia. This was held in ICE, Serpong, from October 16th to 20th 2019. Their exhibit featured oil palm fresh fruit bunches, topaz seeds, and palm oil derivative products. Keeping the theme of the event in mind⁠—’Sustainable Palm Oil Everywhere Everyday’⁠—the two companies demonstrated the production of palm oil in a sustainable manner. 

The guests of the event were taken through upstream and downstream processes of palm oil production, including being encouraged to participate in booth activities, like business discussions and quizzes.

“Trade Expo Indonesia 2019 provides Asian Agri and Apical with the opportunity to meet people who are interested to know more about the industry as well as those who wish to collaborate with us. Apart from promoting our own brands and products, we share with visitors how we manage our operations sustainably. In turn, we receive feedback and opinions of international buyers and visitors about the products required in their countries,” said Bernard Riedo, Sustainability and Stakeholder Relations Director of Asian Agri.

About Apical Group Limited

Apical Group is a large palm oil exporter in Indonesia. The company owns facilities throughout the supply chain, from sourcing to distribution, operating up to four refineries, one biodiesel plant, and a crushing plant in Indonesia and China.

Apicals business model is built on four core strengths:

A crude palm oil (CPO) sourcing network in Indonesia that is reliable, easily traceable, and broad in nature; integrating primary and secondary refinery assets strategically located in Indonesia, China, and Spain to increase efficiency; a well-organised logistics channel that enables delivering quality products to a well-diversified clientele; and handling business operations sustainably (this includes risk-based assessment for supply bases, mapping, and a prioritisation approach). The purpose of this is to set aside unreliable sources, thereafter engaging with suppliers proactively for the supply chain to progress.

About Asian Agri

Asian Agri, established in 1979, is a leading crude palm oil producer in Indonesia, committed to sustainable practices. The company manages 100,000 hectares of oil palm plantations in North Sumatra, Riau and Jambi, with up to 25,000 employees part of the company. Their main focus is to make a positive impact on the Community, Country, Climate, Customers and Company.

About Sukanto Tanoto

Sukanto Tanoto is an Indonesian businessman, born in Medan in 1949. Sukanto founded his managing group, RGE, in the year 1973 with the intention of going global. Today, his company manages up to eight companies globally:

  • APRIL and Asia Symbol – Pulp and paper
  • Asian Agri and Apical – Palm oil
  • Bracell – Specialty cellulose
  • Sateri and Asia Pacific Rayon – Viscose fibre
  • Pacific Oil & Gas – Integrated energy provider

Tanoto provides the companies with the support they require to successfully carry out their operations.