Cargill is building a new US$200 million palm oil refinery in Lampung, Indonesia. The development plans tie into the company’s goal to scale its sustainable palm supply chain and provide verified deforestation-free products to customers. 

The new refinery will play a key role in connecting the global agribusiness’ traceable crude palm oil production in Indonesia to demands in North America and Europe, through a fully integrated supply chain “from plantation to customer.”

Construction for the new state-of-the-art facility has commenced and operations are expected to be completed in late 2022.

“This project is a key step for Cargill to increase the availability of sustainably sourced and produced edible oil ingredients for our customers, helping Cargill to fulfil its purpose to nourish the world safely, responsibly and sustainably,” says Robert Aspell, president of Cargill Asia Pacific.

“In addition, this fully integrated supply chain offers our customers assurance that stringent production requirements and the highest product quality are achieved.”

An essential edible oil
Indonesia is currently the largest producer and exporter of this palm oil, an important ingredient across the foodscape. The crop has experienced strong demand in recent years, Cargill highlights.

Palm oil is a high yielding and highly versatile oil that is not only used as cooking oil, but also used to create flavor and texture in many foods, and works as a stabilizing, binding and foaming agent in many everyday household products.

Depending on the degree of refining, palm oil can be a natural source of beta-carotene and tocotrienols (vitamin E). Researchers from Malaysia and Libya recently found that tocotrienol-rich fractions extracted from palm oil can potentially be used to improve liver health.

Cargill’s Lampung refinery will produce palm oil according to the principles set out in the supplier’s Policy on Sustainable Palm Oil.

Grey areas in global monitoring
While deemed nutritious and highly functional, palm oil still remains hotly contested against the benchmarks of environmental sustainability as it has been frequently linked to deforestation practices.

The majority of palm oil companies still do not report basic information on how they are monitoring deforestation in either their own or their suppliers’ operations, according to reports by the international conservation charity Zoological Society of London.

Echoing this sentiment, a CDP’s new Investor Research report entitled “Zeroing-in on Deforestation” said more needs to be done to fulfill net zero deforestation targets, and many in the consumer goods sector are unlikely to meet their goals.

In its deforestation crackdown, Unilever is using geospatial analytics in a move that is expected to bring a “new level of sophistication to traceability” – one that has the potential to work on a massive scale.

Transparency is a key theme that will continue to steer consumer demand into the coming years. “Transparency Triumphs” was crowned as Innova Market Insights’ Top Trend for 2021. There is currently a renewed interest in technologies like invisible barcodes and near-field communication devices that help boost product traceability significantly.