Cargill begins construction of new palm oil facility in Indonesia to meet rising demand

INDONESIA – American global food corporation Cargill has announced that it is building a new US$200 million palm oil refinery in Lampung, Indonesia.

The Lampung investment follows an announcement late last year of a US$20 million project to expand and modernise the company’s palm oil production facility in Port Klang, Malaysia.

According to a statement from Cargill, construction work on the new facility has already begun and is expected to be completed late next year.

Cargill says that recent years have seen strong demand for palm oil as its low price makes it a highly sought after vegetable oil across the globe.

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The oils low price also make it the perfect alternative for other chemicals or animal products used in cosmetics, further supplement the growth of the global Palm Oil market.

According to recent data from Facts and Factors, the global Palm Oil Market was valued at US$15.7 billion in 2019 and is expected to surge at a CAGR of 9% during the forecast period of 2020-2021.

According to a market research firm, the palm oil market anticipated to surpass US$30.1 billion by 2026.

However, the growing supply and demand for palm oil have led to deforestation and community clashes in the tropical countries cultivating oil palms.

Sustainable palm oil

With sustainability issues being in vogue, palm oil producers have become hard pressed to rid their supply chains of unsustainable palm oil.

With the new refinery, Cargill expects to be better able to meet customers’ expectations of sustainability and transparency, by guaranteeing traceability to plantation.

The agribusiness giant says that the Lampung facility will play a key role in connecting sustainable crude palm oil production in Indonesia to the North American and European markets through a “fully integrated supply chain from plantation to customer”.

“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, responsibility and sustainably,” said 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.”

Cargill launches Cargill Currents water project

Meanwhile, Cargill has also partnered with Global Water Challenge (GWC) to launch a community water initiative, Cargill Currents, to address water challenges faced by local communities in priority watersheds.

The 3 year, US$3 million program will support Cargill’s commitment to improve access to safe drinking water in communities where Cargill em­ployees live and work.

As water challenges vary across regions, the partnership will focus efforts where Cargill and Global Water Challenge can drive positive change, tailored to the specific needs of the target communities.

Initial investments from Cargill will support activities in communities in Brazil, Cameroon, Cote d’Ivoire, Ghana, India and Indonesia and will benefit up to 150,000 people with improved water access.

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