IOI Group has a significant presence in various countries across the globe. The company operates in over 17 countries, with a focus on Southeast Asia, the Middle East, and Africa.
IOI Group's operations are diversified across different sectors, including oil palm plantations, sugar refineries, and property development. The company's global reach enables it to tap into new markets and opportunities.
IOI Group's oil palm plantations are a major contributor to the company's revenue, with operations in Malaysia, Indonesia, and Papua New Guinea. The company's plantation areas cover over 700,000 hectares of land.
IOI Group's global presence also extends to the Middle East, where the company has operations in countries such as Saudi Arabia and the United Arab Emirates.
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IOI Group Business Segments
IOI is a significant player in the oleochemicals industry, operating under wholly owned entities IOI Oleochemical Industries Bhd and Pan Century Oleochemical Sdn Bhd.
These entities have a combined capacity of over 890,000 MT per annum, making IOI the largest vegetable oil-based oleochemical manufacturer in Asia.
IOI's specialty fats businesses are operated by its 20%-owned associate Bunge Loders Croklaan, which has manufacturing facilities in the Netherlands, North America, and in Malaysia.
Bunge Loders Croklaan's customer base includes global food giants like Unilever, Nestle, Cadbury, and Kraft.
Oleochemicals and Speciality Fats
IOI Group's oleochemicals and speciality fats segment is a significant business area for the company. IOI is the largest vegetable oil-based oleochemical manufacturer in Asia, with a combined capacity of over 890,000 MT per annum through its wholly owned entities IOI Oleochemical Industries Bhd and Pan Century Oleochemical Sdn Bhd.
These plants produce a variety of products, including fatty acids and esters, glycerine, soap noodles, fatty alcohols, and metallic stearates. These products have various industrial applications in the production of food, pharmaceuticals, 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, with manufacturing facilities in the Netherlands, North America, and in Malaysia. Bunge Loders Croklaan's customer base includes global food giants like Unilever, Nestle, Cadbury, and Kraft.
Specialty fats are used in a range of products, including pastries, confectionery, snack foods, and ready-to-eat meals. IOI's expertise in this area has earned it a ranking of 8th on the Global Top 30 Specialty Oil Companies list in 2021.
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Refineries
IOI Group has a significant presence in the refining industry, owning two refineries in Malaysia with a combined capacity of 1.80 million MT per annum.
These refineries are a vital part of IOI Group's operations, allowing them to process and produce various petroleum products on a large scale.
IOI Group's refining capabilities are a key factor in their ability to meet the demands of the market, and their two refineries in Malaysia are well-equipped to handle the task.
Their combined capacity of 1.80 million MT per annum is a testament to the Group's commitment to meeting the needs of their customers and the market at large.
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IOI Group Financials
IOI Group is a leading palm oil producer, with a history dating back to 1969. The company has a strong presence in Malaysia and Indonesia.
IOI Group's revenue has consistently grown over the years, with a significant increase in 2019 to RM 72.9 billion.
The company's net profit has also seen a steady rise, reaching RM 10.1 billion in 2019.
IOI Group's palm oil production is mainly driven by its oil palm estates, which cover a total area of 1.1 million hectares.
The company's palm oil production has seen a steady increase over the years, reaching 1.7 million metric tons in 2019.
IOI Group has a strong financial position, with a net gearing ratio of 0.73 as of 2019.
The company's cash and cash equivalents stood at RM 2.8 billion as of 2019, providing a strong liquidity position.
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IOI Group Relations
IOI Group Relations are quite diverse, reflecting the company's broad interests.
IOI Group has significant activities in Agricultural Commodities/Milling, with 11 related companies.
The group also engages in Real Estate Development, with 8 related companies, suggesting a substantial focus on property and construction.
IOI Group's Miscellaneous Commercial Services segment includes 2 related companies, indicating a range of other business activities.
Here's a breakdown of IOI Group's related company activities:
Relation Chart of Listed Companies
IOI Group Relations are quite diverse, and it's interesting to see the various industries they're involved in. IOI Group has a significant presence in Agricultural Commodities/Milling, with 11 related companies.
They also have a notable presence in Real Estate Development, with 8 related companies. This suggests a focus on building and managing properties.
IOI Group has a smaller but still significant presence in Finance/Rental/Leasing, with 2 related companies. This indicates a focus on providing financial services to their customers.
Here's a breakdown of IOI Group's relations to different industries:
Countries of Affiliated Companies
The IOI Group has a significant presence in various countries around the world. Malaysia has the highest number of affiliated companies at 36.
The IOI Group has a presence in several European countries, including the Netherlands and the United Kingdom, both of which have 2 affiliated companies each.
In addition to its European presence, the IOI Group also has affiliated companies in Hong Kong, Australia, and Indonesia, each with 1 company.
Here's a breakdown of the countries with affiliated companies:
IOI Group News and Controversies
IOI Group has faced numerous controversies and criticisms from environmental and human rights groups. In 2008, Greenpeace first documented the destruction of orangutan habitat and peatland forest in a report titled Burning up Borneo.
Cargill, a major commodities giant, has suspended new business with IOI Group until it cleans up its act. IOI Group failed to issue a responsible sourcing policy and a detailed sustainability plan as required by Cargill.
The company has been accused of clearing forests with high conservation value and developing plantations without proper government permits. IOI Group was suspended from the Roundtable on Sustainable Palm Oil (RSPO) in April over these complaints.
IOI Group has also faced allegations of serious labour issues on its Malaysian plantations, including confiscating workers' passports and paying salaries below the minimum wage. The company eventually dropped a lawsuit against RSPO in June after facing a boycott call from NGOs.
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Critics
IOI has faced criticism from various organizations, including Greenpeace, Finnwatch, and Friends of the Earth.
Greenpeace first documented the destruction of orangutan habitat and peatland forest in 2008, followed by a second report in 2015. The company's practices have been under scrutiny ever since.
In 2014, Finnish NGO Finnwatch alleged serious labour issues on IOI's Malaysian plantations, including confiscating workers' passports and paying salaries below the minimum wage. IOI addressed these allegations in 2014 and 2021.
Greenpeace published a damning report in 2016, highlighting IOI's human and environmental costs. This led to a blockade of the IOI refinery in the Netherlands in September 2016.
IOI was also criticized for failing to live up to its claims of green stewardship in 2010, according to Friends of the Earth. The company's RSPO certificates were suspended in 2016 due to environmental performance issues.
In response to these criticisms, many consumer companies like Unilever, Nestlรฉ, and Mars cancelled contracts with IOI in 2016. IOI was reinstated by RSPO in August 2016 after improving its environmental performance.
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Cargill Suspends New Business
Cargill has suspended new business with IOI Group, a Malaysian conglomerate, until IOI cleans up its act.
IOI Group was given until July 15 to issue a responsible sourcing policy and a detailed sustainability plan, but it failed to meet the deadline.
Cargill will not enter into any new purchase contracts with IOI Group until it meets their requirements and complies with their sustainable palm oil policy.
The suspension is not permanent, and Cargill will work with IOI Group to improve its practices.
Cargill's suspension is the latest blow to IOI Group, which was also suspended from the Roundtable on Sustainable Palm Oil (RSPO) in April.
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Prospects
IOI Group is expecting a solid foundation for sustained earnings ahead, thanks to its diversified product offerings across three countries and a sizeable recurring income stream from its established property investment portfolio.
The Group's CEO, Lee Yeow Seng, remains confident in its prospects despite global business environment and trade uncertainties.
IOI Group's diversified product offerings will provide a stable source of income, which is expected to benefit from the declining trend in interest rates.
The Group's property investment portfolio is a significant contributor to its recurring income stream, which will continue to provide a stable source of income.
IOI Group is also well-positioned to benefit from the favourable outlook of the hospitality & leisure segment.
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Frequently Asked Questions
Who is the owner of IOI group?
The IOI Group is led by Lee Yeow Chor as its current chief executive. The group was founded by Lee Shin Cheng, who passed away in 2019.
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