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Annual Report 2016
ASIA MEDIA GROUP Berhad
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INDUSTRY OUTLOOK AND FUTURE PROSPECTS OF OUR GROUP (CONT’D)
IV. Prospects and future plans of our Group (cont’d)
Edible oils and fats are some of the most crucial cooking ingredients in the world and are more
sought after now than before. These oils form the basis for food, energy, oleo chemicals and fuel.
Demand is growing steadily and will continue to do so, matching the growth in population and
rising living standards in emerging markets. Global demand for edible oils and fats grew from
114.9 million MT in 2000 to 191.5 million MT in 2013 at a CAGR of 3.8%. Edible oils and fats
demand is expected to grow to 209.7 million MT by 2015, registering a CAGR of 3.9% between
the years 2000 and 2015.
The strong consumption growth in edible oils and fats over the forecast period is projected to be
supported by strong production growth, particularly for palm oil, which is the most produced and
consumed of the edible oils and fats. Growth in the palm oil industry is expected to be driven
by a number of factors. Among them include the increasing demand for food as a result of the
growing population and economic development of key consuming markets such as China and
India as well as regions such as Africa and Middle East. Other regions globally such as East
Asia, the Pacific, Europe, Central Asia, Latin America, the Caribbean and South Asia have also
registered healthy population increases, along with growth in gross domestic product. Growth
in these markets is expected to boost growth in the demand for palm oil and palm oil related
products, thereby driving production and consumption worldwide. Furthermore, palm oil’s
versatility and fat content have positioned it as a key sustainable global commodity. Hence,
palm oil is increasingly used in a wide range of food and non-food applications, and this bodes
well to the continued demand for palm oil products.
Specifically in Malaysia, the edible oils and fats market is represented by the nation’s vibrant
palm oil industry. Malaysia has consistently been among the top two (2) producers of CPO and
CPKO globally as a result of the nation’s focus on this oilcrop as an economic sector. The palm
oil industry is the nation’s fourth (4th) largest economic contributor and accounted for a gross
national income of RM53 billion. Palm oil and palm oil-based products are the largest export
income generator in the agricultural products segment. In 2014, the exports of palm oil and PKO
totalled an estimated RM48.7 billion, with India, China and Netherlands emerging as principal
importers of Malaysia’s palm oil.
The significance of this industry and its growth potential is a matter of national interest in Malaysia.
The Government has identified the palm oil sector as a NKEA in the Economic Transformation
Programme (ETP), which is aimed at reaching a gross national income of RM178 billion in 2020
while creating an additional 41,000 jobs during this period. The eight EPPs that span across the
palm oil value chain targets developing oil palm cultivation, productivity and sustainability, and
ensuring expansion and sustainability of mill and refinery operations. Collectively, these EPPs
aim to achieve an increase in the supply of palm oil for domestic and export consumption, and
generate higher revenues for the industry.
Management Discussion and Analysis
(continued)