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Ragni is the capital of the Malaysian state of Sabah, a place that has become an epicenter of global palm oil production.
Malaysia is home to the world’s largest coconut plantation, which includes a major market for American palm oil, and the company that owns it has long sought to shift its focus from oil to other industries.
“We are committed to sourcing sustainable palm oil and coconut timber,” said Craig Bittles, vice president of sustainability and operations at Ragnis.
“Malaysia is one of the largest producers of palm oil in the world and we want to be part of that.”
Bittels added that Ragnies efforts to shift from oil palm to coconut timber, as well as to other non-palm oil products, have been part of a broader initiative to improve the environment and reduce greenhouse gas emissions.
That effort started with the development of Ragnia, a small island off the coast of Sabak in the Indian Ocean that became a hub for palm oil processing.
“The first major effort was to ship coconut timber to Sabak,” Bitts said.
“Then, we started working with the Ragnieas (the state-owned plantation owner), and then the other palm oil companies.”
Bettles said Ragnices current palm oil sourcing process includes three main steps: first, coconut logs are dried in the sun, which can then be ground and refined into oil; second, coconut trees are harvested, which is then transported to Malaysia to be processed; and third, the processed oil is sold in the form of a can or a roll.
Bittls said Ranganas largest customers were Malaysia and Singapore, and that it has partnered with other suppliers to ensure that palm oil is sourced responsibly.
The palm oil process takes between 30 and 45 days, and each kilogram of the oil produced is then processed, packaged and shipped in a truck, which typically carries about 250 tons of coconut logs.
Bettels said Rannas palm oil producers are using recycled coconut logs, which are also available as a renewable resource.
“You can buy coconut wood right now from a local farmer in Sabah,” he said.
Ranns palm oil plantations have long been criticized for environmental impacts.
A 2010 report from Greenpeace found that palm plantation deforestation in Sabak had reduced the environment to a “global catastrophe.”
The Rannia group says it has committed to reducing its environmental impact by 50 percent by 2020, and its palm oil will be sourced from sustainable forests and land reclaimed from plantation lands.
The company has been in the business since 1995 and has a turnover of around $1.5 billion, according to its website.
Bittele said the company has not been shy about the environmental impact of its operations.
“Palm oil is a very significant source of greenhouse gas and carbon dioxide emissions in Malaysia,” Bitteles said.
He added that in its 2016 sustainability report, Rannias palm oil products ranked sixth among the palm oil brands, making it the third-largest producer of the palm wood by volume.
Betts palm oil processors also rely on traditional plantations in Sabal Islands, located about 1,300 miles from Sabak, as the base of their operations.
Bitteners group has not yet decided how it will transition to the coconut wood processing process.
“Right now we are very focused on the coconut processing, which will be the biggest piece of our business moving forward,” he added.
Bitter battle ahead Rannies palm oil operations in Sabachan, Malaysia, are being run by an independent board of directors.
The board members are members of Ranni’s Indonesian subsidiary, and are largely independent.
“It is a difficult time, because we are in a difficult situation,” Bittenes said.
Bitto said the palm tree industry in Sabas has struggled in recent years due to an oil glut and the rapid development of the island nation.
“Now the situation is different, we are seeing more competition,” he noted.
Ranganias palm trees are planted and harvested in Saba.
Bttles said the organization plans to expand its palm tree operations and diversify its production and marketing in Sabans markets.
“I think the market is ripe,” Bitto concluded.