SPONSORING PALM OIL SUPPLIERS ON THE PATH TO A TRANSPARENT INDUSTRY

Quebec City, June 19, 2018 — OPTEL GROUP, a leading global provider of traceability systems for diverse industries, announced today that GeoTraceability, part of OPTEL, and Golden Agri-Resources (GAR), a leading global palm-based agribusiness, have launched a new model for engaging smallholder farmers and palm processing mills through traceability technologies.

Based on GAR’s industry-leading commitment to achieving 100 percent traceability to plantation (TTP) for its entire supply chain, the company has committed to providing financial support to ten of its third-party supplier mills to enable them to install and implement a suite of GeoTraceability solutions specifically adapted to the palm sector.

Together, GeoTraceability and GAR are calling for other companies in the palm oil supply chain to join this effort to increase access to sourcing information by sponsoring independent mills to set up oil palm traceability systems. Each installation costs only $12,000, and with this sponsorship, palm oil users can demonstrate a concrete commitment to supporting the industry and the 3 million smallholder farmers who earn their living from it.

“We’re very used to hearing that it can’t be done. But for palm, this statement is no longer accurate. We now have the technology to deliver traceability to plantation for the sector. It’s been developed, tested and proven with the industry leaders. But we can’t do this alone. Now we need other companies in the supply chain to step up and join the program. If you want the data, give the mills the tools to provide it”, said Pierre Courtemanche, CEO of GeoTraceability.

The Purpose of Traceability Smallholder farmers are an important part of the palm oil supply chain, as they control significant plantation areas. However, statistics show their productivity is lagging behind company-run plantations. They usually sell their oil palm Fresh Fruit Bunches (FFB) through intermediaries such as agents who in turn sell to the mill, hence mills have a hard time knowing and interacting with farmers directly. For a refinery who buys from hundreds of mills, each of them buying portions of raw material from smallholder farmers, the task of obtaining supply chain visibility might seem daunting.

GAR has demonstrated that achieving TTP is possible, but it takes investment in resources and time, which is often considered a barrier. There is also an assumption that mill owners and smaller players in the sector don’t want to share information in a transparent manner.

Daniel Prakarsa, Head of Supply Chain Sustainability for GAR, says: “Experience demonstrates that given the tools and opportunity there is a willingness to participate in traceability and the results can inform strategies to help engage smallholder farmers and help accelerate the transformation to more sustainable practices in the industry.”

“Through the process of achieving TTP for the 45 mills GAR owns, we have connected to 11,000 smallholder farmers supplying our mills through some 70 agents. We were encouraged to see that many smallholder farmers and agents embraced traceability and are eager to interact with us to improve quality, productivity and sustainability,” adds Mr. Prakarsa.

GAR procures raw material from more than 400 third-party palm oil mills. GAR is now sharing its experience with its third-party mills to encourage them to also engage dealers and smallholder farmers.

GeoTraceability for Palm Working with the largest and most forward-looking companies in the palm sector for over 4 years, GeoTraceability has developed a suite of software applications for traceability to farmer and field level. These have been designed to be implemented progressively as described below.

1. GeoWeigh: System set-up begins by installing a weighbridge data link at the mill. This application, which can be installed remotely, captures all deliveries at the weighbridge and categorizes them by supplier type. In an instant, the mill can better visualize and manage FFB input data and the refiner is better able to assess mill and supply base status.

2. GeoTrace: The next step is to train the delivery order holder or agent on a mobile app, that is designed to capture all farmers who contributed to a truck load which is then dispatched to the mill. Immediately, the agent has an electronic record of all evacuations dispatched to the mill, a list of all farmers who have contributed to each evacuation, and a weekly report mailed to his inbox to improve bookkeeping.

3. GeoSurvey and GeoMap: Once the traceability system is operating, the next stage is to survey farmers, map their field with a GPS device and associate all output from each field with a supplier in the database. As soon as the farmer is registered in the GeoTraceability database, he/she is a known supplier, who now has an accurate map of the farm for agri-input calculation and purchase, or land tenure issues, for example.

From the moment the system is set up, refiners and their buyers get visibility on the different supply channels and their relative importance. They gain the ability to assess the status of their suppliers and benchmark them. When fully deployed, this combination of solutions provides the highest level of physical traceability available for oil palm FFBs

GeoTraceability and GAR hope end users of palm oil will join in the sponsorship program to contribute to the rapid acceleration of traceability and uptake of sustainable practices in the sector.