Johor Plantations Group Berhad (JPG), a leading upstream palm oil producer in Malaysia, is setting its sights on expanding its reach. With 23 estates and five palm oil mills, JPG has a strong upstream presence as well as a long and positive track record in producing premium oils responsibly and dedication to environmental stewardship.
Having just completed its listing on the Main Market of Bursa Malaysia, JPG will embark on a strategic move to enter the downstream business of palm oil production. This venture marks a significant step towards JPG’s goal of becoming a fully integrated player within the industry by increasing revenue and profitability through expanding product offerings and enhancing competitiveness. As JPG is a predominantly Johor-based plantations company, the new move will also unlock numerous economic and social benefits for the state and is well aligned with the Maju Johor 2030 development plan.
Venturing Downstream to Accelerate Growth
To kick off the Group’s downstream growth, JPG has allocated approximately RM171.6 million from its listing proceeds for the development of an integrated sustainable palm oil complex (ISPOC) located in Pasir Logok Estate, Johor. The ISPOC will consist of a refinery focused on producing specialty oils and fats, a palm oil mill for processing fresh fruit bunches (FFB) into crude palm oil (CPO), a kernel crushing plant to produce palm kernel oil (PKO), a bio-energy power plant for sustainable energy generation, and an animal feed mill plant for further value creation.
A joint venture company, JPG Fuji Sdn Bhd, was established in partnership with Japan-based Fuji Oil Asia Pte. Ltd (Fuji Oil) to develop and manage the refinery. This collaboration is a win-win for all parties as Fuji Oil contributes capital and established expertise in refinery operations. Fuji Oil is renowned for its high quality, technological advancements, and focus on sustainable practices. It has a wide base of reputable clientele, including numerous multinational companies in the confectionery and food sectors. Meanwhile, JPG's strengths lie in its quality production and simplified, traceable, and sustainably certified supply chain which produces high-quality CPO. Additionally, JPG's localised supply chain in Johor will reduce risks and enhance reliability.
Prior to the partnership, JPG had established a market for its products by focusing on sustainability and quality, particularly low contaminants. This focus enabled JPG to obtain higher than average Malaysian Palm Oil Board (MPOB) prices for its CPO and PK. The completion of the downstream refinery will allow JPG to enter the speciality oil and fats market, enabling the company to capture additional margins with its expanding range of product offerings.
ISPOC brings many benefits to enhance JPG’s production processes. For example, the integrated complex streamlines operations by consolidating all manufacturing stages in a single location. Secondly, the complex’s proximity to existing JPG plantations keeps logistical issues and environmental impacts, to a minimum.
A major highlight of ISPOC is the on-site kernel crushing plant – a first for JPG. This eliminates the need for off-site transportation as the PK from FFB can be processed in the same location as CPO. Furthermore, the waste from crushing the kernels can be transformed into valuable animal feed in the on-site feed mill plant, creating a closed-loop system that embodies a sustainable circular economy
By utilising palm oil mill byproducts, specifically biomass and biogas, to produce green energy - this will create new value within the circular economy, efficiently utilising resources. Furthermore, the development of ISPOC will rely entirely on renewable energy to produce sustainable palm oil products, which can minimise environmental impacts such as deforestation and biodiversity loss, leading to a potential reduction of greenhouse gas emissions.
Empowering the Community, State and the Nation
Aside from streamlining JPG’s operational capabilities, ISPOC will create numerous spillover effects that will positively impact stakeholders across the value chain. Through the joint venture with Fuji Oil, JPG will leverage Fuji Oil’s expertise to enhance internal talent upskilling in addressing the industry’s evolving needs. This initiative extends towards the local Johorean community, as training programmes for youths to build capacity in the food production industry are currently being developed with the support of Fuji Oil.
The presence of ISPOC itself will also stimulate economic activity throughout Johor. As a multi-stakeholder platform promoting sustainable palm oil practices, the complex will attract both domestic and foreign investors aligned with this growing market. This can translate into a boost for Johor’s economic development in several ways. Firstly, ISPOC will directly create job opportunities in the region. Already, 185 positions have been identified for local workers, and this number is likely to grow as ancillary businesses emerge to support the complex.
Secondly, the greater palm oil ecosystem spearheaded by ISPOC will boost the development of supporting industries such as companies involved in logistics and maintenance. This ripple effect will necessitate further synergies with the public sector, as upgrades in Johor’s infrastructure such as roads, irrigation systems, and transportation networks are needed to efficiently handle the increased economic activity. This will further strengthen Johor’s competitiveness as a hub for sustainable palm oil production, supporting even more investment opportunities and creating a virtuous cycle of growth.
In addition, JPG has always taken pride in being a Roundtable of Sustainable Palm Oil (RSPO)-certified producer since 2009, and the downstream venture will only strengthen this commitment. 186 smallholders have been uplifted through JPG’s Smallholder Inclusion Programme by virtue of RSPO certifications indirectly related to the ISPOC project.
“The development of our ISPOC marks an exciting chapter for us. JPG has embarked on this journey with clear objectives and aspirations, fulfilling our growth strategy and becoming the catalyst in realising the State’s socioeconomic goals. Moreover, this initiative underscores our commitment to producing sustainable essentials for mankind, driving positive change and uplifting the livelihoods of our communities,” said Mohd Faris Adli Shukery, Managing Director of Johor Plantations Group Berhad.
With a targeted completion date in the third quarter of 2026, ISPOC promises significant revenue growth and demonstrates JPG’s commitment to sustainability and economic empowerment while also aligning with Malaysia's future aspirations. As JPG embarks on this new phase of growth, all eyes are on them to see how they will continue to shape the palm oil industry and the nation as a whole.
