“Palm Oil”.. A secret word between Malaysia & Egypt as a step on the way of UPDATING “common cooperation”

Ashraf AboArafe

Yesterday, the minister of Plantation Industries and Commodities (MPIC) Dr. Muhammad Khairuddin bin Razali, accompanied by Mr. Mad Zaidi bin Mohd Karli – Deputy Secretary General of Plantation Industries and Commodities, attended a dinner meeting, organized by PACIFIC INTER-LINK SDN BHD represented by Mr. Fouad Hayel Saeed Anam- the Managing Director of Pacific Interlink Group. This is his speech. , in one of the luxury Egyptian hotels on the banks of the Nile River.

The program was EMCEED by Ms Nida, Sales Hertez, who is the Officer charge of Bulk Oil shipment at Pacific Inter-link Representative office in Egypt. She asked Mr. minister Razali to give his speech as follows:

Assalamualaikum warahmatullah and a very good evening to:

Mr Zakaria El-Shafie
Chairman of Chamber of Food Industries and Commodities

Mr. Shahabudeen Adam Shah,
Charge d’Affaires of Malaysia to the Arab Republic of Egypt

I am so honored to be with the guests and invitees tonight. For your information, our our working visit to Egypt is to serves as a follow up to the recent discussion between our Prime Minister, Tan Sri Muhyiddn Yassin and your President Mr Abdel Fattah Al Sisi, to foster greater cooperation particularly in economy, trade, and infrastructure development.

Ladies and gentlemen

1. For yor information there is no issue related to commodity trade between Malaysia dan Egypt. Further more, at present there is no coorperation or Memorandum of Understanding between our two countries in ari-commodities.

2. The total value in trade in agri-commodity products for 2020 values at US$38.5 million and the trade balance US$25.5 million, an increase of 33.07 percent compared to 2019 and favourable towards Malaysia. The three major agri-commodity products exported to Egypt were palm-based products (US$187 million), followed by rubber (US$44.2 million) and cocoa (US$21 million).

3. Egypt also adopts a duty-free import policy. This policy has encouraged the export of RBD palm olein (refined, bleached and deodorized palm oil) and palm oil to Egypt. This trade policy has indirectly made Egypt a potential hub for re-exports to neighbouring countries such as the Common Market for Eastern and Southern Africa (COMESA) countries.

4. The Egyptian Government’s efforts to develop the livestock industry will also require high-quality animal feed, which will open up opportunities for the export of palm kenel cake (PKC) from Malaysia.

Ladies and gentlemen

5. Malaysia view Egypt as a well-established and largest palm oil market in Africa. We are happy that this nation’s duty structure for vegetables oil is favourable Malaysian palm oil due to its competitive price. In this regard, we are planning to penetrate Sudan, Libya, Algeria, Yemen and other neighbouring countries via Egypt.

6. I wish to highlight that Malaysia exported 155,747 tonnes of palm oil to Egypt in 2020, an increase of 83% compared to 2019. Malaysia truly appreciates Egypt support for our palm oil. We are truly interested in matching our palm oil industry players with related Egyptian industry players, particularly the food manufacturing sector and food services sector.

7. We have noted that Multinational companies operating in Egypt are demanding Mass Balanced Oil. We want to emphasise that the Malaysian palm oil industry is well regulated and will soon be 100% certified under the Malaysian Sustainable Palm Oil Certification (MSPO).

8. Malaysia foresees opportunities for palm oil market expansion through a joint venture with local Egyptian companies in the area of technological transfer, expertise and capital. Collaboration through a joint venture will ensure the availability of Malaysia Palm Oil in the local market, reducing the waiting time, risk of price fluctuation, and transaction risk, as well as ensuring the price is close or equal to the Indonesian Palm Oil. There will be a presentation from Malaysian Palm Oil Board (MPOB) for you after this so that you can all find out more about the prospects, research and palm oil industry in Malaysia.Ladies and gentlemen

9. I would like to take this opportunity also to introduce my portfolio which cover other sector like rubber and timber. As for the information, Malaysia exported rubber products worth US$33.2 million to Egypt in 2020, reflecting a compounded annual growth rate (CAGR) of 7.7% from 2018 to 2020. We are also the world’s No 1 exporter of rubber gloves (mostly medical gloves) with 59% of market share in 2020.

10. Rubber gloves are the main products exported to Egypt by Malaysia with an 80% market share and export value US$19.2 million in 2020. Other main rubber products exported by Malaysia to Egypt include latex threads, new tyres, footwear and rubber automotive components.Malaysia is offering its expertise to assist Egypt in developing its rubberised road. The rubberised road is a new technique developed by the Malaysian Rubber Board to prolong the lifespan of the bitumen road surface by using Cuplump Modified Asphalt (CMA) for road construction or resurfacing works.

Ladies and gentlemen

11. On the trade of timber and timber products, I am pleased to note that Egypt has imported around US$1.1 billion worth of timber products from the world in 2020, most of which are sawntimber, plywood and fibreboard. Of this, the export value of timber products exported from Malaysia to Egypt stood at US$3.0 million (RM12.8 million). The major products being exported to Egypt include fibreboard, wooden furniture and Builders’ Carpentry and Joinery (BJC).

12. The wood-based industry in Malaysia brought in US$5.24 billion (RM22.02 billion), contributing about 2.2% to the country’s total export earnings, 1.6% of the country’s GDP in 2020 and provide employment to over 140,000 persons. With over 1,900 mills in Malaysia, the industry offers a wide range of timber products such as sawntimber, panel products (plywood, MDF, particleboard, chipboard, LVL), mouldings, joinery products (e.g. decking, wooden flooring, doors, staircases, laminated scantling, window frames and picture frames) and wooden furniture (indoor, outdoor and office).

13. I am pleased to note that the positive construction industry outlook in Egypt due to the Egyptian Parliament approving and allocating a budget of 2.46 trillion Egyptian pound or US$158 billion for the financial year 2021/22. Some of these budgets are earmarked for infrastructure improvement projects including the construction of new hospitals, highways, railway system, schools and social housing. It is hope that more Malaysian timber and timber products would be exported to Egypt to fulfil the demand for building materials in the construction sector.

14. One of the potential product segments in Egypt that Malaysia could explore is sawntimber, the biggest imported timber product in Egypt valued at US$692.7 million in 2020. Malaysia’s sawntimber are primarily targeted towards the upscale villa projects as well as beach resorts in the Sinai Peninsular (Sharm El Sheikh). Our export of sawntimber to Egypt last year was US$0.08 million.* Closing Remarks!

I wish to thank you to all guests for this fruitful dinner. On behalf of the Malaysian Government, I want to thank you all for the hospitality rendered to us and allow me also to extend the invitation for you to visit Malaysia and continue our discussion in Malaysia.

MINISTRY OF PLANTATION INDUSTRIES AND COMMODITIES
4th JULY 2021

Mr. Fouad Hayel Saeed Anam, the Managing Director of Pacific Interlink Group, was asked by Ms Nida to inaugurate the meeting and gave his speech as follows:

Thanks God and peace upon his prophet Mohamed..

Honourable Minister of Plantation Industries and Commodities, H.E. Dato’ Dr Mohd Khairuddin Aman Razali Deputy Secretary-General of Plantation Industries and Commodities , Mr Mad Zaidi bin Mohd Karli Honourable Chairman of Chamber of Food Industries subdivision for fats and oils: Mr Zakaria El-Shafie Our Special guest, The Chief Executive Officer of Savola Foods Group: Mr Sameh Hassan All our esteemed guests and members of the Press.

It is indeed an honour and a pleasure to be here in this great ancient Egyptian city of Cairo, addressing all of you. It is an even greater pleasure to have the Honourable Minister and his delegation join us here from Malaysia, on this important bilateral visit to meet with you all. As most of you are aware, Pacific Inter-link group was incorporated in Malaysia in the year 1988. In the last 3 decades, our group has grown to encompass a diverse range of business activities such as Trading, Manufacturing, Refining, Tank-Page 2 of 7 terminal operations, Marketing of Consumer Products & Shipping Services.

We have offices & manufacturing units in Malaysia & Indonesia, and we now distribute our products to over 70 countries across the world. The core activity of our group in Southeast Asia remains Palm Oil. Egypt was amongst the first destinations that we began servicing from Malaysia, in year 1995. In these past 26 years, we have continuously serviced the requirements of buyers in Egypt & have pioneered many new facilities & systems for them. Egypt has always been PIL’s focal market and Insha’Allah we will continue to develop our presence in this large market which provides vast business opportunities and greater potentials for further growth. As the world’s population grows, so does the demand for Food. Edible fats form a major part of this dietary requirement. Therefore, the supply and distribution of Palm Oils assume great importance, for countries to meet their Food Security requirements.

To meet with the increasing demand from our buyers in various countries, Pacific Inter-link has been steadily strengthening our Refining capacities, our storage facilities and tying up with large & reliable ship owners to ensure a steady & timely supply of Palm Oil. Pacific Inter-Link has grown to become amongst the biggest suppliers of Malaysian Palm Oil. Currently, we supply over 2.5 million metric tons of Palm Oil products annually, across several countries in the world. One of our focus areas has been the countries based around the Red Sea.

We are today the single largest supplier of Palm Oil products to this region, meeting the requirements of all big & small buyers in these countries. To meet with the increased demands from our buyers in just the Red Sea region which includes Egypt, we now have a minimum of 2 to 3 MR-sized vessels with a capacity of 45,000 Metric Tons each per month. Our refineries have expanded in capacity to gear up to provide a continuous supply of Palm Oil products, throughout the year.Page 4 of 7 The past 18 months have been one of trials & tribulations for mankind, as this pandemic has steadily spread across the entire world and affected our lives.

Many countries have experienced lockdowns which have led to the freeze of many business activities and kept most of us working from home for many months. This has posed serious challenges to Pil operation. Alhamdulillah, we have managed to adapt to the new norms and have been continued to provide our best services to all our stakeholders in Egypt and other countries. As the spread of this pandemic grows, the governments in Malaysia & Indonesia are making all efforts to contain this spread.

This has created challenges in our marine transit operations, with all vessels facing regular testing and quarantine at all loading ports, creating diversions and delays and in some cases where the crews are found to be infected. Nevertheless, PIL team has been tirelessly working to ensure that we find solutions so that shipment arrangements could be made with fewer interruptions. We pray to Allah SWT that this pandemic will be far behind us by end of this year.Page 5 of 7 On another note, as the world is seriously looking towards the sustainability approach Pacific Interlink has embarked on its sustainability journey.

Our company has established its Sustainability Governance structure and policies to ensure transparency and create values for the organization. We have established a dedicated department to manage this ongoing process which has created awareness and cultural changes among our employees and stakeholders to be more responsible towards our environment. Our sustainability team is being supported by world-renowned experts in this field. I personally oversee the progress made on this aspect on a regular basis. PIL strictly adhere to No Deforestation, No Peat, No Exploitation (NDPE) practices and recognizes Human Rights responsibilities. This supports PIL’s efforts to ensure an environmentally and socially accountable palm oil industry. Our Responsible Palm Oil Policy was released on 31 December 2018 and has been effective ever since. PIL also has received new requirements of 3MPCD & GE especially for MNC clients who service European markets.

In order to meet this need, we have invested in testing equipment Page 6 of 7 and have upgraded one of our refineries in Malaysia to produce the above requirements to cater to the needs of these clients. I would like to thank the Honourable Minister and his ministry for the support that they have been extending to us and other industry players through MPOC and MPOB. As all of us are aware, Malaysia has been the leading research hub for product development for palm oil without compromising on quality and today we can see a range of products with the use of palm oil in cosmetics, medications and others.

The success of MPOC being a palm Oil promoting agency has helped pave the way for all industry players to increase their business volume globally as the consumer trust in palm oil has grown rapidly and users have realized that palm oil provides the best value for money. Finally, I would like to thank all our clients and stakeholders for your unwavering support and loyalty. PIL will continue to render its best service with customer-friendly policies to achieve a mutually benefitting relationship with its clients and stakeholders. I would like to thank all of you for your presence here today and wish you all a very good evening.

* About!

Pacific Inter Link (PIL) was incorporated in 1988 in Kuala Lumpur Malaysia to promote the export of various commodities and services from Malaysia and the Far East to the Global Markets. Envisioning the potential of Asia as an economic powerhouse, PIL rapidly grew to become one of the leading export houses in Malaysia.

The PIL group is actively engaged in a diverse range of activities such as Manufacturing, refining, tank terminal, trading, marketing of Consumer Products.