Ioi Group Background Essay

IOI Corporation Berhad or commonly known as IOI, was incorporated on 31 October 1969 as Industrial Oxygen Incorporated Sdn Bhd. IOI is one of Malaysia’s biggest enterprise group that started from industrial gas manufacturing. It ventured into property development in 1982, followed by oil palm plantations in 1985. As at June 2009, IOI Group employs more than 30,000 personnel of more than 23 different nationalities in 15 countries. IOI is listed on on the main board of the KLSE (also known as Bursa Malaysia).

Subsidiaries IOI Properties Berhad and IOI Oleochemical Industries Berhad (Industrial Products) were separately de-listed from the exchange and fully privatized under IOI Corporation Berhad in April 2009 and March 2006, separately. IOI also owns 2 resort hotels that is Marriott Putrajaya Hotel and Palm Garden Hotel in Putrajaya. In 2005, IOI Properties was ranked second in The Edge’s Malaysia Top 10 Property Developers Award. The group is currently headed by Tan Sri Lee Shin Cheng, the executive chairman.

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Lee has two sons and four daughters, all were trained as lawyers. Lee and his family’s control of IOI Corporation is held via Progressive Holdings Sdn Bhd. Although all of Lee’s children work for the company, sons Dato’ Lee Yeow Chor and Lee Yeow Seng are given more prominence as seen in their representation in IOI Corporation Berhad board of directors. • Plantation Plantation is IOI’s biggest income generator. As at June 2009, about 65 per cent of the conglomerate profits comes from its oil palm plantations.

The group operates 152,000 hectares of oil palm plantations in Malaysia and 83,000 hectares in Indonesian. It has 12 palm oil mills with total milling capacity of 4. 1 million tonnes per year at its 80 estates throughout Malaysia. With oil yield of some 6 tonnes per hectare per year at its matured estates, IOI is the most efficient plantation company in the world. Malaysia’s oil palm average yield for the last 20 years is stagnant at 4 tonnes per hectare per year. • Property

IOI’s property businesses can be categorized into real estate development and property investment holding branching out to leisure and hospitality. The property segment contributes around 18 per cent of the group’s earnings. • Manufacturing of oleochemicals and specialty fats IOI is the largest vegetable oil based oleochemical manufacturer in Asia – held under wholly-owned entities IOI Oleochemical Industries Bhd and Pan Century Oleochemical Sdn Bhd with a combined capacity in excess of 750,000 tonnes per annum.

These plants produce fatty acids & esters, glycerine, soap noodles, fatty alcohols, and metallic strearates – that have various industrial applications in the production of food, pharmaceutical, cosmetics, personal care, home care, industrial detergent/ surfactants and lubricant products. Products derived from oleochemicals are more readily biodegradable and hence do not pose a threat to the environment. This is because oleochemicals are derived from renewable resources, as compared to petrochemicals which are obtained from exchaustible or non-renewable petroleum.

IOI’s specialty fats businesses are operated under Loders Croklaan with manufacturing facilities in the Netherlands, North America, and in Malaysia (with combined production capacity of more than a million tonnes per year). Loders Croklaan’s customer base include global food giants like Unilever, Nestle, Cadbury and Kraft. IOI’s sales offices are spread out in 8 countries serving customers in 65 countries. Specialty fats provide special function and/or unique solution in food applications and branches out to nutrition / health supplement applications. These fats are use in pastries, confectionery, snack foods and ready-to-eat meals.


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