Overview of Our Supply Chain
[GRI 3-3, 204-1]
SDP is a vertically integrated palm oil business which means we are able to source the bulk of our supply from within our company.
At the upstream level, a total of 41 SDP mills source FFB only from our own plantations, representing 91% of our 2021 FFB supply. Our remaining 26 mills additionally buy from third-party estate owners and smallholders that either supply to us directly or indirectly through traders and collection centres. In 2021, they contributed to 9% of our total supply.
In 2021, at the downstream level, about 65.8% of the palm-based raw materials – crude palm oil(CPO), palm kernel (PK), crude palm kernel oil (CPKO), and refined palm product – processed at our downstream operations, Sime Darby Oils, originated from SDP’s own mills. The remaining 34.2% was sourced from third parties, of which 25.7% was sourced directly. Including SDP mills, we sourced directly from 1,105 mills under 494 parent companies. The remaining 8.5% of our palm-based raw materials was sourced indirectly from intermediaries and traders.
Our primary sourcing region is Malaysia, accounting for 52% of our total raw material volumes sourced in 2021, followed by Indonesia (27%), and Papua New Guinea and Solomon Islands (12%).
Less than 10% comes from Thailand and countries in South America and east Asia. Fortunately, there were no major supply chain disruptions at our downstream operations during the COVID-19 pandemic due to our vertical integration. SDP continues to work with our suppliers to meet ongoing demand.