Asian Agri and the future of Palm oil Essay

Is Tanoto correct that palm rock oil has a quick-witted future?Tanoto is correct that palm oil aka the golden corp of Southeast Asia has a bright future. It is precise economic to be produced, due to its high yield and low cost of end product compared with production of other nutrition oils. With higher economic growth, the demand for food and fuel is rapidly growing in the Asian countries of India and China. So, it is likely that we see a similar positive effect on the demand for palm oil. Additionally, in todays world, there are health concerns regarding the rise in the use of trans-fat. This has lead consumers and packaged ethicals to companies limit its use. The increasing health consciousness has would contribute to increased use of this commodity as palm oil is trans-fat free. Furthermore, with increasing requirement for biodiesel, palm oil could well become an important come apart of the renewable fuel and play a vital role in the energy business.If yes, how should Asian Agri modulate its position? If no, what should Yeos strategy be? If unclear, what could Yeo do to improve the globular use of palm oil?I see due to the increasing role that palm oil has to play in the global economy, Asian Agri should strengthen its position in the industry and promote the global use of palm oil. They could do this through Sustainable ProductionAsian Agri should aggressively stimulate the use of sustainable palm oil. They bed do this by keeping to the set of economic, environmental, legal, and social standards set, in the production process of palm oil. Since sustainability get out be an important factor for the company to differentiate itself from competitors and to stay strong in the industry, the company should hold back to get all its properties certified as sustainable. They contribute also train middle managers, supervisors and workers on sustainable palm oil production.ExpansionWith palm oil demand rising, Asian Agri should continue to lard thei r plantation size. Although there are visible difficulties to acquire land in Indonesia, the company should not forswear their expansion plans. I feel that it will be a true choice to diversify geographically, predominantly to countries in Africa and South America where land is abundant. This helps the company to diversify risk both politically and financially. It makes good financial sense to not put all their eggs in one basket Indonesia, and good political sense as political instability or riots are a very substantial possibility in Indonesia. Additionally, by growing its trading and sourcing operations, Asian Agri can derive more honour from its market expertise and refining activities. This will help the company to establish direct linkages with its customers at the terminal market. This could also help reduce supply chain related expenses for of the company.Marketing and PromotionI think Asian Agri can undertake more marketing and promotional activities, which could hel p them increase market share. They can play off the fact on health advantages that palm oil has over other edible oils. The point that palm oil is trans-fat free can be put to good use in the marketing campaign, which will help address increasing concerns of trans fat consumption. They can do this through advertisements, rule of social media, and distribution of brochures that will help educate customers. With projections indicating that global palm oil production would approximately double by 2020, it makes sense that Asian Agri to be proactive in its expansion, marketing and promotional plans. Although we issue the rising anxiety from environmental NGOs and other challenges, the fact remains that palm oil business has very high potential, given sustainable production and good promotion.