Ioi Corporation

Topics: Palm oil, Balance sheet, Sime Darby Pages: 2 (506 words) Published: November 25, 2012
IOI Corporation Case Study
1. IOI strong growth was achieved through
a. Good plantation management practice
* Continues improvements on yields performance
* Maximize output from plantation and factories and minimize input to achieve a low-cost supply chain b. Diversified business base in palm oil industry, from downstream sector to upstream sector 2. IOI opportunities and threats

c. Opportunity
* Continues growth on palm oil in edible oils & fats market globally * Increase in non-food industry demand, like biofuel. Now, market is focus on renewable energy. Palm oil has been identified as one of the efficient and clean biofuel * Crude palm oil price getting higher and stable year-on-year. * Sales of properties at prime area especially in Singapore have been encouraging * Expansion in Indonesia with recent planting permit approval to the group’s directly owned plantations d. Threat

* Major revenue is come from export markets to Europe and US. Weak economic situation affect the demand on palm oil. * With limited land bank in Malaysia
* Unfavorable weather condition
* Shortage of estate workers
* Fierce competition from Sime Darby and Indonesia and upcoming markets like Africa and Brazil are catching up 3. Internal organization capabilities and it weakness.
e. Top 3 executive directors are family members. Decisions making are among family members, higher chances in power abusing and lack of transparency f. Has operations in many countries, expose to foreign exchange risk 4. Change and unchanged

g. Change
* Family based share holders lack of transparency. Need to maintain good relationship with stakeholders to increase the efficiency of the group h. Unchanged
* Tissue culture research, leading to cultivation of clonal palms with superior traits * Continuous...
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