P&G, BASF and Cargill partner to produce sustainable certified coconut oil in the Philippines and Indonesia

Sustainable certified coconut oil in the Philippines and Indonesia

BASF, Cargill, Procter & Gamble (P&G), and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) have collaborated to create and push production of a sustainable certified coconut oil (SCNO) and transparent supply chain of coconut oil in the Philippines and Indonesia.

Coconut oil production

The Philippines and Indonesia were selected as the Asia-Pacific regions of choice, as the countries are two of the world’s largest coconut producers and exporters of coconut-based products.

Under the German Federal Ministry for Economic Cooperation and Development’s programme (BMZ), the development partnership will focus on the Southern Mindanao and Southern Leyte regions in the Philippines and Amurang in North Sulawesi, a province of Indonesia.

Coconut oil is produced using the drupe’s kernel, unlike palm oil, which extracts oil from the fruit’s pulp. As a result, coconut oil provides a sustainable alternative to palm oil and has seen considerable growth in recent years as it is used in beauty and personal care items.

By working with coconut farmers, who typically suffer from a lack of financing and training resources, the newly-formed partnership can provide teaching and support on Good Agricultural Practices (GAP), intercropping and enhanced farm management skills.

Approximately 3,000 smallholder farmers in the Philippines and 300 in Indonesia are expected to benefit from the programme, with 800 receiving additional training on the Sustainable Agriculture Network (SAN) standards to enable them to apply for Rainforest Alliance certification.

The partnership

The programme also aims to improve the transparency of the supply chain and will see Cargill-produced crude and refined oil handled by BASF and P&G for ingredients in the personal care and health markets. Supporting the federal government in international cooperation for sustainable development, GIZ brings its understanding of coconut usage and trends, along with sustainability standards as it works closely with government agencies including Philippine Coconut Authority (PCA) and the Agricultural Training Institute (ATI) in the Philippines.

Cargill, BASF and GIZ previously partnered between 2011 and 2015 on the “Nucleus of Change” project in the Philippines, which saw the first 300 coconut smallholder farmers reach Rainforest Alliance Certified coconut farm status.

“These initiatives show that there is high commitment by all partners to further promote the production of certified, sustainable coconut oil,” stated Harald Sauthoff, Vice President Global Procurement Natural Oils and Oleochemicals at BASF.

“The results that have been achieved in the project ‘Nucleus of Change’ in General Santos in the Philippines until today now lay the foundation for this extended cooperation with Procter & Gamble as a new partner,” Sauthoff added.

Sustainable certified coconut oil plans

Through its efforts to help “smallholder coconut farmers and spearhead a supply chain of sustainable coconut oil” since 2011, Efren Barlisan, General Manager, Cargill Grain and Oilseed Supply Chain, Philippines emphasises how this latest project is its aim to “train more farmers in the Philippines, expand reach to train farmers in Indonesia and further advance the supply of sustainable coconut oil in the world”.

As part of the partnership, P&G is committing to drive the sustainability of its coconut oil supply, which can then be used in a variety of personal care products. With an ongoing focus on building sustainability throughout production and its supply chain, P&G recently published its first citizenship report which expands upon its previous sustainability report.

“Our (SCNO) partnership will lead to better practices for our industry, and improved lives of the smallholders in our supply chain,” said Jack Ryan, Vice President, P&G Chemicals/Flavour & Fragrances.

International non-profit organisation, The Rainforest Alliance, will focus on sustainable agriculture and development to create a sustainable supply chain.  

Matthias Radek, Chief Advisor for Partnership Projects in Agriculture, GIZ Philippines, who is managing the development partnership locally iterated: “Like the predecessor project ‘Nucleus of Change’, this joint initiative is not only a chance for the industry to make an important supply chain more sustainable, but it also creates new opportunities for local smallholder coconut farmers to increase their incomes.”

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