Sawit Sumbermas Sarana (SSMS) CEO Vallauthan Subraminam is especially passionate when it comes to the potential of palm oil plantations to change lives for the better.

He has good reason to be – he himself is a product of plantations, a story of the son of a plantation worker made good.

“I come from the plantation,” he told The Palm Scribe in an interview at his Jakarta office, his base whenever not in Pangkalan Bun in Central Kalimantan, where SSMS’s plantations are located.

“I was born there, brought up and studied in a plantation and have seen first-hand how plantations have transformed many lives for the better.”

When he completed his high school in a plantation in Malaysia he was selected to train for life as a planter under the British. “Those days we received real training…in discipline and integrity.”

“These qualities became our strength and kept us going,” said Vallauthan. These strengths also came in handy when he moved to work in Indonesia after holding a series of senior posts in established plantations in Malaysia.

Vallauthan started work at SSMS in 2006, and in 2016 was appointed its CEO. In his time with SSMS he has refocused the company’s direction and improved its working practices, to the extent that it was named the Most Admired Company by Warta Ekonomi  magazine in May 2017 and set firmly on a path for expansion.

“We have to harness the full potential of oil palm plantations in a sustainable manner, and everybody needs to be committed,” he said, adding that expansion was necessary because palm oil revenues can help fuel national development as well as meet the global shortage in edible oils.

Not everyone, however, believes that expansion of the palm oil industry is a good thing. Many environmentalists, for instance, often say that the expansion of palm oil plantations has been responsible for deforestation and environmental destruction.

Vallauthan disagrees: “People outside the plantation industry say all the negative things about palm oil. But if you look deeper into the issue you will see that palm oil is a very small industry compared to cattle pasture and the cultivation of other vegetable oils.”

“Palm oil cultivation occupies only 1.83 percent of the total arable land, so it is a very small portion,” he said, adding that palm oil’s detractors are always exaggerating its impact to make it look really bad.

“The fact, however, is that the relatively small area under palm oil cultivation is producing so much oil”, said Vallauthan. “The yield is far better than the areas in which other products occupy and it produces such a high productivity, at cheap cost, provide so much work for the people in Malaysia, Indonesia and all those along the tropics.”

But is the negativity surrounding palm oil because of its detractors, or do palm oil plantations shoulder some responsibility for the current perceptions about their industry?

Vallauthan admits that some of the criticisms against palm oil plantations may not be wrong but they should also be mindful of changing norms over time.

The cut-and- burn system to clear land had been widely used since the earliest days of plantations, but 20 years ago the cut-and- burn system was abolished. All the big players realized the importance of discarding that practice and willingly went along with it. Today, large plantations have no reason to burn because whatever is cut down can be converted to compost to benefit the plantation.

The stigma of being cut-and- burn practitioners, however, has stuck with the large plantations and this is something they have to work hard at to correct. This is not helped by legal inconsistencies and the practice still being used by smallholders.

“The smallholders in Indonesia are in a unique position. The laws says that anyone with land less than 2 hectares can burn, so if you have 500 or 1,000 smallholder plantations burn their clearings the damage caused is as much as when large plantations were still engaged in that practice.

Moreover, if the fires from the smallholders spread to the larger plantations, the latter will almost certainly be blamed,” he said.

The way to get around the problem, said Vallauthan, is for the government to provide more support to smallholders by organizing facilities where they can convert the cut foliage from their cleared lands into compost, thereby freeing them from a need to burn them.

Another way is for the large plantations to work together with the smallholders, like SSMS’s cooperation with plasma farmers near their plantations.

“This is something that we developed for the community. It is well organized but in accordance with company policies and RSPO criteria. So, smallholder development can be organized and done sustainably – without burning – and they can also be like an adopted child where they can prosper in whatever they want to do. We even protect them from fire as their fates become our responsibility.”

One of Vallauthan’s missions at SSMS is to expand the amount of land under cultivation in the company’s plantations.

Palm oil expansion is a dirty word to many conservatives but Vallauthan views things differently. “For plantations, you need the economics of scale. Secondly the population is growing. The world needs more edible oils – especially palm oil as it has so many uses.”

“By planting more we are blessing the world with food crops. It can also be used for other purposes such as personal uses – lipstick and various other products. This oil provides large outputs. So why shouldn’t we expand such a productive oil rather than go for oil that has less productivity?”

“This oil is also healthy. But because of business competitors, they try to smear the name of palm oil as a bad oil. For example, years ago, many said that coconut oil is bad for your health. But now, the oil is known to have so many benefits and is a healthy oil.”

Vallauthan said there was merit to the argument that indigenous people in developing countries should be allowed to manage their own natural resources. “They should be able to manage their forest as other people in Europe and America have been doing for centuries.”

He affirmed that deforestation needs to be addressed, but the global community must also highlight reforestation in continents with very low forest cover. “It’s odd to me that people living in countries with very low remaining forest cover are criticizing other people with significantly more forest cover over deforestation.”

The way out for proponents and detractors of palm oil, said Vallauthan, is dialogue that would help the detractors understand the challenges here and also for them to help developing countries not to repeat their mistakes in the past.

It would also be good for NGOs to come and work with big plantation groups to correct and guide them so that things can be done in a better way, instead of just coming in to pick on them, saying that everything they do is wrong.

It is only when all parties are prepared to work together with the recognition that palm oil is the crop of the future that real progress can be made, he said. “It is only then that we will be able to transform the industry, not only from where it was to where it is but to be able to move on to where it needs to be.”

About Subraminam:

Valluthan Subraminam, 62, has been the chief executive officer of PT Sawit Sumbermas Sarana Tbk. (SSMS) since August 2016, after serving as director and chief operating officer of SSMS between 2013 and 2016.

He grew up in a plantation in Malaysia and after high school was selected to train at a plantation school where he learned how to manage plantations. In 1986, he received a Higher National Diploma in Management Studies from the Institute of Supervisory Management, United Kingdom.

Since then he has held a number of positions in blue-chip plantation companies such as Citra Borneo Indah (2007-2012), senior manager/ acting plantations controller of IJM Plantations Malaysia (2001-2007), and executive director of Domba Mas Group (2000-2001).

He currently resides in Pangkalan Bun in Central Kalimantan, where SSMS has its
operational headquarters.