IOI Group
IOI Corporation Berhad is a Malaysian agribusiness conglomerate founded in 1969 as Industrial Oxygen Incorporated Sdn Bhd, which evolved into a leading global palm oil producer through vertical integration of upstream plantations and downstream manufacturing operations.[1][2] Publicly listed on the Main Market of Bursa Malaysia Berhad since 1982, the company operates plantations primarily in Malaysia and Indonesia, alongside refining, oleochemical production, and specialty fats businesses across approximately 15 countries, with headquarters in Putrajaya and leadership under Chairman and CEO Shin Cheng Lee.[3][4][5] The group's core business revolves around sustainable palm oil cultivation, processing, and value-added products, emphasizing a fully integrated model that includes seed breeding, crop extraction, and renewables to drive long-term stakeholder value.[6][7] Despite self-proclaimed commitments to sustainability as a founding member of the Roundtable on Sustainable Palm Oil (RSPO) since 2004, IOI faced significant scrutiny in 2016 when suspended from the RSPO for non-compliance with principles on deforestation, land rights, and environmental protection, leading to lost contracts from major buyers like Nestlé and a lawsuit against the RSPO by the company.[8][9][10] Additional controversies include allegations of worker mistreatment, such as physical abuse, poor living conditions, and excessive recruitment fees for migrant labor, as reported in investigations up to 2021.[11][12] In response to pressures, IOI announced policies in 2017 to eliminate deforestation and human rights abuses from its supply chain, reflecting ongoing efforts to address environmental and social risks inherent to the palm oil industry.[13]
History
Founding and Initial Operations
The IOI Group traces its origins to October 31, 1969, when Tan Sri Dato' Lee Shin Cheng established Industrial Oxygen Incorporated Sdn Bhd as the foundational entity.[1][14] This marked the company's entry into the industrial gases sector, producing and distributing oxygen and related products for manufacturing and medical applications.[1] Lee, born on June 3, 1939, in Jeram, Kuala Selangor, Malaysia, had built practical business acumen from an early age, leaving school at 11 to sell ice cream before resuming education and entering the workforce at 17 as a rubber estate supervisor, eventually rising to estate manager by his late 20s.[15] Initial operations centered on scaling the industrial oxygen business amid Malaysia's post-independence economic growth, leveraging Lee's hands-on experience in resource management to establish efficient production and distribution networks.[1] By the mid-1970s, the group began tentative diversification, including early property ventures under Lee's direction, though the core remained industrial gases until broader expansions in the 1980s.[16] The company's public listing on the Kuala Lumpur Stock Exchange on July 28, 1980, as IOI Corporation Berhad, formalized its structure and provided capital for subsequent growth, with Lee assuming pivotal leadership roles.[17] These foundational years emphasized operational discipline and opportunistic scaling, reflecting Lee's transition from estate-level management to corporate entrepreneurship.[15]Expansion into Palm Oil and Diversification
In the early 1980s, under the leadership of Tan Sri Dato' Lee Shin Cheng, IOI shifted from its initial industrial gases operations toward diversification, beginning with property development in 1975 through housing projects south of Kuala Lumpur and entering the palm oil sector in 1982 via acquisitions of plantations.[1][18] This marked IOI's strategic pivot to resource-based industries, leveraging Malaysia's growing palm oil economy, where the company acquired stakes in oil palm estates to build upstream production capacity.[1] By the late 1980s and into the 1990s, IOI accelerated its palm oil expansion through key acquisitions, including Dunlop Plantations in 1990, which added significant rubber and oil palm estates in Malaysia, and subsequent restructuring into IOI Corporation Berhad in 1991, enabling focused growth in plantations spanning over 100,000 hectares by the decade's end.[1] The company listed on the Kuala Lumpur Stock Exchange during this period, providing capital for further diversification into downstream activities, such as the 1997 acquisition of Palmco Holdings Berhad, rebranded as IOI Oleochemicals, which positioned IOI as a major player in palm-based chemicals and refining.[1][19] Diversification extended beyond palm oil into integrated manufacturing and international markets in the 2000s, with IOI entering the oleochemical industry fully by becoming the world's largest producer of fatty acids and glycerine through expansions in Europe and Asia, alongside property investments in Singapore and China.[1] In 2004, the acquisition of Soctek (renamed IOI Loders Croklaan Asia) bolstered specialty palm oil products, enhancing value-added downstream operations.[1] These moves reduced reliance on raw commodity exports, with palm oil contributing over 70% of revenue by the mid-2000s while property and manufacturing segments provided stability amid volatile prices.[1]Key Milestones Post-2000
In the early 2000s, IOI Group expanded its resource-based manufacturing segment by acquiring Pan-Century Edible Oils Sdn Bhd and Pan-Century Oleochemicals Sdn Bhd, establishing itself as the world's largest oleochemical producer.[1] The group also became a founding member of the Roundtable on Sustainable Palm Oil (RSPO) in 2004, committing to certification standards for its plantations.[8] In property development, IOI commenced operations at IOI Mall Kulai in December 2001 and launched the 488-room Putrajaya Marriott Hotel in 2003 as part of IOI Resort City.[20] The 2010s marked international growth, including IOI's first entry into China in June 2010 with a 7.7-acre site for the IOI Park Bay residential project in Xiamen.[20] IOI Properties Group Berhad, the property arm, listed on Bursa Malaysia's Main Market in January 2014 via a demerger from IOI Corporation Berhad, raising approximately RM1.9 billion and creating one of Malaysia's largest developers with net assets near RM15 billion.[21] [20] That November, IOI City Mall Phase 1 opened with 1.5 million sq ft of net lettable area.[20] Further expansions included the March 2017 opening of the 634-room JW Marriott Hotel Singapore South Beach and investments in oleochemical manufacturing in Germany to bolster global operations.[1] [20] However, in 2016, IOI faced RSPO suspension over alleged non-compliance in Papua New Guinea plantations, including land disputes and lack of free prior informed consent, though it regained membership in 2018 after remediation. Post-2020, IOI emphasized sustainability and renewables, advancing ESG initiatives across palm oil and manufacturing while expanding properties like IOI City Mall Phase 2 in July 2022, increasing total net lettable area to 2.5 million sq ft and positioning it as Malaysia's largest mall.[1] [20] In March 2025, the group opened the 370-room Sheraton Grand Xiamen Jimei in China, furthering its Asian hospitality footprint.[20]Leadership and Governance
Founding Family and Ownership
The IOI Group was founded by Tan Sri Dato' Lee Shin Cheng, who established IOI Corporation Berhad in 1973 as a palm oil processing venture before its listing on the Bursa Malaysia in 1980.[15] Born in 1939 in Jeram, Kuala Selangor, Malaysia, Lee began his career in the rubber industry under challenging conditions before transitioning to palm oil plantations, leveraging his expertise in estate management to build the company's core operations.[15] He served as executive chairman until his death on June 1, 2019, at age 79, during which time he expanded IOI into a multinational conglomerate with significant holdings in palm oil, property, and manufacturing.[22] Following Lee's passing, control passed to his sons, Lee Yeow Chor and Lee Yeow Seng, who inherited substantial stakes and assumed key leadership roles.[23] Lee Yeow Chor, the elder son, became group managing director and CEO of IOI Corporation Berhad, overseeing strategic operations, while Lee Yeow Seng chairs IOI Properties Group Berhad, the property development arm.[16] The brothers are joint beneficial owners of majority stakes in both IOI Corporation and IOI Properties through private entities, maintaining family influence over the group's direction.[24] As of mid-2025, IOI Corporation Berhad's ownership structure reflects strong family control, with private companies—primarily family-linked holdings such as Progressive Holdings Sdn. Bhd.—owning approximately 53% of shares.[25] Institutional investors hold about 34%, including entities like the Employees Provident Fund of Malaysia at around 14.8%, while public and other shareholders account for the remainder.[26] This structure, concentrated via holding companies, ensures the Lee family's de facto dominance despite public listing, with no single entity disclosing direct personal ownership exceeding regulatory thresholds for substantial shareholders beyond these proxies.[27]Current Executive Leadership
Dato' Lee Yeow Chor serves as Group Managing Director and Chief Executive Officer of IOI Corporation Berhad, having assumed the role on 22 January 2014 following the passing of the company's founder, Lee Shin Cheng.[28] A Malaysian national born in 1966, Lee Yeow Chor joined the group in 1982 and has overseen its operations across palm oil, manufacturing, and property segments, emphasizing sustainability and global expansion.[29] [30] Tan Kean Hua holds the position of Deputy Group Chief Executive Officer, assisting in strategic oversight and operational management.[28] Kong Kian Beng is the Group Chief Financial Officer, appointed effective 1 March 2021, responsible for financial strategy, reporting, and compliance across the group's subsidiaries.[28] Prior to this, he served as Group Financial Controller since July 2017, with prior experience at PricewaterhouseCoopers as an audit manager.[31] The board is chaired by Tan Sri Peter Chin Fah Kui as Non-Independent Non-Executive Chairman, providing governance and advisory input without day-to-day executive duties.[28]| Position | Name | Appointment Date |
|---|---|---|
| Group Managing Director and Chief Executive Officer | Dato' Lee Yeow Chor | 22 January 2014[28] |
| Deputy Group Chief Executive Officer | Tan Kean Hua | Not specified[28] |
| Group Chief Financial Officer | Kong Kian Beng | 1 March 2021[31] |
| Non-Independent Non-Executive Chairman | Tan Sri Peter Chin Fah Kui | Post-2019 (exact date unspecified)[28] |
Corporate Governance Practices
IOI Corporation Berhad, the flagship entity of the IOI Group, maintains a board comprising 14 directors as of 30 August 2024, including seven independent non-executive directors (INEDs), one executive director in the role of Group Managing Director (GMD), and six non-executive directors, with 43% female representation exceeding the 30% diversity target set by Malaysian regulatory guidelines.[32] The board's composition ensures a balance of independence and expertise, with INEDs undergoing annual assessments to confirm absence of impairing relationships, thereby upholding objectivity in oversight.[32] The Board Charter, last reviewed on 13 September 2022, delineates roles, responsibilities, and delegation to management for operational implementation while retaining authority over strategy, risk, and sustainability.[33] Key board committees support specialized functions: the Audit and Risk Management Committee (ARMC) convenes six times annually to oversee financial reporting, internal controls, and enterprise risk management (ERM) via a semi-annual review framework; the Governance, Nominating and Remuneration Committee (GNRC) meets three times to handle board evaluations, succession planning, and remuneration policies; and the Board Sustainability Committee (BSC), established in June 2023, holds two meetings per year to integrate environmental, social, and governance (ESG) considerations into decision-making.[32][33] The full board conducted seven meetings in FY2024, focusing on strategic oversight and stakeholder interests.[32] Remuneration practices emphasize alignment with performance and sustainability, featuring fixed base fees (RM130,000 pre-FY2025, rising to RM150,000), meeting allowances (RM1,500 per session), and for the GMD, bonuses tied to ESG metrics from FY2025 onward; disclosures occur on a named basis for directors, with senior management remuneration aggregated except for the top five as permitted under the Malaysian Code on Corporate Governance (MCCG).[32][33] Ethical standards are enforced through a Code of Conduct and Whistleblowing Policy, promoting transparency and anti-corruption measures, while a dedicated Group Internal Audit function, staffed by 45 personnel and adhering to the International Professional Practices Framework, conducts risk-based audits.[33] IOI adheres substantially to the MCCG, applying all practices except 8.2 on detailed senior management pay disclosure, with annual internal Board Effectiveness Evaluations (BEE) assessing skills, independence, and contributions, and an external BEE planned for 2024/2025.[32][33] Shareholder engagement occurs via hybrid Annual General Meetings (AGMs) with 28 days' notice, real-time online access, and post-meeting minutes published within 30 business days; additional channels include 19 investor meetings in FY2024 and integrated reporting aligned with GRI standards since 2019.[33] These practices reflect compliance with Bursa Malaysia Listing Requirements and a commitment to robust internal controls, though external validations of governance indices, such as a reported 100% score in 2022 assessments, underscore ongoing improvements in transparency and accountability.Business Segments
Palm Oil Plantations
IOI Group's palm oil plantations form the core of its upstream operations, encompassing the cultivation of oil palm trees primarily for the production of fresh fruit bunches (FFBs) that are processed into crude palm oil (CPO) and palm kernel oil. The company manages approximately 172,000 hectares of planted oil palm area as of fiscal year 2024, with 98% classified as mature, spanning estates in Malaysia and Indonesia.[34] Operations emphasize high-yield hybrid seeds developed in-house, mechanized harvesting, and intercropping with crops like durians and bananas to enhance land productivity.[6] The plantations are distributed across multiple regions: in Malaysia, covering Peninsular states such as Johor, Malacca, Negeri Sembilan, Pahang, and Perak, as well as Sabah and Sarawak (totaling about 146,500 hectares); in Indonesia, focused on Kalimantan with around 21,400 hectares, including areas in Ketapang.[6] These estates, numbering around 98, support 15 palm oil mills (13 in Malaysia and 2 in Indonesia), enabling integrated processing of FFBs into CPO.[35] Yields exceed national averages, with groupwide FFB productivity averaging 1 metric ton per hectare higher than peers due to advanced agronomic practices, and oil extraction rates (OER) at select mills reaching 25.18% compared to Malaysia's 19.57% benchmark.[36] Sustainability efforts include RSPO certification for 99% of Malaysian estates and 73% of Indonesian ones, alongside full MSPO certification for Malaysian operations and a no-deforestation policy implemented post-2016.[36] The company has set aside conservation areas totaling over 6,300 hectares, including high conservation value (HCV) habitats and peatlands managed without drainage, while investing in methane capture from mill effluent and reforestation via initiatives like the RELeaf project (35 hectares rehabilitated).[36] Southeast Asia's first certified organic palm oil plantation spans 1,128 hectares in Pamol Kluang, Malaysia, with plans for expansion.[6] However, IOI has faced scrutiny for environmental and labor practices, particularly in Indonesia. In 2016, the Roundtable on Sustainable Palm Oil (RSPO) suspended the group for non-compliance, including unauthorized clearing of peat forest and HCV areas in Ketapang without permits, leading to lost contracts worth hundreds of millions.[9] Reinstatement occurred in 2018 after remediation commitments, though critics from NGOs like Rainforest Action Network argued divestment plans from conflict sites inadequately addressed community displacement risks in areas like Long Teran Kanan.[37] Labor audits have documented issues such as passport retention and below-minimum wages on Malaysian estates, prompting policy reforms.[38] These incidents highlight tensions between expansion and compliance in high-demand palm oil production, where IOI's yields reflect efficient land use but underscore the causal links between plantation scale and biodiversity pressures in tropical regions.[39]Resource-Based Manufacturing
IOI Group's resource-based manufacturing segment processes crude palm oil, palm kernel oil, and related biomass into higher-value products, encompassing refining, oleochemical production, specialty oils and fats, and palm wood processing. This downstream operations integrate with upstream plantations to form a vertical supply chain, with facilities in Malaysia and Germany serving global markets including Europe, Asia, and the United States.[40] Refining activities occur at two facilities in Malaysia: one in Pasir Gudang, Johor, and another in Sandakan, Sabah. These refineries produce palm oil fractions and lauric products derived from palm kernel oil, providing feedstock for internal downstream uses and exports. Both sites hold certifications from the Roundtable on Sustainable Palm Oil (RSPO), Malaysian Sustainable Palm Oil (MSPO), and International Sustainability & Carbon Certification (ISCC), ensuring compliance with sustainability standards.[41] Oleochemical manufacturing, a core component, utilizes four plants: two in Peninsular Malaysia (Penang and Johor, exclusively palm-based) and two in Germany (Wittenberge and Witten, incorporating palm oil alongside coconut, rapeseed, and sunflower oils). Products include fatty acids, glycerine, soap noodles, fatty esters, specialty derivatives, and pharmaceutical-grade items such as lipid excipients (e.g., IMWITOR®, MIGLYOL®) and ketone esters via subsidiary KetoLipix Therapeutics GmbH. The segment's combined annual capacity reaches 890,000 tonnes, positioning IOI as a major producer of vegetable oil-derived oleochemicals.[42][43] Specialty oils and fats production focuses on plant-based ingredients for food manufacturing and service industries, emphasizing sustainable formulations. This sub-segment operates primarily through a 20% stake in associate Bunge Loders Croklaan (previously IOI Loders Croklaan), enabling customized fats and oils for global confectionery, bakery, and dairy applications.[44][45] Palm wood processing transforms replanted oil palm trunks into engineered panels for furniture and construction, addressing biomass waste from plantation cycles. Managed by IOI Palm Wood Sdn Bhd, established in 2020, the facility in Segamat, Johor, began commercial operations in July 2023, marking Malaysia's first such plant using European-derived technology for high-performance, eco-friendly outputs like OnCore® panels.[46][47]Property Development
IOI Group ventured into property development in 1984, marking a diversification from its initial operations in oleochemicals.[20] The company's first housing project, Taman Mayang in Petaling Jaya, Selangor, launched in May 1985, establishing an early foothold in residential development.[20] [1] Subsequent expansions included the 930-acre Bandar Puchong Jaya township in Selangor and the 5,680-acre Bandar Putra Kulai comprehensive development in Johor, focusing on integrated residential and commercial spaces.[1] Through its subsidiary IOI Properties Group Berhad, established as a public-listed entity, the group has developed sustainable townships across key Malaysian regions such as the Klang Valley, Johor, and Penang.[48] The property development segment encompasses residential, commercial, and industrial projects, with a landbank of approximately 3,318 hectares as of 2024.[49] Flagship townships include IOI Resort City in Sepang, which houses IOI City Mall—Malaysia's largest retail destination—and IOI City Tower; Bandar Puteri Bangi; and IOI Industrial Park.[48] [50] Residential offerings feature terrace houses like Carillon 2 and SOHO units in I-nova at Johor Bahru, while industrial expansions target areas like Melaka with an 800-acre allocation for new parks.[51] [52] Developments emphasize green building practices, evidenced by Green Building Index (GBI) certifications and QLASSIC quality assessments.[48] Internationally, IOI Properties has pursued opportunities in Singapore since 1996, becoming a significant landlord with assets like Shenton House and the ongoing Marina View Residences on a 7,817-square-meter site.[16] Other Singapore projects include IOI Central Boulevard Towers in Marina Bay and the South Beach development, where full ownership was acquired in 2025 for SGD 834.22 million.[53] [54] Ventures in Xiamen, China, further diversify the portfolio, aligning with strategic growth in high-demand markets.[48] The segment's focus on integrated, sustainable enclaves has positioned IOI Properties among Malaysia's top-ten developers, with over four decades of experience.[48]Renewables and Emerging Ventures
IOI Group's renewables initiatives primarily leverage palm oil production by-products to generate energy and materials, emphasizing circular economy principles. The company operates 10 methane capture facilities that convert palm oil mill effluent (POME) into biogas, which is utilized as a renewable energy source for power generation, with four additional facilities under development.[55][8] These operations, initiated in 2013, capture methane—a potent greenhouse gas—and repurpose it, contributing to the group's decarbonization targets, including a 40% reduction in Scope 1 and 2 emissions by 2025 relative to 2019 baselines.[56] In 2020, IOI established IOI Palm Wood Sdn Bhd to process discarded oil palm trunks into engineered palm wood panels suitable for furniture and construction applications.[57] This venture diverts biomass waste from landfills, providing a renewable alternative to conventional timber and reducing deforestation pressures on natural forests.[57] Emerging ventures include a joint venture with Nextgreen Global Berhad, formed in April 2024 as Nextgreen IOI Pulp Sdn Bhd, to develop Malaysia's first large-scale zero-waste paper pulp plant in Pekan, Pahang.[58][59] Valued at RM600 million initially, the facility will utilize empty fruit bunches (EFB)—another palm oil residue—to produce 150,000 tonnes of wood-free pulp annually in Phase 1, targeting products like tissue and printing paper while minimizing water and chemical use through closed-loop processes.[60][61] In April 2025, the JV partnered with China's Xiamen C&D Paper & Pulp for an additional RM900 million investment, advancing the project toward industrialization by the second half of 2027 on an 81-acre site.[62][60] These efforts position IOI to expand into sustainable pulp and paper markets, addressing global demand for deforestation-free alternatives.[63]Financial Performance
Historical Financial Trends
IOI Corporation Berhad's revenue has exhibited significant volatility over the past decade, largely driven by fluctuations in global crude palm oil prices, which constitute a core segment of its operations. In FY2022 (ended June 30, 2022), revenue peaked at RM 15.58 billion, fueled by elevated commodity prices amid geopolitical disruptions including the Russia-Ukraine conflict, marking a substantial increase from RM 11.25 billion in FY2021.[64][65] This was followed by a contraction to RM 11.58 billion in FY2023 and further to RM 9.60 billion in FY2024, reflecting normalized prices and higher input costs.[64][66] Recovery ensued in FY2025 with revenue rising 18% to RM 11.33 billion, supported by improved refining margins and downstream demand.[66][65] Net profit trends mirrored revenue dynamics, with a high of RM 1.73 billion in FY2022, declining to RM 1.11 billion in both FY2023 and FY2024 due to squeezed margins from volatile feedstock costs and operational pressures in plantations.[64][66] FY2025 saw a rebound to RM 1.52 billion, aided by cost efficiencies and stronger oleochemicals performance.[66][65] Gross profit margins varied accordingly, averaging around 24-25% in peak years like FY2022 (RM 3.85 billion gross profit) but compressing to 21% in FY2024 (RM 1.98 billion).[64]| Fiscal Year | Revenue (RM billion) | Net Profit (RM billion) | Key Driver |
|---|---|---|---|
| FY2021 | 11.25 | 1.39 | Steady plantation yields |
| FY2022 | 15.58 | 1.73 | High CPO prices |
| FY2023 | 11.58 | 1.11 | Price normalization |
| FY2024 | 9.60 | 1.11 | Cost pressures |
| FY2025 | 11.33 | 1.52 | Margin recovery |
Recent Results and Projections
For the financial year ended June 30, 2025 (FY2025), IOI Corporation Berhad achieved revenue of RM11.33 billion, marking an 18% increase from RM9.60 billion in FY2024, primarily driven by elevated crude palm oil prices and higher fresh fruit bunch yields.[65][68] Net profit attributable to owners surged 37% to RM1.52 billion from RM1.11 billion in the prior year, bolstered by foreign exchange translation gains and improved plantation segment contributions, which accounted for the bulk of earnings growth.[68][69] Profit before interest and tax (PBIT) rose to RM1.70 billion, up 11% year-over-year.[65]| Fiscal Year | Revenue (RM million) | Net Profit (RM million) | PBIT (RM million) |
|---|---|---|---|
| FY2024 | 9,603.6 | 1,109 | 1,535.3 |
| FY2025 | 11,334.7 | 1,520 | 1,700.6 |