External Environment
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Opportunities
Expansion into China
IOI had expanded acquisition interest which is construction of their new plant in Xiamen, the People’s Republic of China, which is expected to be completed by end of 2016.
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Expansion of Specialty Fats Plant in Johor
IOI’s expansion of specialty fats plant in Johor is indeed a wise decision and could provide opportunities for growth in this business segment. It is in line with the Malaysian government’s plan to transform Pasir Gudang in Johor into a major palm oil processing centre. Furthermore its close proximity to Singapore provides opportunities to tap into the demand of the Singapore market
Strong Palm Oil Consumption Growth in Several Regions
Growing of palm oil in Europe market had lead IOI expansion its refinery in Rotterdam This increased refinery capacity provides opportunities to serve IOI’s Europe markets better.
Growing Palm Oil Market in Europe
Strong consumption of palm oil in region such as China, Africa and USA provides opportunity for IOI to export palm oil product to the regions.
Emerging Biofuel Market
Biofuel are now more user-friendly than petroleum because its emit low carbon. According to Malaysian Palm Oil Council (MPOC), predicts that palm oil will qualify as second generation biofuel in reducing carbon dioxide emission by more than 80 per cent. Emerging in Biofuel market not only help to produce more environment product but also increasing the revenue of IOI
Threats
Threaten of existing rivals
Intense competition in palm oil plantation industry in Malaysia had become threats to IOI, there are more big player in industry such as Felda Global Ventures Holdings (FELDA), Risda, Kepong Plantation and also the merged of competitor such as Goldlen Hope, Gutherie and Sime Darby become one biggest palm oil producer in Malaysia become the major threat of IOI.
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Constant Pressure from Non-governmental Organisations (NGOs)
Constant Pressure on the environment issue, natives deprived of land issue and wildlife protection programme such as, the environmentalists also stress the need for Malaysian companies which own and operate oil palm businesses in Indonesia to use the same methods in Indonesia such as to practise sustainable practices as practised in Malaysia even though it might not be required by law in Indonesia.
Lack of Land Bank for Expansion
Due to the high volume of the land development in Malaysia result of the delineated land for agriculture almost used up, there is lack of land bank for expansion for IOI in Malaysia.
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Unfavourable Legislation and Government Policies
Palm oil production is vital for the economy of Malaysia, which is the world's second- largest producer of the commodity and this industry brings about 491000 employment opportunity. An example of this is the Windfall Tax. As the price of crude palm oil soars, oil palm planters became more concerned about the much higher windfall tax which they have to pay for.
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Dampening Economic Outlook
Recently, the dampening economics suffered from the US and the oil crude oil crisis that result weakening the Malaysia currency had continue dampening Malaysia's export value.