This Malaysian palm oil producer operated plantations and processing mills across Sabah and Sarawak, producing approximately 480,000 metric tonnes of crude palm oil (CPO) annually. The company's supply chain — from smallholder collection to processing, storage, and export — was complex, involving over 2,300 smallholder suppliers, 12 collection centers, 4 processing mills, and logistics across Borneo's challenging terrain.
Supply chain waste was a critical concern. An estimated 7.8% of fresh fruit bunches (FFB) were lost between harvest and processing due to delays in collection, suboptimal routing of collection trucks, and improper storage during transit. Each percentage point of waste represented approximately MYR 18 million in lost revenue. Additionally, processing mill efficiency varied significantly — oil extraction rates ranged from 19.2% to 22.8% across the four mills, indicating that operational optimization could yield millions in additional output.
Regulatory and market pressure for traceability was intensifying. The EU Deforestation Regulation required full traceability of palm oil to the plantation of origin by 2025, and major buyers were demanding RSPO certification with real-time supply chain visibility. The company's existing traceability system relied on paper-based documentation at smallholder collection points — a process that was error-prone, easily falsified, and impossible to audit at scale.
Pertama Partners conducted an AI Readiness Audit that mapped the entire supply chain from smallholder farms through to port-of-export, including GPS tracking of collection vehicles, processing mill production data, quality testing records, and the existing traceability documentation. We identified that the company had invested in IoT sensors across its mills but the data was being collected without systematic analysis.
Our AI Pilot Program deployed three integrated AI systems. First, an optimized collection routing engine that scheduled smallholder pickups based on predicted harvest readiness (using satellite imagery and historical yield patterns), minimized transit time to processing mills, and reduced FFB degradation. Second, a mill optimization AI that continuously adjusted processing parameters based on incoming FFB quality, weather conditions, and equipment condition to maximize oil extraction rates. Third, a blockchain-integrated traceability system that used mobile-based verification at each handover point, creating an immutable chain of custody from individual smallholder plots to exported product.
The AI Transformation Program scaled these systems across all operations and established an AI Governance framework for supply chain data integrity. Team Training at collection centers taught field staff to use mobile verification tools. Executive Training prepared leadership to leverage traceability data as a premium pricing tool with sustainability-focused buyers.
"Sustainability is not just good ethics — it is good business. Pertama Partners helped us build a supply chain where every kilogram of palm oil can be traced to the exact plot it came from, and our European buyers are willing to pay a premium for that transparency."— Datuk Ahmad Razali, Group CEO
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