P&G to make more use of palm oil
palm oil in its shampoos and detergents instead of relying mainly
on crude oil, which likely to be subject to volatile price changes
in the future.
The household and personal care multinational, which makes the Head & Shoulders shampoo brand, has used alternatives to crude oil-based surfactants, such as those derived from palm kernel oil and coconut oil, on a minor scale since the 1990s.
But according to an article in the Financial Times, it plans for 10 to 20 percent of its surfactants to be come from alternative sources within the next three to five years - a proportion that signifies a sea change for a company of P&G's size.
Chairman and chief executive AG Lafley said that surfactants are where most of P&G's vulnerability lies. However the company has also said that it is investigating the use of alternatives to petroleum-based fuels to run its manufacturing plants.
By getting in on the game early and offering seed money to producers and refiners of palm oil derived surfactants, P&G hopes to establish long-term relationships, which could help keep prices below market levels.
Palm oil is derived from the fruit of palm trees, native to tropical West Africa and cultivated in Africa, Indonesia, Malaysia, and tropical America. Growing to a height of 15 metres, the palms produce fleshy fruits, 3 cm long, containing a white kernel within a hard black shell. Palm oil is extracted from the pulp and kernel.
While this might seem a more economically-sound source of ingredients than crude oil, last week Friends of the Earth raised concerns over the future of orangutan populations in palm oil growing countries.
It warned that, without urgent intervention, the rapid growth of the palm oil industry in Asia could lead to the extinction of the great ape within the next twelve years.
Friends of the Earth claims its research finds that 84 per cent of UK companies are doing nothing to ensure that their palm oil is sourced from eco-friendly plantations.