Visit to Sawit Kinabalu Group: Environmental Transformation of Borneo's Palm Oil Industry
Sawit Kinabalu is one of the leading palm oil producers in Sabah. The company actively promotes principles of environmentally responsible land use, transparency, and social partnership. It is certified under the MSPO (Malaysian Sustainable Palm Oil) standard and collaborates with both local and international organizations to achieve climate and ESG goals.
The company owns 36 plantations covering a total area of 67,000 hectares and exports up to 90% of its products to key international markets — including Europe, the Middle East, China, India, and Turkey. In addition to processing its own raw materials, SKG sources palm fruit from more than 30 smallholder farms in the region.
According to Nazlan, the Director of Sustainability, the potential for expanding cultivated land has been exhausted, and the only path forward lies in increasing yields on already developed land — particularly among smallholders, who face challenges such as limited access to fertilizers, skilled labor, and agricultural technologies. Moreover, some farms are located near protected areas, creating environmental risks.
One solution is intercropping — the practice of planting other agricultural crops between oil palm trees. This helps farmers diversify their income while simultaneously supporting biodiversity conservation.
“The future of the industry does not lie in expanding plantations, but in improving productivity and promoting sustainable development. Smallholders are the key, and our task is to ensure they have access to quality resources, training, and alternative sources of income,” Nazlan emphasized.
The state of Sabah accounts for 24% of Malaysia’s palm oil production, and together with Sarawak, contributes nearly 60% of the national volume — making Borneo the hub of Malaysia’s palm oil industry.
“Palm oil development is no longer about expanding land area. The future lies in boosting yields — especially by supporting smallholders through better access to quality inputs, training, and fair market conditions,” he added.
The company also introduced journalists to the Sungai Pin Conservation Area (SPnCA) — a protected natural site that was once a swampy section of an old palm oil plantation. SKG made a strategic decision not to replant palms there, instead preserving the land in its natural state, expanding the riparian buffer zone, and protecting the surrounding forest.
“We began conservation work long before it was required by certification standards. In 2000, after discovering nests of wild animals on this land, we decided the area should be protected. Today, it’s one of the key orangutan breeding grounds,” Nazlan said.
Currently, the SPnCA spans 2,632 hectares, providing habitat for 17 mammal species and 104 bird species, including 17 vulnerable species and 6 Bornean endemics, as well as 521 species of plants and trees. As part of the project, over 7,000 trees have already been planted, forest areas have been restored, and riverbanks stabilized. Bridges have been built to support orangutan migration, wildlife monitoring is ongoing, and ecotourism is being developed. Scientific expeditions and collaborative initiatives have strengthened SPnCA’s position as a model for responsible land use and biodiversity conservation.
