Sime Darby Plantation Berhad (“SDP”) is an independent pure play entity following the demerger of the Sime Darby Group and subsequent listing of SDP on the Kuala Lumpur Stock Exchange on 30 November 2017. Today, we are a globally integrated plantation company, involved in the entire span of the palm oil value chain, from upstream to downstream activities, R&D, renewables and agribusiness. We are also involved in rubber and sugarcane plantations as well as cattle rearing.
Figure 1: External stakeholders involved along the palm oil value chain
Arising from the lack of transparency along the supply chain, supply chain management at present faces the following challenges:
- Multiple stages of approvals, invoicing and payments
- Involvement of numerous companies and individuals across various geographical locations
- Exchange of large volumes of information, materials and financial capital
Hence, SDP would like to engage with blockchain solution providers to trial, develop and implement the technology platform with various stakeholders within the palm oil industry and trade ecosystem.
SDP aims to choose a suitable blockchain platform which:
- Improves transparency of information exchange between various stakeholders
- Builds trust between involved parties
- Eliminates inefficiencies along the supply chain
There are two specific areas of initial focus within SDP which includes:
Trade finance – transparency of information exchange and document workflow to:
- Reduce cycle time of Letter of Credit (LC) issuance
- Improve cash flow with digitization of document presentation
Figure 2: General process flow of trade transactions between banks, SDP and our customers
Based on Figure 2, the current process flow entails the following challenges:
- As an exporter, SDP does not have visibility on the real-time communications between importer and issuing bank
- Errors made during LC application submissions cause significant delay in LC issuance and amendments to these errors cause cost and time inefficiencies
- Document presentation to advising banks on the required trade documents is mostly manually executed
- As a result, payment to SDP is significantly delayed
- tokenise and verify FFBs by the batches and trace its movement from estate fields, through to processing at the mill and refinery to the retail customer
- improve confidence in data input and ensure the certifying standards are not only immutable but also accurate
Figure 3: SDP Supply Chain with the involved parties at each stage
Given the need for businesses to prove that practices are aligned with the ethical values of customers, the ability to demonstrate end-to-end traceability has become a key factor in driving the long-term sustainability of the business.
At present, it is difficult to provide indisputable evidence of our sustainable business practices as the current infrastructure still necessitates a large portion of manual record keeping and verification within SDP’s operations. This is particularly so for external plantations and factory plants, of which SDP has little oversight.
SDP is exploring ways to digitally track the batch movement of fresh fruit bunches, palm kernels, crude palm oil, and others especially from third-party suppliers (dealers, traders, external refineries) that enter the supply chain. Knowing the origin of fresh fruit bunches or crude palm oil from third-party suppliers would enable SDP to easily identify products linked with deforestation enters, within the supply chain.
For a company with no deforestation, no planting on peat, no exploitation (NDPE) policies, SDP’s customers and Non-Governmental Organisations expect SDP to ensure its direct suppliers honour these policies too. It is applicable especially to where we source for raw materials. SDP’s roadmap to no deforestation reflects its current approach and commitment. As SDP moves into tracking its direct suppliers and indirect supply chain of which SDP has less control over, it is crucial that SDP monitors their progress towards complying with the NDPE policies.
Figure 4: Roadmap to no deforestation, from 2018 onwards would cover direct and indirect suppliers
Interested blockchain solution providers must provide detailed information and explanation on the following items:Interested blockchain solution providers must fill up the attached SDP/DS/201904/001 BLOCKCHAIN RFI.xlsx document below with detailed supporting facts and/brief write-up (where applicable). These facts will facilitate SDP to better understand your solution. In the event no further information is provided for any of the items above, please indicate clearly with “Nil”.
Instructions To Invitees
o Agriculture or more specifically, palm oilo Trade finance
o Food traceability
|E||Technology Platform||Based on your prior experience, which blockchain platform (Ethereum, Hyperledger Fabric, R3 Corda, Ripple, Quorum, etc.) is most suitable for SDP’s use cases? Please state clearly your reasoning.|
|F||Data Privacy||In the case of a private blockchain, please highlight the platform’s functionalities to guarantee data privacy within the blockchain network, among participants.|
|G||Decentralisation||Based on your experience with consensus mechanisms i.e. Agreement, Termination, Validity, Fault Tolerance and Integrity, please elaborate further on the one that is most suitable for SDP’s use cases.|
|H||Security||How would you ensure the blockchain platform is resilient to malicious cyber attacks?|
|I||Robustness||Please share on how you would provide technical support in ensuring the blockchain platform’s stability whilst managing blockchain forks in the future.|
|J||Scalability||Please elaborate on the blockchain platform’s ability to process high volumes of transactions per second, in
accordance to the focus areas SDP intends to operationalise blockchain technology
|K||Interoperability||What would be the IT architecture when integrating the blockchain solution with SDP’S ERP systems, future IoT systems and different blockchain platforms? The current ERP systems in place include SAP, weighbridge system, FFB ripeness grading system, mobile applications, etc.|
Instructions To Invitees
Submission Of RFI Documents
Submission shall be made in the following format which includes a Cover Letter addressed to:
Mr. Suhaimi Misran
Sime Darby Plantation Berhad Level 11, Main Block, Plantation Tower,
No. 2, Jalan PJU 1A/7, Ara Damansara, 47301 Petaling Jaya,Selangor
Tel: +(603) 78485474
The submission must be made in softcopy via email with the subject title ‘SDP Blockchain Request for Information’ and the following file attachments:
- Signed Company Cover Letter (PDF format)
- Signed SDP/DS/201904/001 BLOCKCHAIN RFI.xlsx (PDF Format)
- SDP/DS/201904/001 BLOCKCHAIN RFI.xlsx (Excel File for analysis purporses)
Invitees must provide the full name, contact number/email and the address of the contact person where any correspondence/communication should be directed to.
Invitees must ensure that their submission is delivered to the email address specified above no later than 5.30 pm on the submission closing date, 11th April 2019 (Kuala Lumpur time).
The submitted information (technical & commercial estimation) will only be used as reference for better understanding of the solution(s) in this market and industry. It will NOT be used to determine our final decision of our tender invitation or tender award at a later date.
Enquiries & Queries On The Submission
All enquiries should be directed to the contact person(s) as stated in the invitation letter (cover letter).
Any queries and clarification must be submitted to SDP no later than three (3) days prior to the closing date and time stipulated above.
Addendum And Supplements To Document
SDP reserves the right to modify or amend any part of the Invitation letter prior to the closing date and time.
Such modifications or amendment will be in the form of Addendum and will be transmitted simultaneously to all invitees who will be given the opportunity to modify or amend their submission as deemed appropriate.
If there are substantial changes to the scope, requirements or specifications of the submission, SDP reserves the right to consider extending the closing date for the submission.