Palm Oil Sector A Potent Growth Engine

By Jailani Hassan LAHAD DATU (Sabah, Malaysia), Oct 8 (Bernama) -- The palm oil industry, which has proven to be a potent growth engine for the country, still attracts criticisms from some environmental non-governmental organisations. Among them, the most troubling is that it contributes to climate change although it has not been proven. Nevertheless, the industry has helped boost the economies of Malaysia and neighbour Indonesia. For some developing countries, palm oil production and processing have become a growth industry and valued sources of export earnings. For others, they provide a source of affordable food imports. In both roles, the industry advances global economic growth. A recent Bernama visit to the Palm Oil Industrial Cluster (POIC) here showed that a number of international and local companies had started operation, covering various downstream activities and the promising biodiesel sector. POIC Chief Executive Officer, Dr Pang Teck Wai, said the cluster aimed to expand downstream activities. "We intend to spread the word that there are potentials not just in palm oil but all the oil palm wastes," he said. He said Malaysia's oil palm industry produced about 80 million tonnes of biomass and the volume was expected to increase to 100 million tonnes by 2020. Sabah’s oil palm acreage was estimated to contribute about 30 per cent of this volume, he said. Pang said according to studies by Malaysian Innovation Agency (Agensi Inovasi Malaysia or AIM), a unit under the Prime Minister’s Department, biomass could potentially generate an incremental US$9.38 billion (RM30 billion) in gross national income by value-adding on just 20 million tonnes of the biomass produced in the country. He said there was a need for strong promotion to encourage investments in related industries. "The need for upgrading the capabilities of existing support industries must also focused on developing more small and medium enterprises that can provide support and ancillary services to the upstream as well as downstream activities. "POIC’s role is to provide infrastructure, necessary facilities and assistance to see the positive development of this sector. It was established in 2005. The initial 465.39 hectares in the first phase of the 2,023.42-ha cluster has received overwhelming responses," he said. Pang said POIC, located about 2km from here, aimed to boost growth and use of sustainable oil palm products by following credible global standards and engagement with stakeholders. The initial phase focuses on major palm oil industries such as refineries, biofuel plants, oleochemicals, biomass, fertiliser plants and critical support industries such as a central steam provider, bulking installations and dedicated jetties. "In the next phase, covering approximately 2,023.42ha, POIC Lahad Datu will diversify into a broader-based cluster encompassing energy intensive sectors, cocoa, ship repairs and construction, food, marine, furniture and machinery sectors," he said. Pang said a 404.69ha halal hub was also targeted to capture the sizeable global halal market. "POIC Lahad Datu provides an attractive setting for investment opportunities such as strategic location," he said. The downstream activities in POIC currently are processing and packaging of fertilisers, palm oil refineries and manufacturing of glycerine and cooking oil, recycling of oil palm waste from refineries i.e. spent bleaching earth, oleochemical plant (for soaps, pharmaceutical products, etc), manufacturing of oil palm biomass pellets (for bio-fuels). "We hope to be able to echo Malaysian government's call to attain the status of a newly-industrialised country and complement the Sabah government's efforts in making the state a fully-industrialised economy with palm oil as the oasis of development," he said. -- BERNAMA