A major milestone will be reached in the continuing advancement of the country's palm oil industry as six major oil palm players sign up in a first-of-its-kind joint-venture biomass cluster in Lahad Datu, Sabah.
The signing, to be held on June 10, will have big names like the Bell Group, which is involved in the trading of crude palm oil, palm kernel oil and palm kernel cake, Genting Bhd as well as plantation-based Teck Guan Group.
Datuk Dr Pang Teck Wai, the Chief Executive Officer of POIC Sabah Sdn Bhd, said the signing was a major breakthrough in bringing together owners and consumers of oil palm biomass, a sector in which the Malaysia Palm Oil Board (MPOB) estimates to be worth RM80 billion.
The government and private sector have for the few years stuck in an impasse due to:
- No price Mechanism
- No precedence to follow
- Lack mutual trust between suppliers and potential buyers.
There was a lot of dialogues and, visits and briefing between agencies like AIM (Agensi Inovasi Malaysia) and POIC Sabah who have acted as bridges between the biomass users and owners. This new signing will see perhaps an added efficiency to this process.
The main challenges to biomass manufacturing as said by Pang are:
- Availability of oil palm mills who are willing to commit long-term supply
- Potential buyers quoting widely different prices based on uses
In brief, Pang said that the AIM-initiated JV Cluster brings together who are prepared to break through impasse and high commitment of being a share holder is the formula for an added value biomass downstream of the industry to take off in Sabah.
He also said that these entrepreneurial leadership shown by these industrial leaders is exemplary and will be inviting to their colleagues to join in to take part in the vision to build the industry.
On the extraction of high-value derivatives from palm oil and equally high-value sugars in oil palm biomass, Pang said Sabah was in the lead with the setting up of Malaysia's first pilot lignocellulosic refinery by the Teck Guan Group in Tawau in collaboration with Japanese multinational Mitsui.
The extraction of high-value oleo derivatives is multi-billion industry worldwide and Malaysia is moving in this direction under the Economic Transformation Programme (ETP).
The Tawau venture will be the subject for one of the seven papers to be presented during the conference on June 12 and organisers of the 4th Malaysia International Palm Oil Technology Expo (4th Palmex) from June 11-13 are arranging for a delegates visit to the plant.
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