Malaysia's Federal Ministry of Plantation Industries and Commodities has officially opened a 'Palm Oil Industrial Cluster' (POIC) in the state of Sabah, East Malaysia. POIC Sabah Sdn Bhd will be a government-linked company (GLC) wholly owned by the State Government of Sabah, and its purpose will be the promotion of local and foreign investment from biodiesel manufacturing concerns and other 'down-stream' industries.

 

Under the 9^th Malaysia Plan, it is the Federal government’s responsibility to promote industrial clustering throughout the country.  In addition to the creation of POIC Sabah Sdn Bhd, the government has ordered Sawit Kinabalu Bhd, which is also wholly-owned by the State Government, to start a second cluster in Sandakan,  to be called  the Sandakan POIC Sdn Bhd.

Site preparation works for the Sabah POIC has begun in Lahad Datu and will be completed ahead of schedule. The government is encouraging investors to approach the POIC with expressions of interest in building down-stream facilities on industrial land made available under the scheme. The Ministry expects the first buildings to be completed in 2007. 

Additionally, the Federal Ministry of Plantation Industries and Commodities has set up the Malaysian Palm Oil Board’s research and training centre in Lahad Datu. This centre, called Pusat Latihan Sawit Malaysia, or PLASMA in short, is the first of its kind in Malaysia. With a capacity for 300 trainees at any one time, PLASMA is intended to produce the skilled workers required by the Cluster.

Sabah is the biggest palm oil producer among Malaysian states. Moreover, Sabah’s geographical location makes it an ideal location from which to access palm oil from Indonesian Kalimantan, and lauric oil (or coconut oil) from the Southern Philippines as feedstock for the Cluster.

The Federal government hopes the availability of plentiful raw materials from indiginous sources and neighbouring countries will ensure Malaysia’s position as the current top palm oil producer in the world and enhances its position as a the premier destination for vegetable oil-based investments.  

Although Sabah produces almost 30 per cent of the 15 million metric tonnes of palm oil produced in Malaysia, downstream activities are currently confined to milling and refining. Further 'value-adding' such as oleochemical and biodiesel do not exist as yet, and this industrial cluster is intended to remedy that situation.

See the full speech here: http://www.sabah.gov.my/press/docs/2006000746.htm

Editorial comment: On 1st July Malaysia suspended new applications from foreign companies hoping to set up commercial biodiesel factories in the country (see article Malaysia calls 'temporary' halt to biodiesel licences: http://www.biofuelreview.com/content/view/196/). 

So, although biodiesel is mentioned as one of the down-stream industries intended to be encouraged by the Sabah and Sandakan POICs, presumably applications from non-biodiesel manufacturers will be given priority?. It is not clear to this writer what the policy is at present, but if anyone knows, please tell us and we can pass the information on to our readers, with credits of course.

David Smith, Singapore