Economic Transformation Programme: Palm oil to boost GNI by RM125b

KUALA LUMPUR: The palm oil industry, the fourth largest contributor to the national economy, is expected to generate an additional RM125 billion to gross national income (GNI) in the next decade to reach RM178 billion by 2020.

The industry currently accounts for RM53 billion in GNI. The government, via its entry point projects (EPP), intends to expand both the upstream and downstream segments to achieve this target as well as create an additional 41,000 jobs in the industry.

A cumulative funding of RM124 billion over the next 10 years, with 98% of the funding coming from the private sector, is required to carry out the initiatives in the industry. The total public funding for capital expenditure is expected to be RM2.9 billion with an additional RM2.7 billion in the form of tax incentives, soft loans and cash incentives to promote private sector development in the downstream sector.

Some of the EPPs will focus on improving upstream productivity and transforming Malaysia’s oil palm plantations by accelerating the replanting of aging oil palms.

It is learnt that some 365,000ha of palm oil land is currently above 25 years of age. An addition of 125,000ha will join the band every year if replanting is not carried out.

Additionally, mechanising plantations, stringent enforcement of best practices to enhance fresh fruit bunch (FFB) yield, implementing strict quality control parameters to enhance oil extraction rate and developing biogas facilities at palm mills to capture the methane gas released during the milling process are also part of the initiatives to be carried out.

The industry is aiming to achieve FFB yield of 26 tonnes per year and oil extraction rate of 23% by year 2020 from the current 21 tonnes and 20.5%.

The government also targets to capture the lucrative downstream segment where Malaysia has little presence today by focusing on developing finished segments that generate high value, including oleo derivatives and selected food and health based segments.

Nonetheless, the palm oil industry continues to face challenges from environmental non-governmental organisations and a shortage of labour.

The industry is expected to require a workforce of 703,400, creating about 123,400 new jobs in the next 10 years. In a presentation at the Economic Transformation Programme (ETP) Open Day yesterday, it was also revealed that there was a target to reduce 110,000 foreign labour.

According to a statement on ETP, there are also three key sector-wide enablers that must be set up including increasing the number of university courses and graduates in chemical engineering, bio engineering and related courses to meet the demand for the nearly 80,000 skilled personnel in the palm oil industry.

Another milestone that the palm oil industry aims to achieve is to commercialise second-generation bio fuels from the resulting bio mass that is generated in the industry.

It is learnt that the implementation of the 5% mandatory biodiesel blend would be expanded to several areas in Malaysia by mid next year. It is currently only implemented in several government agencies.

This article appeared in The Edge Financial Daily, September 22, 2010.

New oil palm clone set to double palm oil yield up to 10 tonnes per ha

KOTA KINABALU: A new oil palm clone dubbed Wakuba oil palm ramet brand was launched with a promise of doubling the current oil yield.

Named after TSH Resources Bhd unit TSH Biotech Sdn Bhd’s five-year-old tissue-culture laboratory in Wakuba Gading, Tawau, Sabah, the new clone promises an oil yield of up to 10 tonnes per ha compared with the average current yield of about 4.5 tonnes per ha in the country.

TSH Resources chairman Datuk Kelvin Tan said the company had invested RM25mil in the laboratory, which is expected to produce 1.5 million ramets by 2015 compared with 500,000 this year.

Plantation Industries and Commodities Minister Tan Sri Bernard Dompok launched the product in conjunction with the 2010 National Seminar on Palm Oil Milling, Refining, Environment and Quality here yesterday.

Dompok also witnessed the signing of a memorandum of agreement (MOA) between the Malaysian Palm Oil Board (MPOB) and TSH Resources.

MPOB was represented by its director-general Datuk Dr Mohd BasriWahid and TSH Resources by Tan.

The new MOA extends the technical collaboration on genetic marking to further improve efficiency and quality of ramets produced at the laboratory.

Tan said the project was initiated in 2005 between TSH Biotech’s laboratory and MPOB with technology transfer from MPOB to clone elite palm trees as part of of public and private sector initiative.

“We know that there is less land available in Sabah for oil palm so, we have to increase yield through technology,” Tan said.

Based on MPOB statistics, 1.1 million ha of the 1.4 million ha planted with oil palm in Sabah are now mature, indicating potential for high-yield Wakuba clones to replace ageing palms.

This collaboration will allow superior oil palm materials to be available especially to smallholders and plantations in Sabah.

At the current crude palm oil price, a smallholder with 6ha can potentially earn an incremental income of RM30,000 a year using cloned shoots, Tan added.

Meanwhile, Basri described the synergy between the two parties and success of Wakuba ramets as a landmark achievement for the clonal industry.

Commercialisation was an important element in research and development as this was where the concept of bench-to-market came into fruition, Basri said.

Dompok said the collaboration between MPOB and TSH Resources in setting up tissue culture lab was a success in the development and production of palm clones.

The achievement in oil palm breeding and biotechnology in producing high quality material would boost industry productivity and quality of palm oil products, he added.

Dompok also launched the TKJ organic fertiliser that is formulated using refinery waste which has potential to enhance soil fertility, promotes plant growth and improve yield and crop quality.

The high grade fertiliser was produced in a collaboration between MPOB and MPV Technologies.