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Biomass earmarked as next major sector to be developed in POIC

By Kristy Inus

KOTA KINABALU, July 29 — Biomass, a green energy sector with an estimated value of RM30 billion in Sabah, has been earmarked as the next major industry to be developed in the Palm Oil Industrial Cluster (POIC) in Lahad Datu.

POIC Sabah Sdn Bhd's chief executive officer Dr Pang Teck Wai said a Japanese company had already set up operations in the cluster to pursue biomass activities and the state government was continuously promoting the infrastructure there to attract investors.

POIC Sabah was set up by the state government to spearhead palm oil downstream processing and the company is placed under the supervision of the State Industrial Development Ministry.

"This is what we called the infant stage, so now the state government is trying to move towards opening this frontier for investment opportunities," Pang told reporters after the opening of Malaysia's largest palm oil technology expo, Palmex 2010, here Thursday.

"We have created the best infrastructure. So the last piece of the jigsaw puzzle we are trying to put together is access to raw materials, which over the next few months we will probably hear more of the state government's initiatives," he said.

All along, the palm oil industry has not been able to get biomass activities started because of the difficulty in accessing raw materials such as empty fruit bunches, oil palm fronds and oil palm trunks, Pang said.

"So the state government is now in the process of seeing how we can facilitate investors' access to biomass raw materials. Not only access but also at a price low enough and competitive enough," he said.

Sabah, which produces about one third or 5.4 million tonnes of the total country's crude palm oil of 17.5 million tonnes annually, has a lot of raw materials readily available to be used for the biomass industry, according to Pang.

"In the palm oil industry, some said that the major part of the wealth in the oil palm tree is not in the oil but in the biomass," he said.

"Sabah's palm oil industry produces around 27 million tonnes of raw materials (that can be used for biomass), and six million tonnes are empty fruit bunches, about 19 million tonnes are fronds, and the remaining two million tonnes oil palm trunks," he added.

Besides biomass, biogas is also another huge potential to be explored in POIC in future, said State Industrial Development Minister Datuk Raymond Tan Shu Kiah.

Asked if the state government was coming up with incentives and schemes for investment in biomass, Tan said: "There will be programmes, this is a state initiative and we have explored the possibilities in a number of ways."

Earlier in his speech, Tan said he was informed that oil palm mills were not excited about power generation because of the many competing uses of oil palm biomass and the not-very-attractive rates offered by Tenaga Nasional Bhd.

The issue of biomass supply security and pricing also needed to be ironed out, he said.

On another development, Tan said POIC Lahad Datu had attained an excellent level of success, having so far attracted 27 investors with total investment valued at RM2 billion. (PNA/BERNAMA)

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