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Dompok (left) being presented the ‘Spirit of Borneo’ book as a souvenir by Dr Pang. Looking on is Dato Basri Ahmad, Director-General of MPOB
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29th July, 2010
LAHAD DATU: Already the country’s biggest fertilizer cluster, the Lahad Datu palm oil industrial cluster (POIC Lahad Datu) project looks set to also become home to the biggest grouping of palm oil refineries.
Eight fertilizer companies have bought land in POIC Lahad Datu and are in different stages of implementing their projects that combine to produce more than one million tonnes of fertilizers a year.
Six palm oil refiners have been granted licences to set up operations at POIC Lahad Datu with three more expected to receive their approval from the relevant authorities in the coming weeks. Together these refineries are expected to process more than two million tonnes of crude palm oil (CPO), about 40% of Sabah’s current total annual output.
“The palm oil refineries will spawn many other downstream processing industries and we expect to attract many more investors because POIC Lahad Datu’s infrastructure is designed for up to five million tonnes of oils and liquid cargo per year,” said Dr Pang Teck Wai, chief executive officer of POIC Sabah Sdn Bhd, the state-owned company developing POIC Lahad Datu. “Our strategy is to leverage our superior infrastructure to attract the inflow of CPO from neighbouring Kalimantan as well as lauric (coconut) oil from southern Philippines.”
He was speaking after a briefing and dialogue with the Minister of Plantation Industries and Commodities, Tan Sri Berhard Dompok and officials of the Malaysia Palm Oil Board (MPOB) here Tuesday.
He expressed gratitude to Tan Sri Bernard who pledged his ministry’s support to promote POIC Lahad Datu and ensure its success. The oil palm sector is one of the 12 National Key Economic Areas (NKEAs) in the New Economic Model unveiled by Prime Minister Datuk Seri Najib Tun Razak last March.
“We are also grateful that the Minister also concurred with our request for about RM868 million funding for infrastructure development at POIC Lahad Datu in the first two years of the 10th Malaysia Plan.
“The funds are for the construction of a container port and bulking installations. These two projects, combined with our existing deep-water oil jetty and dry bulk jetty (mainly for the fertilizer cluster), will give us a clear edge over any competitor in the region and will put us in a strong position to attract major investors,” said Dr Pang.
POIC Lahad Datu started in 2005. Its initial two phases cover 1,150 acres and are mainly for palm oil-based industries, fertilizer factories, power generation, logistics operation and a SME-cum-commercial centre. It is currently developing about 625 of the 3,300-acre third phase mainly for biomass-based industries. Twenty-seven companies are in different stages of operations in POIC Lahad Datu. These investors combine for an investment value of about RM1.9 billion.
Tan Sri Bernard asked for POIC Sabah’s input in making proposals to the Federal cabinet on issues such as requirement for investment incentives unique to Lahad Datu’s situation.
He also lauded POIC Sabah’s initiative in conceptualising and proposing a biomass collection operation aimed at establishing a pricing and supply mechanism to help launch biomass industries which are estimated to have a potential worth of RM20 billion.
On mechanisation of oil palm plantations, Tan Sri Bernard said MPOB is collaborating with companies in China and will recommend locating the machinery assembly plant in POIC Lahad Datu.
Meanwhile, Dr Pang said the management of POIC Sabah is confident that economic spin-offs from the development of POIC Lahad Datu will become more tangible as the number of operating factories reaches a critical mass. The idea is to first get the big and key sectors to start, which will then draw in a cluster of support and related smaller business entities.
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