30 September 2005

Palm oil still one of Malaysia’s success stories

The palm oil industry is one of the Malaysia’s greatest success stories and will remain so as long as it keeps pace with the latest technological advancements in oils and fats.

This was the consensus from participants of the just-ended 2005 International Palm Oil Congress or better known as PIPOC where about 1,700 people, including researchers and scientists, from 43 countries attended.

And the next big thing for Malaysian palm oil is bio-diesel, which is an extension of the country’s research and development (R&D) efforts in getting more value-added from its agro-resources. Researchers, analysts and market experts have given their “thumbs up” on the viability and sustainability of palm oil as the primary raw material for bio-diesel.

The palm oil industry is now more aware of the potential of bio-diesel and PIPOC has helped industry players to know the European bio-fuel experience better as well as plan ahead for the local bio-fuel industry to synergise with the global bio-fuel market, said Tan Sri Yusof Basiron, director-general of the Malaysian Palm Oil Board (MPOB).

“These (issues on the potential of palm oil as bio-diesel) are the ideas that we would like to absorb into the industry and give more value, money and profit to the agriculture sector and continue to spearhead the sector in Malaysia,” he said.

In taking the theme of the congress, “Technological Breakthroughs and Commercialization – The Way Forward”, on a more solid platform, he said MPOB would invest RM60 million on a a 50:50 joint venture in three palm oil based bio-diesel planted in Malaysia – two in Port Klang and one in Pasir Gudang, Johor.

The three plants will produce 180,000 tonnes of bio-diesel per annum- a modest beginning as this is less than two percent of the total palm oil production of 14 million tonnes in Malaysia.

With the higher crude petroleum prices at present and the readily available market for bio-diesel, more investors are likely to put their money in palm-based bio-diesel, said Dr Yusof.

“We are leading the way and we expect more local investors to jump on to the bandwagon. From MPOB’s side, we are ready to provide them with the technology on a turnkey basis,” he said.

Besides bio-diesel, the 2005 PIPOC also deliberated on downstream products, mainly oleochemicals and the commercial value of palm based bio-mass. The potential for oleochemicals is also robust, for two reasons: the first is the higher crude petroleum prices that make petrochemicals comparatively more expensive and the rapid development in sectors like soaps, detergents, shampoos and cosmetics that use oleochemicals.

The congress was told that the detergent market offers huge potential for the industry, especially in countries that have large populations, such as India, China and West Asia. Intensive research on palm oil has also produced improved raw materials for detergents known as Subordinated Methyl Esters (MES), which are cheaper but have better quality than those made from petrochemicals also attracted much interest during the four-day meeting.

Especially in China, the rapid development of its economy has seen more people aspiring for a better quality of life and paying more attention to cleanliness, safety and health. That alone will see a big push from China’s detergent and soap markets as it lacks raw materials for their manufacture.

The total output of washing products in China has been rising at 10 percent per annum in the past five years but much higher growth are expected in the next five years, says the China Research Institute of Daily Chemical Industry in Shanxi.

But Prof Dr Rudy Rabbinge, Dean of Wageninge Graduate School in the Netherlands, put the theme of the congress in better perspective when he said that R&D efforts alone were not enough as they should have commercial value or demand from end users. Since R&D involved a lot of funds, the outcome should be viable and worth the amount of investment made as “we don’t want a technology boom alone but viable technologies,” he said.

Meanwhile, Dr Yusof said as far as MPOB is concerned, 305 various types of technology have been found via R&D to bring the palm oil industry to greater frontiers. Out of this, 30 percent has been commercialised so far. The Malaysian palm oil industry, including MPOB, invests about RM350 million on R&D annually.

Dr Yusof said in going forward, exports of crude palm oil should not be the only yardstick for the local palm oil industry but it should have more downstream products as well.

Source: Daily Express.com Sept. 29, 2005

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