KUALA LUMPUR: Biomass supply issue must be addressed first to enable small and medium enterprises (SMEs) from the biomass industry to grow, Malaysia Biomass Industries Confederation president Datuk Leong Kin Mun said.
He said theoretically Malaysia has an abundance supply of biomass, especially from oil palm, accounting for about 80 million tonne of dry basis per year, but in reality it was difficult to source for feedstock.
“About 80 per cent of the industry players are SMEs while biomass supply comes largely from big plantations that are already equipped with good recycle systems to comply with good sustainable practice,” he told Bernama in an interview recently.
In order to get sufficient supplies, the SMEs must formulate a good purchasing strategies, he said.
“Do not use an outright purchase strategy, instead go into joint venture with big players and plantations as it is more practical,” he said.
He said the problem was also aggravated by transportation woes as biomass were located in plantation areas, thus pushing up transportation costs and deteriorating the quality of supplies.
Leong said more aggregation centres like that of Mybiomass Sdn Bhd should be set up as they would act as supply focal points by coordinating collection of feedstock and pre-treat it to improve quality paving the way to consistent and sustainable supplies.
On intended biomass industry players, he advised them to study the business model on the kind of products to be produced and quantity of feedstock needed against its returns.
“The industry will not grow if SMEs just focus on a mass business model like producing pallets, prompted by easy entry but.
They should look into high value products like bio-engineering products that requires less feedstock but give higher returns,” he said.
However, he said SMEs may lack the capabilities to move immediately into higher valued products due to constraints in capital and technology expertise, hence most of them tap into something doable before progressing.
As the industry is still too dependent on foreign technology as local technology is still at the laboratory stage, project developers are bogged down by lack of confident, he said. — Bernama