Investment in downstream palm oil industry not satisfactory

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Phoong speaking at the State Assembly on Wednesday.

KOTA KINABALU (Nov 29): The amount of investment put into Sabah’s downstream palm oil industry last year is less than satisfactory, said Industrial Development and Entrepreneurship Minister Datuk Phoong Jin Zhe.

Although Phoong did not specify the amount, he told the State Assembly during the question and answer session on Wednesday that it is very limited despite the government’s efforts over the years to attract more investors into the industry.

The Luyang assemblyman said unless the government comes up with a policy to control the feedstock, it will be difficult to develop the downstream industry here as a lot of major farms had informed they are not able to promise the necessary feedstock for the effort.

Nevertheless, he said the State Government has been implementing various initiatives to attract more investors to the state’s downstream palm oil industry such as through the establishment of the Sabah Biomass Policy, which is vital to the state as it can help improve the effectiveness of raw biomass supply management and regulate the downstream industry of palm oil biomass.

“The policy will certainly be able to contribute to the development of the biomass-based downstream industry sector in addition to being able to help in the environmental management effectively and efficiently. With this policy, it will be able to ensure a consistent supply of raw biomass to meet the demands of investors,” he told nominated assemblyman Datuk Suhaimi Nasir.

He also pointed out the establishment of Palm Oil Industry Cluster (POIC) Lahad Datu in 2005 was aimed at adding value to the yield of oil palm plantations with an area over 1.5 million hectares by focusing on the processing of downstream products, and the POIC also developed additional industrial groups other than palm oil-based industries in response to the interests of investors and the increasing prospects in various sectors.

Phoong added a new initiative is being planned for implementation in POIC Lahad Datu, which is the creation of a free zone area spanning 3,000 acres.

Through this free zone area, he said investors will be able to take advantage of tax-free incentives on the sources of raw materials imported to POIC as well as products produced for export, becoming another attraction for investors to make the POIC their preferred investment destination.

“The State Government also ensures that basic and supporting infrastructure facilities are constantly improved, especially in industrial parks, to increase investors’ confidence on water and electricity supply, road network systems, internet and telecommunications, port facilities and storage warehouses.

“In addition, my ministry is also actively promoting investment opportunities through close cooperation with related agencies such as Malaysian Investment Development Authority (MIDA), Invest Sabah and Malaysia External Trade Development Corporation (Matrade) by continuing proactive efforts to find potential investors through trade missions abroad and within the country to attract investors to come and invest in Sabah, especially in POIC Lahad Datu,” he said.