State-owned POIC Sabah Sdn Bhd is set to play a key role in the oil palm biomass industry with long-term supply of large quantities of the agricultural waste.
The company believes that the state’s biomass industry can take off as it has been able to obtain empty fruit bunches (EFB) for various downstream biomass activities.
“We have managed to secure a long-term annual supply of 300,000 tonnes of wet EFB and we expect this to be taken up by investors very soon,” said Datuk Dr Pang Teck Wai, chief executive officer of the company developing the Lahad Datu palm oil industrial cluster (POIC Lahad Datu).
He said POIC Sabah had “gone out on a limb” to secure the supply to bring about “some semblance of framework and price mechanism”.
“We felt that there has been enough talk about the problems and decided that we needed to take the lead in order for the biomass industry to have a shot at success,” he said.
He added that Sabah, being the largest oil palm producing state in the country, should rightfully take the lead.
Declining to disclose prices and details of its procurement mechanism, Dr Pang said that POIC Sabah’s main aim in being an EFB procurer was to inject confidence among investors.
“The investors are out there waiting to get their hands on EFB but they have not been able to do so because of the unregulated environment.
“What we have done is fulfil our role as a promoter of oil palm-related downstream processing industries – not only at POIC Lahad Datu but the rest of the state.
“This is so that our resources can be maximised for our economy’s expansion,” he added.
Oil palm trees produce five types of biomass useful for numerous downstream uses, including mesocarp fibre, palm kernel shells, EFBs, oil palm trunks and fronds.
Oil palm contributes to over 40% of Sabah’s gross domestic product .
It is set to grow in significance with mechanisation, higher yield and better oil extraction rate.
“With our ready EFB supply, we would like to tell investors to come talk with us and let us be partners to launch the biomass industry,” said Dr Pang.
Meanwhile, work on a combined heat and power plant owed by a Korean company at POIC Lahad Datu is on schedule, with the 23MW plant to be operational by 2012.
Owned by Eco Biomass Energy Sdn Bhd, the company aims to use oil palm waste such as EFB to generate steam and electricity.
The company purchased land at POIC Lahad in 2007 but had not been able to begin construction until recently due to difficulties in securing long-term supply of feedstock.