Published on: Saturday, October 05, 2013
Lahad Datu: The Palm Oil Industrial Cluster (POIC) Lahad Datu has received encouraging response from local and international investors since its inception, and total investment to date has reached a whopping RM4.5 billion.
The positive response was chiefly due to its strategic location, the availability of raw materials, natural deep harbour and the comprehensive infrastructure within the POIC, which was established in 2005.
A total of 45 companies have invested in Phase 1 and 2 spanning 464.6 hectares and these players are involved mainly in biodiesel, palm oil refinery, logistics and warehousing, property development, manufacturing of fertilisers and its supporting services.
Out of these, 35 are local companies with 10 of them being public listed companies and the remaining nine are foreign-owned companies from Australia, Hong Kong, Korea, Singapore, the Netherlands and Pakistan.
The third phase covering some 1,212 hectares is being developed in stages.
A RM500 million container terminal is on the drawing board to cater to the needs of investors in biomass manufacturing and oleochemical plants while national oil company, Petronas, is developing a re-gasification facility and national utility company, Tenaga Nasional Bhd, is building a 300 megawatt gas powered generation plant.
POIC Sabah Sdn Bhd Chief Executive Officer, Datuk Dr Pang Teck Wai, said the policy and financial support POIC Lahad Datu had received from the State and Federal governments since its inception illustrated the importance of value-adding in the oil palm industry in Malaysia, where Sabah is the biggest producing State.
"Infrastructure is the key to exploiting the geographical advantages of Lahad Datu and the access to raw materials such as crude palm oil and oil palm biomass, which is much sought after around the world for the production of bioethanol and high-value oleo derivative products," he said.
He said to enhance the investment environment and keep up with the expected growth, POIC Sabah had received funding for the construction of a container terminal to add to the existing oil terminal and dry bulk terminal, making it a well and truly integrated port in Sabah.
Pang sees a jump in small and medium enterprises (SMEs) and foreign investments in biomass manufacturing in the coming years particularly in pelletisation and bioethanol production.
He pointed out that under the Economic Transformation Programme, Sabah was designated as the national hub for the development of second generation biofuel and production of high-value oleo derivatives.
Second-generation biofuel is produced from non-food feedstock such as oil palm biomass, and Sabah's 1.4 million hectares of oil palm plantation generates up to 26 million tonnes of plantation and mill wastes that are ready raw materials for value-adding.
Working with Malaysian Innovation Agency (AIM), a unit under the Prime Minister's Department, POIC Sabah launched in mid-2013 the Biomass Joint Venture Cluster concept in which oil palm mill owners come together to aggregate sufficiently large volumes of biomass to attract foreign investors.
"We expect groundbreaking investments worth hundreds of millions in the biomass sector in Sabah in the very near future," Pang enthused.
Investors in POIC Lahad Datu can apply for full tax exemption on statutory income for 10 years or Investment Tax Allowance of 100 per cent on qualifying capital expenditure for five years, which can be offset against 100 per cent of statutory income, subject to qualifying activities/products under the Investment Promotion Act 1986.