Kota Kinabalu: A memorandum of understanding (MOU) by three parties pave the way for the first oil palm biomass collection centre to be set up in the State. In a MOU signed on Tuesday, POIC Trading Sdn Bhd, BELL Corporation Sdn Bhd and My Clean Energy Sdn Bhd, agree to move towards setting up a satellite biomass collection centre.
Datuk Dr Pang Teck Wai, the CEO of state-owned POIC Sabah Sdn Bhd, said the collection centre will for the first time clear hurdles on oil palm biomass price and supply security, the two major factors hindering the take-off of the billion-ringgit biomass downstream industry in Sabah.
Bell Corporation, which on Monday signed a collaboration agreement on renewable energy with Universiti Tenaga National, will provide a site near its oil palm mill, about 50km from Lahad Datu, for the gathering of biomass from other mills in the area.
MCE, a local company with a track record in biomass aggregation will be responsible for long-term supply, whilst POIC acts as the confidence provider in the arrangement as the buyer of the biomass.
Pang signed on behalf of POIC Trading while Puan Sri Dr Liana Low signed for Bell Corporation and Jeffrey Lu signed on behalf of My Clean Energy.
The signing was witnessed by Deputy Chief Minister cum Minister of Industrial Development Datuk Seri Raymond Tan Shu Kiah.
"The event held today was the result of big efforts that had been made over the years to create a biomass satellite collection centre.
"How we aggregate that oil palm biomass has always been the challenge but what we have today is POIC being able to step forward with their partners to say that lets do something on this and this is what is happening today," he said.
Pang said uncertain pricing and supply uncertainty have combined to prevent the take-off of a biomass industry which national planners predicted to be worth in the billions and a provider of tens of thousands of jobs.
He cited the example of a Korean company who withdrew from a renewable energy project from the Lahad Datu palm oil industrial cluster (POIC Lahad Datu) because it could not secure long-term supply of biomass.
Sabah has more than 1.5 million hectares of oil palm and is currently ranked the top oil palm producing state in Malaysia.
Biomass comes from the oil palm fields as well as oil palm mills. From the fields are fronds and trunks; while the mills produce wastes in the form of empty fruit bunches, palm kernel shells, palm kernel cakes, mesocarp fibres and palm oil mill effluent (POME).
All biomass have commercial and industrial uses in pellets, compost, briquettes, energy, biochemical, graphene, etc.
One of the agenda of POIC has been to attract investors to commercialise technologies using biomass at POIC Lahad Datu.
Not much has materialised because of problems with biomass aggregation, price and supply uncertainties, until the MOU. Describing it as á long journey', Pang said POIC is now able to assure its investors of biomass supply and price security.
When asked when will the satellite biomass collection centre site be ready, Pang said they were still currently in talks with other investors so maybe by the end of the year.
He also revealed that POIC is on the cusp of repositioning the company from one focused on palm oil downstream industries to offering itself as a regional logistical hub.
With the completion of its RM500 million container terminal early 2018, POIC will boast of being the only integrated port facility in Sabah with a container terminal and terminals for bulk cargo, oil and jetty landing.
These facilities will be 'front-and-centre' of POIC's marketing push. - Neil Chan
