Dow Jones Jan 02 6:13 PM - Mesdaq Market-bound Ecofuture Bhd expects itsoil palm biomass business to contribute 80% to its net profit for thefinancial year ending Dec 31, 2006 from 60% now when production of its newproducts starts.

Currently, milling of oil palm and palm kernel account for 40% of thegroup’s net profit on a 90% revenue contribution, with the rest comingfrom its biomass business in the production of fibres and mats made fromshredded empty fruit bunches.

Its chief executive officer Yeo Kim Luang said under the expansionprogramme of its biomass business, the company expected to officiallylaunch its biomass packaging product "Ecopak" this month. The product,made from palm fibres, is biodegradable and toxic free.

She said Ecofuture would approach schools and fast food chains in Malaysiafor the distribution of Ecopak. She added that half of the production ofEcopak would be for the export markets.

Yeo said the company had invested RM20 million to set up a packaging plantin Johor that started operations a month ago and was operating at 20%capacity. It is capable of producing 200,000 pieces daily.

Ecofuture is also investing RM30 million on a factory that will start toproduce "Ecopulp" by early next year. Yeo said the plant was expected toproduce 20 tonnes of pulp daily from oil palm fibres in 2006.

Of the total pulp production, one-third would be used for the productionof Ecopak, while the rest will be for sale locally and China on an equalproportion.

EcoFuture builds pulp-making plant

The Star Friday January 7, 2005 - ECOFUTURE Bhd, a company heading for alisting on Bursa Malaysia's Mesdaq market next Tuesday, will investRM30mil in a pulp-making plant.

Managing director Yeo Kim Luang said work on the plant, located in FeldaKemelah, would start soon for completion towards the end of the year.

She said the plant would begin production by March 2006 and about half oftotal output would be exported to China and the rest for the domesticmarket.

Yeo said initially, the plant would produce 20 tonnes of pulp from oilpalm empty fruit bunches (EFB) daily, adding that this capacity could beincreased in the future.

"This will be the first plant in Malaysia to produce pulp for paper makingand related products,” she told reporters during a tour to the company’sthree plants here.

They are Ecofibre Technology Sdn Bhd, Ecologico Packaging Sdn Bhd andStable-Win Sdn Bhd, which are involved in palm oil milling and downstreamactivities such as in making products from shredded EFB into fibre, namelyfibre mats used for soil conditioning, food packers and linings forhanging pots.

Yeo said the company had, in December 2004, signed an agreement withHangzhou Project Research & Institute of Electrochemical in LightIndustries.

"Our Chinese counterparts are involved in the research and developmentactivities on pulp making from EFB,” she added.

Yeo said the company would only focus on pulp making and not paper per se,as the demand for the former was greater in China and Malaysia.

She said it was not viable to produce EFB pulp in China as the rawmaterials were easily available here and it would be costlier to transportEFB to China. "EFB pulp is much cheaper than pulp from wood trees, whichcould easily cost up to US$450 per tonne," said Yeo.

She said EcoFuture would use pricing to induce local buyers to switch tothe EFB pulp, which currently was imported from Australia and Russia.

Yeo said from 2006 onwards, 80% of the profit would come from downstreamactivities compared with the present 60% while the contribution frommilling would be reduced to 20% from 40%.

"We believe the quality of our pulp is as good as internationalcompetitors and we are able to sell at a more competitive price," Yeo toldreporters during a factory visit in Johor.

She said the current selling price for pulp was about US$450 (RM1,710) pertonne while Ecofuture could market Ecopulp for about US$400 per tonne at acost of US$250 per tonne. It has received inquiries regarding its pulpproduct from West Asia, Europe, Japan and China.

On its Ecomats business, Yeo said the company had received a contractworth RM500,000 to supply its products for the upcoming 2008 Olympic Gamesin China. Apart from mats, the fibrous raw material is used for pulp,paper, medium- density fibre board, compost, fertiliser and bedding.