IPOH, Dec 10 (Bernama) -- The Rural and Regional Development Ministrythrough Felcra and Risda is ready to work with a company from China toproduce paper from the fronds, empty bunches and trunks of oil palm.

Its Minister, Datuk Aziz Shamsuddin said the company was keen on settingup its factory in Malaysia following its unsuccessful attempt to plant oilpalm in the region of Hainan, China.

Aziz said he had asked the company to work with Felda as it owned a largearea of oil palm plantation land and was systematic in its managementoperations.

He said the paper producing mill was expected to be built in Pahang as alarge land area and source of clean water supply, both of which aregreatly needed for the industry, could be easily obtained in the state.

"I understand that discussions are going on between the company and Felda.The mill could be built in June next year and paper production could startin 2006," he said after attending a Hari Raya gathering with media membershere today.

Last year, the then Primary Industries Minister, Datuk Seri Dr Lim KengYaik, had said that the fronds, bunches and oil palm felled for replantinghad potential as raw materials for the paper industry which is estimatedto be worth at RM3 billion.

Aziz said Felcra currently had 240,000 hectares of oil palm plantationland and Risda almost two million with the potential to be involved in thepaper production industry.

He said if the venture to produce paper from oil palm was successful, itwould help the country reduce its import of paper and may even go on toexport it in the future.

"We have already produced cooking oil, cosmetics, medicine, diesel fromoil palm. The potential to produce paper from the fronds, bunches andtrunk is also very good and should be exploited," he said.

-- BERNAMA