03/04/2013 (The Star) - Outgoing Felda Global Ventures Holdings Bhd (FGVH) group president and chief executive officer Datuk Sabri Ahmad has been tipped to head Biodiesel Malaysia Sdn Bhd, a newly established consortium endorsed by the Government and the Malaysian Palm Oil Board (MPOB).

Sabri would likely assume the post of executive chairman in the consortium once his term at FGVH expired in July, said an industry source.

Sabri has over 30 years' experience in the oil palm plantation sector.

His strength is basically in supply chain management, international marketing, logistics, branding and downstream activities such as refining and biodiesel. This is given his exposure at top plantation government-linked companies such as the now-defunct Golden Hope Plantations Bhd, Sime Darby Bhd and FGVH, as well as the MPOB.

Sabri's short stint as MPOB chairman from 2007 to 2010 could be considered a bonus as “he is well exposed to research and development, new technologies and innovations which he can impart to Biodiesel Malaysia,” the source told StarBiz.

Biodiesel Malaysia is believed to be MPOB's shell company set up in 2000, the source shared, adding that the intended paid-up capital for the consortium was still being decided on.

At present, there are two major stakeholders in the consortium FGVH (32%) and Sime Darby (23%) while the remaining stakes are now being offered to other plantation companies, biodiesel producers and petroleum companies.

The source said the formation of Biodiesel Malaysia was aimed at facilitating and accelerating the development of sustainable biodiesel industry in Malaysia.

“The consortium has no intention to compete or monopolise the domestic biodiesel sector. In fact, existing biodiesel players are welcome to take up a stake in it (the consortium),” the source added.

“Biodiesel Malaysia might also consider tolling processing where it would hire a third party to process the biodiesel.

“Therefore, the current facility belonging to independent biodiesel producers would no longer be wasted or running idle,” the source said.

Malaysia produced about 130,000 tonnes of palm-based biodiesel last year, of which 100,000 tonnes were for domestic consumption and only 30,000 tonnes being exported.

“There is a big difference in volume if one were to compare with Indonesia, which produced 1.2 million tonnes of palm-based biodiesel last year,” added the source.

On subsidy for the domestic biodiesel sector, the source revealed that at the current CPO price of RM2,300 per tonne, the subsidy would be about RM80mil a year.

However, if the CPO price escalated to RM3,300 per tonne, then the subsidy could balloon to RM1bil a year to support the biodiesel industry.

“Personally, I don't think oil palm plantation companies would mind paying a small amount of tax to help out with the biodiesel subsidy if the price of CPO hit above the RM3,000-per-tonne mark again,” the source said.

For every RM100 increase in CPO price, FGVH, for example, would be able to reap an additional RM200mil in profits, explained the source.