Sunday October 3, 2004 MIRI: The Plantation Industries and CommoditiesMinistry wants to see more mechanisation in the plantation sector toreduce the amount spent on labour, especially foreign workers.

Minister Datuk Peter Chin Fah Kui said the ministry was worried about thehigh labour cost in the sector, as it now constituted some 40% of totalproduction cost.

My ministry deals with many industries that are very labour-intensive,especially the palm oil industry.

The cost of labour takes up 40% of production cost. This is too high. Weare trying our best to bring it down to 30% at least, he said yesterday.

Chin expressed particular concern over the surge in the cost of hiringforeign workers.

It is very expensive to recruit them due to increasing demand from themfor higher wages, more overhead expenditure for their health examinations,levies and the cost of providing professional training for them, he said.

Chin, who is Miri MP, said the ministry was aggressively introducingmechanisation into the various stages of palm oil production, from theplanting and harvesting to the oil extraction process to reduce dependencyon manual labour.

Under Budget 2005, he added, his ministry had received allocations toprovide for investment in modern machinery to boost efficiency andproductivity in the various industries under its purview.

Companies that invest in machinery can recover the cost in about two yearsthrough better production and less spending on labour, Chin said.

Asked if the recent increase in petrol and diesel prices would hurt thevarious sectors under his ministry, Chin said the logging industry mightfeel the pinch because of higher transportation cost.