PUTRAJAYA, Aug 26 (Bernama) -- Oil plantations are expected to undergo arapid development in the new millennium, with a new generation of oil palmplantations finding better and greater value functioning as bio-techfarms.

Executive chairman of plantation giant, IOI Corporation Bhd, Tan Sri LeeShin Cheng said this was possible given the rapid development taking placein biotechnology.

"It is not inconceivable that by the second half of this millennium, oilpalm plantations will turn into this," he said when addressingparticipants at the MPOB International Palm Oil Congress (PIPOC) 2003.

In his paper themed, "Business Strategies For the Oil Palm Industry In theNew Millennium", Lee also said that despite the obvious challenges ahead,he remained positive about the palm oil industry as there were manyopportunities to be exploited.

Giving his views as a professional planter, Lee said even with existingtechnology and current planting material, palm oil yields could besubstantially improved.

He added that the key to lower production cost for palm oil is higher oilyield.

Malaysia's average Crude Palm Oil (CPO) yield of about 3.8 metric tonne(MT) per hectare was below a potential of about six to seven MT forcommercial scale production.

"If we can achieve close to six MT on a national basis, it would mean thatthe current national production of about 13 million MT can be furtherincreased to about 20 million MT," he said.

This in turn would mean an additional revenue of about RM10 billion,without hectarage expansion.

However, he advised that to increase yields to these levels, planterswould, of course, need to select best planting material, optimumfertilizer applications, adequate labour, good harvesting standards anddiligent efforts all around.

"With the rapid advancement of Genetically Modified soy, palm oil is nolonger assured of having a more competitive cost base," he said.

"There is a need to look beyond CPO as the sole source of revenue, tovalue add, fully utilizing all that the oil palm has to offer, such asfull utilisation of bio-mass in order to optimise total returns," headded.

--BERNAMA