KUALA LUMPUR, July 11 (Bernama) -- Potential investors from China areurged to look at Malaysia's palm-based oleochemical business as an optionto consider besides commercially exploiting the large quantity of biomassgenerated by the palm oil industry."We see the Chinese demand (for oleochemicals) is on a growing trend.

Thus it may now be opportune for entrepreneurs in China to give seriousconsideration to investments in oleochemical manufacturing," PrimaryIndustries Minister Datuk Seri Dr Lim Keng Yaik said.

He said this at a forum on investment opportunities in palm oil downstreamindustries in Shanghai, China Thursday. The text of his speech wasreleased here.

Dr Lim said that the manufacturing could be done either in China or inMalaysia where the raw materials for oleochemicals were readily availablein abundance.

He said that world production of basic oleochemicals is expected toincrease from 5.0 million tonnes in 1995 to 7.8 million tonnes in 2010, ofwhich Asean countries are expected to contribute 3.5 million tonnes or 50percent.

Currently, Malaysia's capacity at 1.2 million tonnes accounted for 70percent of Asean's output which stood at 1.7 million tonnes.

Malaysia thus accounted for 20 percent of the world's supply of basicoleochemicals and these are mainly fatty acids, fatty methyl ester, fattyalcohols and glycerine, plus some amount of fatty amine compound.

The minister said that many world renowned oleochemical giants have cometo Malaysia to establish joint-ventures. The prime factors being the readyavailability of raw materials, especially palm oil and palm kernel oil, aswell as a very competitive incentive scheme.

Apart from investment opportunity in the palm oil sector, Chineseinvestors are also invited to exploit the largely untapped biomass whichhas the potential to be converted into timber materials as well as paperproducts.

"Since China is also a big consumer of timber and paper products, the useof the oil palm biomass presents another attractive investmentopportunity," he added.

Presently, about 3.5 million hectares of land are under oil palm withproduction this year expected to come close to 12 million tonnes.

However, oil production only represents 10 percent of the total biomassproduced by the industry while the remaining 90 percent are mainly in theform of fibres and other lignocellulosic materials, Dr Lim said.

-- BERNAMA

(The informations and opinions expressed in this article represent theviews of the author only. They should not be seen as necessarilyreflecting the views of Palm News)