Berita Arkib

ZAMBOANGA CITY, July 23 Asia Pulse - The palm oil industry, whichcatapulted Malaysia and Indonesia into the global oils trade, may emergeas the "tree of peace and development" for the troubled island ofMindanao.The Philippine Coconut Authority (PCA), the Southern PhilippinesDevelopment Authority (SPDA) and the Mindanao Palm Oil IndustryDevelopment Coordinating Council Inc. (MPOIDCCI) signed a memorandum ofagreement (MOA) to fast track programs for the development of the palm oilindustry and the private sector's commitment to invest in palm oilproduction.PCA administrator Danilo Coronacion said that the country presently has19,817 hectares of oil palm plantations, producing an average of 54,333metric tons of palm oil as against the average consumption requirement of94,400 metric tons."The increasing palm oil needs, particularly in the fast food business andfish canning industry in SOCSARGEN, have further amplified our need toimport palm oil that depletes our meager dollar reserves," he said.Coronacion stressed that in order for the palm oil industry to establishground in the country to be self-sufficient by 2010, the government mustengage the participation of all stakeholders and appropriate sectors toformulate and forge consensus on a policy and strategy framework on thedevelopment of oil palm industries."By 2010, we should have 35,315 hectares of full bearings palmscomplemented with seven units of oil mills with a 20-30 ton fresh fruitbunch (FFB) per hour capacity," he said.However, Coronacion emphasized that the policy and strategy framework mustinclude conditions that may adversely affect the environment. Suchconditions include that planting oil palm shall not be done in coconutareas; production in areas covered by agrarian reform and ancestraldomains shall be under a contract growership scheme; identification ofmarket niche for palm oil, like for food use to minimize competition andprovision of complementation scheme with the coconut oil; and monitoringand regulation in the use of chemical input.The PCA and SPDA have identified some 447,000 hectares of potential areasin the Mindanao and Visayas region suitable for oil palm planting.Foreign investors from Malaysia, who recently visited Mindanao,categorically affirmed that the region, compared to Indonesia, is an ideallocation for oil palm projects since Malaysia's available lands havebecome limited.At present, Indonesia's peace and order situation and investment taxpolicies are also discouraging further investment in palm oil development.They indicated that Mindanao has a favorable investment climate with clearland tenure arrangements, competitive labor costs, consistent andpredictable investment policies, and sound bureaucratic processes.On the other hand, the Philippine commercial attache to Malaysia GlenPenaranda said the Board of Investments (BOI) has intensified theircampaign to negotiate government to government arrangements for plantingmaterials, technology transfer and financing ventures.The Land Bank of the Philippines (LBP) declared that prospective andexisting oil palm growers now ave access to loan packages from rural banksthrough a re-lending scheme.The LBP said these special loan packages have been designed to cater tothe oil palm's gestation period, allowing farmers to enjoy financingbenefits until the oil palm is ready for harvest.

JAKARTA, July 16 Asia Pulse - Indonesia is expecting to export up to 10million tons of palm oil a year for the next five to eight years' time orhigher than the present level of four million tons a year."The target is achievable if people or local administrations do not hinderthe palm oil plantation business," Agriculture Minister Bungaran Saragihsaid after opening a seminar on the country's palm oil business on Monday.He said palm oil business remained profitable and prospective andtherefore he was optimistic the target would be met.National exports of palm oil in 2001 reached 4.9 million tons worth US$1.1billion and are estimated to increase to 5.4 million tons worth US$1.5billion this year, according to the general chairman of the IndonesianAssociation of Palm Oil Producers, Derom Bangun.Exports go to 96 countries with India, China, Spain and the Netherlandsbeing the largest importers.He said China's imports of palm oil at present totalled 2.4 million tonsand 700,000 tons of them came from Indonesia. Exports of the commodity toIndia reached 1.6 million tons in 2000 and 1.5 million tons in 2001, hesaid."For 2002 exports to India are expected to remain as much as last year,"he said.Darom said national palm oil production reached 8.3 million tons in 2001while domestic demand was only recorded at 3.5 million tons so that theexports would not affect domestic supply."In 2002, production is expected to increase by around eight per cent tonine million tons," he said.He believes the target would be reached if local administrators wouldinvite investors to develop plantations in their respected regions.Darom said he had urged the government to eradicate export tax for palmoil, which now stands at three per cent to increase the commodity'scompetitiveness.He said the move was needed as palm oil now had to compete with oil fromsoybeans, sunflower and canola."In view of that we hope the tax will have been wiped out by 2003," hesaid.In exchange for the loss of state income from the tax he suggested thatthe government increase the income tax of palm oil industries."If production and exports increase income tax will also increase," hesaid.

BALI, Indonesia, July 15 (Dow Jones) - Indonesian plantation companies aregetting around the credit squeeze in the country by partnering withinvestors who can build mills on a "build-operate-transfer" basis, aMalaysia-based private consultant told Dow Jones Newswires.The method appears to be the most viable way ahead, says Henry Fernandez,a consultant to several Indonesian companies.In an interview on the sidelines of an oil palm conference in Bali lastweek, Fernandez said plantation companies in Indonesia have issued tendersfor the construction of about 30 new oil palm mills this year, includingthree being built by the Sinar Mas Group.Many of these plants are expected to be built through the"build-operate-transfer" arrangement.Before becoming a private consultant, Fernandez spent over 20 yearsworking at Malaysia's Kumpulan Guthrie Bhd., before retiring as aproduction controller in 1996. He then served Indonesia's Sinar Mas Groupas a vice president for four years, before starting his consultancy workin 2000.The "build-operate-transfer" arrangement is usually structured in a waywhere the investor builds the mill and runs it for a period of seven to 10years, after which ownership is transferred to the plantation company.The plantation company, on the other hand, guarantees a steady supply offresh fruit bunches, or FFB, the feed stock for crude palm oil throughoutthis period.Growth in Indonesia's milling capacity lagged behind plantation outputexpansion following the Asian financial crisis of 1997, when internationalfunding of the Indonesian oil palm industry nearly stopped, according toFernandez."In the case of Indonesia, country risk is taking a higher profile thanindustry risk," he said adding Indonesia is still plagued by a prolongedcredit squeeze compared with most of its Southeast Asian neighbors.Internal funding is still very tight, while foreign investment hasremained sluggish ever since, he said.When international funding was abruptly cut off in the midst of thefinancial crisis, most Indonesian companies were in the early stages ofdeveloping their plantations, he said. Building milling capacity was of alower priority, he added.Plantation companies typically borrow funds over an extended period, firstfor land acquisition and oil palm cultivation and later for otherinvestments such as building mills and refineries. They borrow to set upmills usually in the third or fourth year of development when trees nearmaturity and are about to bear fruit.After the financial crisis, many companies which had developed plantationson borrowed funds found it impossible to raise new funds for setting upmills.In some rare cases when domestic banks were willing to lend, interestrates were extremely high amid the plunging rupiah versus the dollar.Processing Capacity To Be Immediate Investment PriorityFernandez said despite the recent increase in the international prices ofpalm oil, setting up processing capacity - particularly milling plants -will remain a priority for Indonesian companies in the years to come.Bringing new areas under cultivation will take a clear back seat, headded.Indonesia also has enough refining capacity to process all of its currentrequirement for processed palm oil.Some of this capacity may also be underutilized because much of theIndonesian palm oil is still exported in the crude form, Fernandez said.Crude palm oil exports constituted 43% of the total production in 2001.In contrast, there is a severe shortage of milling capacity, especiallywith newer areas planted before the crisis reaching maturity now, he said.Unlike in the case of other oilseeds, oil palm fruits need to be crushedsoon after harvesting and even a slight delay can lower the quality of theoil that is extracted. Too long a delay makes the crop completelyunusable.In Indonesia, many of the smaller plantations and small farmers depend onmills owned by larger companies to buy their fruits, but in times of peakproduction and capacity constraints, big companies are reluctant to takein outside crop, leaving much of it to rot on trees, Fernandez said.Capacity Shortage More Acute In Kalimantan, SumatraShortage of milling capacity is the most acute in Kalimantan and SouthSumatra, areas where plantation development was the fastest in the yearsbefore the financial crisis.Rough industry estimates indicate at least one million tons of fresh fruitbunches, or FFB, were wasted last year due the lack of milling capacity."When prices are too low, it doesn't make economic sense to take your cropto someone else's mill. So they let it rot," Fernandez said.According to private estimates, Indonesia has nearly 300 mills spread oversome 16 provinces.About 240 of these are in Sumatra and nearly 40 in Kalimantan, but Sumatrastill faces a capacity shortage, particularly in the peak productionmonths.Sumatra's mature plantations of about 2.12 million hectares yield about 43million tons of FFB a year. In other words, the area requires a millingcapacity of around 10,320 tons of FFB/hour in peak production months.The available capacity, however, is only about 9,650 tons/hour, leaving ashortfall in capacity of 256,000 tons of FFB a month, Fernandez said.The scarcity will become more severe this year when some 200,000 hectaresof newly mature plantations are expected to come onstream.

07/16/2002 (The Jakarta Post) - Palm oil producers called on thegovernment to remove the export duty on crude palm oil (CPO) in a bid tohelp boost the competitiveness of the commodity on the internationalmarket.The Indonesian Palm Oil Producers' Association (Gapki) said that theassociation had sent a letter to the Ministry of Trade and Industry urgingit to remove the prevailing three percent export duty on CPO.Gapki chairman Derom Bangoen said on Monday that the export duty wasintroduced last year by the government to discourage CPO producers fromexporting their products at a time when the price of cooking oil was at arecord high.CPO is the raw material used in the production of cooking oil, which isconsidered a strategic commodity in this country, where the people arepartial to fried food."The price of cooking oil is relatively stable now, but the government isstill maintaining the export duty on CPO,"Derom told reporters on thesidelines of Gapki's annual meeting.Many local exporters, said Derom, had complained that the export duty hadaffected the competitiveness of local CPO products on overseas markets."They (the exporters) can't lower the price of their CPO while competitorsfrom Malaysia are offering lower prices. This has created difficulties forlocal exporters,"he said.He said the association would also make a formal request to the financeministry to drop the export duty.The government imposed the export duty on CPO amid fears that rising CPOprices on the international market could prompt local producers to exporttheir palm oil.If this happened, it could have led to a shortage at home and furtherpushed up the price of cooking oil.Derom said that removing the export duty would also help increase theprice of palm fresh fruit bunches, which in turn would encourage farmersand plantation firms to boost production."So far, the low price for fresh fruit bunches has discouraged growers andplantation firms from expanding their plantations,"he said."How can we meet the government's export target of 10 million tons overthe next five years if there's no expansion in the plantation area,"headded.Indonesia, the world's second largest palm oil producer after Malaysia,aims to export some 5.5 million tons this year, up from 4.9 million in2001.

07/14/2002 (Asia Intelligence Wire) - HERE'S a terribly sexy idea:supposing we could grow plastic, like we grow rice or rambutans? We'dnever have to worry about running out of petroleum. It would be cheap but,more importantly, biodegradable.A consortium of Malaysian scientists, working with the MassachusettsInstitute of Technology, is designing a way to harvest plastic from thefronds of oil palm trees.Why the fronds? Because getting it in the oil would confuse, not tomention scare, entire populations of consumers. And fronds have so farbeen a low-value part of the tree."In theory, all it needs are rain and sunshine,"says Ruslan Abdullah,associate professor of plant genetics at Universiti Kebangsaan Malaysia'sSchool of BioSciences and Biotechnology.In reality, it's more workable than earlier attempts at getting bacteriato produce biodegradable plastic although it borrows genes from the samesource."Plants don't readily produce plastic but some bacteria do," says Ruslan."We've implanted those bacterial genes into oil palm. The plants are aboutsix months old. In about a year, we should see this plastic."Ruslan and his team of researchers implanted the two plastic-making genesfrom the bacteria Ralstonia eutropha. That's genetic engineering.But to get bioplastic, it's metabolic engineering at work: active aminoacids from one of those genes piggyback on a series of biochemicalreactions that normally take place within the tree, and trick the frond'scells into storing the bioplastic.Ruslan's assignment - part of the five-year multi-agency Malaysia-MITBiotechnology Partnership Programme - is to park those genes in the rightplace."We want plastic in the leaves," says Ruslan, "we don't want it in the oilor anywhere else. There are good reasons for that."Palm oil is good as it is. To install plastic into it - even if it'sedible like those funny sweet wrappers - would stir up a stingingpsychological hornet's nest that may shatter palm oil's well-entrenchedposition in the food market.Oil palm fronds, on the other hand, are low-value and traditionally gointo compost, animal feed and to a smaller degree, biomass fuel.Still, the most powerful driver in this is the prospect that the worldwill runout of petroleum - the traditional source of plastic - in lessthan 50 years. For over a decade now, scientists have been desperatelyhunting for alternatives because no matter what social engineers havetried, people won't give up their plastic."Petroleum-sourced plastic is made of non-degradable polyethylene," saysRuslan. "That's always been a problem. Bioplastic is made of carbon,oxygen and hydrogen, the stuff the earth is made of. And if it grows ontrees, then it would be renewable."Bioplastic's best-known building blocks are polyhydroxyalkanoate (PHA) andpolyhydroxybutyrate (PHB), both entirely biodegradable. In nature, severalkinds of bacteria produce these substances. Typically, they convertcarbohydrates into a polymer and store it in their cell walls.Evolution theorists think polymer-filled cell walls might be a reservoirof food when it's scarce, like human bodies store fat, or possibly, afortress impenetrable to viruses and other invaders.That's what prompted the first attempts at making bioplastic. But infactories, getting bacteria to do it is expensive because the microbesneeded a rich diet of sugars, starches and fats, pampering in the rightenvironment plus a process to crack those cell walls to extrudebioplastic.The most famous of these is the proprietary Biopol, developed by ICI inBritain, acquired by Zeneca by way of merger, then sold to Monsanto, whichhas since put it up for sale. Biopol, although it degrades efficiently inlandfills, does not have many customers at RM28 per kilogramme. Syntheticplastic costs about RM2 per kg.Already, British and US scientists have turned to getting plants likecanola and rapeseed to produce bioplastic, also by implanting a gene froma plastic-making bacterium. But some plants have forseeable problems:after harvesting the useful part (oilseed or whatever), you need to chopthe plant down to process for bioplastic. Then you plant again. Would thatbe expensive?With oil palm, the tree stays, usually for more than two decades. Thefruit is taken for the oil people. The fronds, which fall off and getcleared every day in any case, present little change to existingplantation practice.No matter how exciting all this sounds, the bridge between bioplastic inoil palm fronds and actual usefulness has not been built yet. Will it beeasy to process? Will it be a good quality plastic? Would it be strongenough for a plastic bag or for the dashboard of a car? Will it beeconomical?At the Malaysian Palm Oil Board - co-ordinator of the Malaysia-MITcollaboration - researchers are investigating these issues."It's exciting but still very early days," says Ruslan. "We're likely tosee the real picture in about 5 years. The combined body of research willshow us what really works."

07/14/2002 (Asia Intelligence Wire) - SIX years ago, Ruslan Abdullah setout to genetically engineer oil palm trees to make them resistant to anasty pest called the bagworm. He's bagged the worm.In the isolated nethouse near his lab at Universiti Kebangsaan Malaysia'sSchool of BioSciences and Biotechnology, Ruslan's bagworm- resistant treeshave become a hell for this pest.He has released huge numbers of the bagworm on those oil palms. Oh, thebagworms munch the palms all right. But over 35 days, they eat, dehydrate,shrivel up and die by slow starvation because they can no longer digestthe fronds, their favourite food.The fronds, and the rest of the tree, contain a protease inhibitor.Protease, produced by the bagworm's digestive system, breaks down proteinsit consumes into amino acids, the building blocks of life. The bagwormneeds this enzyme for digestion but the inhibitor, now built into thetree, disables protease and makes digestion impossible.In Ruslan's set of controls - ordinary oil palm trees - the bagworms aretruly happy."The implanted gene is stable in the plant,"says Ruslan."It's showing upin every part of the tree. I take this as a good sign, a signal that wecan move on to the next phase."The next step would be tests for other kinds of insects, includingassorted caterpillars and the rhinocerous beetle, which likes to eat themeristem of young palms and kills them. Later, he will need to devise asystem to introduce the same gene into planting material.Ruslan's first batch of bagworm resistant trees is five years old.They've grown so tall they will soon burst through the roof of the securenethouse."I'll have to renovate, extend the height,"says Ruslan. Frondsfrom those 24 trees are about six metres tall. Their trunk diameter isabout 30 centimetres.He has since created four more generations to ensure that the geneticengineering part can be repeated systematically. There are now about 100trees in the nethouse, and in his lab, another 100 very young trees stillin test tubes. The trees represent the three oil palm varieties here - thedura, pisifera and the hybrid, tenera.The resistance to bagworm in those trees comes from the protease inhibitorgene found in the cowpea plant. The cowpea is resistant to worms.Researchers at Cornell University isolated the gene several years ago, andtested it by implanting it into tobacco and beans, making them resistantto worms too.When Ruslan started work on this project using this same gene, it was withsome trepidation."There's a big difference between an oil palm tree and acowpea plant, or beanstalks,"says Ruslan."Scientists used to think the oilpalm couldn't be genetically engineered to give it desirable qualities.But given oil palm's problems associated with pests, it would have beenunfair not to try."Pests are a serious matter in oil palm plantations. The bagworm, aplanter's nightmare, slashes productivity by as much as 43 per cent.Bagworms eat the leaves until the fronds look like skeletons. Some leaftissue is used to make the bag. When the foliage drops off the tree, nophotosynthesis takes place. In the end, no fruits are produced.Unlike other pests, spraying insecticide is difficult because the worm issafe in the protective bag it builds around itself. Catching it in itshatch cycle is tricky. The only thing that works is picking them off byhand, which besides being extremely labour-intensive, is practical onlywith short trees. Two cycles of bagworm is considered infestation.For a truly bagworm-free future, the oil palm tree will need to pass onthe gene to its young. Already, Ruslan has found the gene in its pollenand the mesocarp of the fruit."My next investigation is to see if the geneis present in the female reproductive parts of the flower."For this - to examine whether or not the gene moves from generation togeneration - Ruslan and his team have received a 2002 IRPA grant forRM390,000. Next in Ruslan's agenda is to study gene targeting, a sciencethat overcomes non-specific insertion of genes engineered into plants.But what about toxicity, particularly to ruminants that graze inplantations and eat fallen fronds?"Mammals don't react to proteaseinhibitors at all,"says Ruslan."Still, I'd like to test this in a range ofanimals that may hang around an oil palm plantation."In nature, oil palm does not cross with other plants easily, not even withcoconut, although that was the source of the bagworm in the first place.And since all its wild relatives live in Africa, it's not likely thatbagworm resistance in oil palm will pass on to other crops or plantspecies.

07/16/2002 (Asia Intelligence Wire) - Three private and state agencies arepreparing to work with a Swedish chemical producer to develop a newbio-ethanol fuel called e-diesel for diesel vehicles.Representatives of the National Metal and Materials Technology Centre, PTTPlc, the Pollution Control Department and Akzo Nobel Surface Chemistrysigned a memorandum on research and development of the alternative fuel.The project would study a way to produce e-diesel, a mixture of diesel oiland 10% crop-based ethanol, its properties and commercial viability, saidPuritad Bhandhubanyong, the director of MTEC.He said MTEC would set aside 10 million baht to support the one-year pilotproject while other agencies would provide equipment and raw materials.The fuel will include an additive called Beraid ED-10 produced andsupplied by Akzo Nobel. The additive has properties to balance diesel oiland ethanol. It is the first time the company has worked to develope-diesel outside of Europe.Trials will involve three types of fuel mixtures: 1%, 1.5% and 2% BeraidED-10 with 89%, 88.5% and 88% diesel oil. The portion of ethanol would beconstant at 10%."Each group will be tested with diesel engines to compare efficiency ofvehicle performance, combustion, exhaust fume, acceleration rate,durability and corrosion of engines and parts," said Mr Puritad.Sawang Boonyasawat, executive vice-president of the PTT Research andTechnology Institute, said the project, if successful, would help savemillions of baht in annual import costs for diesel oil.E-diesel would be commercially viable, he said, if ethanol was priced atno more than 12 baht a litre and diesel oil at a maximum of US$25 abarrel.Previously, PTT and the National Electronics and Computer TechnologyCentre had collaborated with Ford Motor Co of the United States toresearch and develop so-called diesohol, a mixture of diesel oil and 10%ethanol, using Ford Ranger one-ton pickup trucks.Gasohol, a mixture of gasoline and 10% ethanol, is available at a few PTTservice stations. Still, sales are only 1,000 to 2,000 litres a daybecause the supply of ethanol remains small. The daily supply from theRoyal Chitrlada Project is 400 to 500 litres. Gasohol is 50-70 satang alitre cheaper than premium gasoline.Should the e-diesel project succeed, Mr Sawang said he would seekgovernment support to use the fuel as in Brazil, where the governmentencouraged the use of diesohol to reduce ash deposits.Urban Lofvenberg, global account manager of fuel additives for Akzo Nobel,said the company opted to support the project because the use of ethanolin Asia remained rare. Thailand was making the most progress in thedevelopment of the additive.

Jul 18, 2002 (OIL WORLD FLASH) - Due to the unusually low growth of exportsupplies we forecast world imports of palm oil to rise only 0.32 Mn T or1.8% to 18.30 Mn T in Oct/Sept 2002/03. This compares with an increase byan estimated 0.61 Mn T this season and an average 1.36 Mn T annuallyduring the five seasons ended 2000/01. The increase next season will beonly moderately larger than the growth of 0.2 Mn T registered in the tightseason 97/98 when the price of crude palm oil cif Rotterdam averaged $640. The market’s rationing job in 2002/03 will not be easy either. Alsoin 1997/98 some countries increased their imports more sharply, viz. Indiaby 290 Thd T, Malaysia by 215 Thd T, Pakistan by 190 Thd T and the EU by105 Thd T. As the combined total of these countries alone far exceeded theincrease in world imports, other countries had to reduce imports more orless sharply. The bulk of the reduction occurred in developing countriesand the largest decline was registered in Chinese imports, viz. by 361 ThdT. Next season we expect the strongest import demand to again come fromIndia where the poor monsoon will affect domestic production while carryinstocks of oils next Oct 1 are estimated to be down 0.28 Mn T on the year.We therefore expect Indian palm oil imports to reach 3.8 Mn T next season,only second to the record level of 3.85 Mn T in 2000/01 and up 0.53 Mn Tfrom this season. Furthermore we expect the imports of China to increaseby 160 Thd T and those of the EU by 50 Thd T. This means that the importsof the rest of the world will have to be reduced by 420 Thd T next season.This will probably not be possible without prices for crude palm oil cifRotterdam rising above $ 500 and establishing at least a small premiumabove Dutch crude soybean oil fob exmill. Thd T in April/June, with thebulk of it shipped in June. This compares to only 44 Thd T in April/June2001. A further pick-up in exports is reportedly occurring this month.Argentina is seen exporting at least 100 Thd T of soybean oil to China inJuly and some smaller quantities are being shipped from Brazil.

19 July 2002 (Business Times) - A GROUP of Malaysian investors have teamedup with the Filipinos to set up a RM28 million palm oil mill in thecentral Philippine province of Bohol.

KUALA LUMPUR, July 16 (Bernama) -- Primary Industries Minister Datuk SeriDr Lim Keng Yaik said there is a great possibility of good investmentopportunities with several large companies in China in the oleochemicalindustry and the development of brand products in soap, detergents,toiletries and cosmetic.He said that during his mission to China recently, the Malaysiandelegation met and discuss possible joint ventures with Chinese companiesin the field of these palm oil downstream products.

Online investment advisor Surf88.com writes on prospects in the palm oilindustry.NOT AS BAD. Overall, the June palm oil statistics turned out better thanexpected. While crude palm oil (CPO) production increased 2% as expectedfrom May, exports did not decline as much as feared, falling 7.2% versusexpectations for a 9% drop.Palm oil stocks continued to fall for the fourth consecutive month, downby another 2% to just above 910,000 tonnes.For the first half of 2002, CPO production fell 6% from the same periodlast year while exports were about 5% lower. Palm oil stocks at end-Junewere 25% below end-2001 levels, and the lowest in four years.Reasons to be still positive. The recent weakness in CPO prices was indeedtemporary, and prices have since climbed back to around RM1,380 per tonne.We believe there is room for further upside even though the crop isentering its peak production season.Meteorologists now believe that the chance of El Nino happening at the endof this year is as high as 90%. If so, this will affect palm oilproduction next year, after an estimated 10% decline in 2002.Latest estimates for major global edible oils already point to anotheryear of tight supply, reducing stocks to its lowest levels in four years.We are hence still positive on plantation stocks and would retain ouroverweight call. Our top picks are KLK (RM6.50), PPB Oil (RM3.12), IOICorp (RM6.30) and IOI Corp-WA (RM2.77).l For more reports, click on www.surf88.com

Tuesday, July 16, 2002 (The Star) - MALAYSIA will soon become a majorproducer of high quality paper made from worthless empty palm oil fruitbranches, thanks to Chinese technology.Primary Industry Minister Datuk Seri Dr Lim Keng Yaik said a Malaysiancompany has come up with the technology to turn the empty fruit branchesinto high quality fibres that were suitable to produce various types oftimber and paper products.“In this trip to China, we found several Chinese machinery companiescapable of turning these fibres into high quality paper.“In fact, we will be starting a test programme with this Chinese companyvery soon to produce brown wrapping paper using 100% palm biomass fibres,”he said in an interview here yesterday.His ministry would be sending 30 tonnes of the raw material to the Chinesecompany in Shanghai, which has claimed that it could make 30 tonnes ofpaper out of the material.The Chinese are known for producing high quality but low-priced machinery.“Our experts will witness the process to ensure that only palm biomassfibres are used. I am very impressed with what the Chinese have shown meand am very excited about the future of the palm oil industry,” he added.Lim said the empty fruit branches were worthless and the 360 palm oilmills in the country gather 30 million of the biomass a year. Some of thebranches are turned into low-grade fertiliser and carted back to theestates but most are discarded.“In most cases the mills have to beg or even pay others to cart away theempty fruit branches but with this new technology the biomass will becomevery valuable.”Lim said the Chinese already had the machinery to make such paper usingdiscarded padi stalks, adding that making paper from empty palm fruitbranches in Malaysia was a cheaper option than using discarded padi stalkor even timber.“All the empty branches are centred at the mills thus paper manufacturersneed not gather the raw materials from all over the place like they do fordiscarded padi stalk.“It is cheaper than using timber or wood chips as there is no need to chopdown trees, pay for logging royalties, loggers and forest rehabilitation,”said Lim, adding that producing paper from palm biomass was 30% cheaper.He said palm biomass fibres could be used to make all sort of papersincluding newsprint, which cost the country about RM2bil a year to import.A factory fitted with Chinese machinery is estimated to cost aboutRM500mil compared with RM6.8bil for the normal paper mill producing500,000 tonnes of paper.He said the biomass fibre could also be used to make multi densityfibreboard and particle board.There was also technology available to turn the trunk of the palm treeinto high quality timber, he added.