Sunday December 19, 2004 KUALA LUMPUR: Ecofuture Bhd, an oil palm biomasstechnologist firm, is expected to invest RM30mil to set up a pulpproduction facility using oil palm biomass in Segamat, Johor.

The facility would be the first of its kind in Malaysia.

The investment for the facility, which is expected to start production byend of 2005, would be partly financed through the proceeds from itsinitial public offering (IPO), its chief executive officer Yeo Kim Luangsaid yesterday.

"We expect the plant to contribute about US$3mil (RM11.4mil) in turnoverfrom 2005 onwards," she said after signing a technology acquisitionagreement with China's Hangzhou Project and Research Institute of ElectroMechanics in Light Industry to produce pulp from empty fruit bunches(EFB).

Minister of Plantation Industries and Commodities, Datuk Peter Chin FahKui, witnessed the signing ceremony.

Annually, Malaysia disposes about 20 million tonnes of palm oil waste,which Ecofuture should be able to tap into as a lucrative business andprovide a shot in the arm to the company’s earnings, she said.

With the acquisition of a new technology, Ecofuture would be able toproduce as much as 10,000 tonnes of pulp a year, the bulk of which wouldbe exported to other users abroad or to local paper producers, Yeo said.

"A third of the pulp produced from the plant will be utilised to produceour own environmentally-friendly packaging materials," she added.

As more and more countries were looking at environmentally-friendly goods,there was an enormous market for the company’s products.

"Many governments have difficulty controlling non-biodegradable wastes.This should put our products in good stead to compete not only locally butglobally as well. Apart from China, we are already reaching towards WestAsia to countries like Kuwait and Lebanon," she said.

Yeo said the development of this technology to convert oil palm biomassinto pulp and paper was expected to benefit the country in two ways, bysolving the perennial environment problem of EFB dumping, and bybolstering the local import-reliant pulp and paper industry.

Decreased reliance on imported pulp and paper products could help toreduce the current import bill of about RM3bil annually.

In the second industrial master plan, it has been targeted that by 2005,the industry is to possess the capacity to produce a total of threemillion tonnes of pulp and paper products a year, she said.

However, at present, the capacity installed stands at only 2.1 milliontonnes a year, with pulp production capacity standing at 0.9 milliontonnes, and paper products capacity at 1.2 million tonnes.

At the rate of five tonnes of EFB producing a tonne of pulp, and assumingthat 50% of EFB is available for pulp production, Malaysia has thepotential to produce three million tonnes of pulp per year from EFB alone,and would be able to meet and even exceed the targets set in the secondindustrial master plan.

Based on the current pulp price of around US$500 (RM1,900) per tonne, thevalue of this opportunity stands at US$1.5bil (RM5.7bil) a year.

Ecofuture will be listed on the Mesdaq market of Bursa Malaysia nextmonth. Ecofuture is offering for sale 43.6 million new shares of 10 seneach at an issue price of 25 per share, raising a total of RM10.9mil.

For the financial year ended Dec 31 2003, it posted a net profit ofRM2.049mil on the back of RM81.436mil in turnover. –Bernama