01/01/2012 (Manila Standard Today) - A group of Filipino investors plans to tie up with a Malaysian company in oil palm propagation and later go into processing in the Philippines.

Jesus Arranza, president of the CIIF-Oil Mills Group, said two Malaysian companies expressed interest to team up with the Filipino consortium.

“It is possible that the Malaysian investors will be coming over to discuss the project. There had been preliminary talks. It’s now a matter of finalizing the talks to get the project going by 2013,” he said.

Initial estimates put the cost of the 80,000-hectare oil palm plantation at a maximum of $100 million.

The potential partners have not yet identified a suitable oil palm plantation site. Oil palm is the tree from where the oil, or palm olein, is extracted.

Arranza noted palm oil production might soon outpace coconut oil volume.

A one-hectare palm plantation can process 500 kilograms of oil, higher than the 450 kilos extracted from copra.

“Coconut oil, though, has a premium over palm olein that makes it the best choice for high-end coconut oil-based products such as beauty soaps, pharmaceutical products and other value-added stuff,” said Arranza.

The Southern Philippine Development Authority identified about 304,000 hectares of land in Mindanao that are suitable for oil palm production. At least eight oil palm plantations operate in the Philippines, all located in Mindanao.

The Philippine Palm Oil Development Council Inc. said palm oil imports from Malaysia had steadily increased.

The Philippines in 2009 imported just 119,229 metric tons of palm oil from Malaysia, before nearly doubling to 204,731 MT in 2010 and increasing to 543,000 MT in 2011 worth P28.03 billion. Imports from Malaysia alone could reach 597,000 MT in 2012.

“Given these circumstances, the Filipino group, I learned, is looking at displacing a hefty amount of palm oil imports once it starts commercially,” said Arranza.