TAWAU, June 8 (Bernama) -- Palm oil mills in Sabah should expand into thecommodity's downstream industries to diversify their revenue source, saidChief Minister Datuk Musa Aman.

Most mills in Sabah only processed raw palm oil although they are capableof embarking on downstream industries. The 93 palm oil mills in Sabahprocessed up to 20 million tonnes of oil palm bunches a year, he saidSunday.

"The growth of palm oil mills in the state showed government support fordownstream industries for Sabah's main commodity such as palm oil," hesaid at the Dumpas palm oil processing plant ground-breaking ceremonyhere.

The RM32.7 million plant, built on a 50 hectare site, that can process 45tonnes of palm oil every hour, is expected to be ready in 2005.

The factory is a joint venture between Sabah Softwood Sdn Bhd and RentakHasil Sdn Bhd where the former had diversified its activities from woodproduction.

Musa said an estimated 1.2 million hectares of land in Sabah was plantedwith oil palm making up 29 per cent of palm oil plantation in Malaysia.

The recent demand for Malaysian palm oil from Iran and Eqypt was veryencouraging and statistics show that Iran imported 65,000 tonnes of palmoil from Malaysia in 2001 and 100,000 tonnes in 2002," he said.-- BERNAMA