29/09/05 PETALING JAYA, (Bernama) -- The palm oil industry is one of theMalaysia's greatest success stories and will remain so as long as it keepspace with the latest technological advancements in oils and fats.

This was the consensus from participants of the just-ended 2005International Palm Oil Congress or better known as PIPOC where about 1,700people, including researchers and scientists, from 43 countries attended.

And the next big thing for Malaysian palm oil is bio-diesel, which is anextension of the country's research and development (R&D) efforts ingetting more value-added from its agro-resources.

Researchers, analysts and market experts have given their "thumbs up" onthe viability and sustainability of palm oil as the primary raw materialfor bio-diesel.

The palm oil industry is now more aware of the potential of bio-diesel andPIPOC has helped industry players to know the European bio-fuel experiencebetter as well as plan ahead for the local bio-fuel industry to synergisewith the global bio-fuel market, said Tan Sri Yusof Basiron,director-general of the Malaysian Palm Oil Board (MPOB).

"These (issues on the potential of palm oil as bio-diesel) are the ideasthat we would like to absorb into the industry and give more value, moneyand profit to the agriculture sector and continue to spearhead the sectorin Malaysia," he said.

In taking the theme of the congress, "Technological Breakthroughs andCommercialization - The Way Forward", on a more solid platform, he saidMPOB would invest RM60 million on a 50:50 joint venture in three palm oilbased bio-diesel planted in Malaysia - two in Port Klang and one in PasirGudang, Johor.

The three plants will produce 180,000 tonnes of bio-diesel per annum -- amodest beginning as this is less than two percent of the total palm oilproduction of 14 million tonnes in Malaysia.

With the higher crude petroleum prices at present and the readilyavailable market for bio-diesel, more investors are likely to put theirmoney in palm-based bio-diesel, said Dr Yusof.

"We are leading the way and we expect more local investors to jump on tothe bandwagon. From MPOB's side, we are ready to provide them with thetechnology on a turnkey basis," he said.

Besides bio-diesel, the 2005 PIPOC also deliberated on downstreamproducts, mainly oleochemicals and the commercial value of palm basedbio-mass.

The potential for oleochemicals is also robust, for two reasons: the firstis the higher crude petroleum prices that make petrochemicalscomparatively more expensive and the rapid development in sectors likesoaps, detergents, shampoos and cosmetics that use oleochemicals.

The congress was told that the detergent market offers huge potential forthe industry, especially in countries that have large populations, such asIndia, China and West Asia.

Intensive research on palm oil has also produced improved raw materialsfor detergents known as Subordinated Methyl Esters (MES), which arecheaper but have better quality than those made from petrochemicals alsoattracted much interest during the four-day meeting.

Especially in China, the rapid development of its economy has seen morepeople aspiring for a better quality of life and paying more attention tocleanliness, safety and health.

That alone will see a big push from China's detergent and soap markets asit lacks raw materials for their manufacture.

The total output of washing products in China has been rising at 10percent per annum in the past five years but much higher growth areexpected in the next five years, says the China Research Institute ofDaily Chemical Industry in Shanxi.

But Prof Dr Rudy Rabbinge, Dean of Wageninge Graduate School in theNetherlands, put the theme of the congress in better perspective when hesaid that R&D efforts alone were not enough as they should have commercialvalue or demand from end users.

Since R&D involved a lot of funds, the outcome should be viable and worththe amount of investment made as "we don't want a technology boom alonebut viable technologies," he said.

Meanwhile, Dr Yusof said as far as MPOB is concerned, 305 various types oftechnology have been found via R&D to bring the palm oil industry togreater frontiers.

Out of this, 30 percent has been commercialised so far.

The Malaysian palm oil industry, including MPOB, invests about RM350million on R&D annually.

Dr Yusof said in going forward, exports of crude palm oil should not bethe only yardstick for the local palm oil industry but it should have moredownstream products as well.

-- BERNAMA