26/09/05 PETALING JAYA, (Bernama) -- The Malaysian palm oil industry needsto be more innovative and look at non-traditional avenues for growth,Chairman of the Malaysian Palm Oil Association (MPOA), Datuk Sabri Ahmadsaid Monday.

One of the main challenges has been to increase productivity and theindustry is well on its way on this score through continuous improvementin its planting material as well as more cost-effective husbandry of theplantings, he said.

But with competition particularly from other low-cost producers mounting,Malaysia is facing some disadvantages, the main being the limited land forexpansion and shortage of labour, he said.

He said product differentiation could be a strategy while the continuedefforts to ensure customer satisfaction through customisation of productsand the ensuring of food safety and quality would be also factors to givethe Malaysian industry the edge.

The adoption of sustainable palm oil practices is no longer a novelty buta necessity and the good progress made should be relentlessly pursued andimproved upon.

Sabri said this in his paper entitled, "Propelling the Malaysian Palm OilIndustry towards Excellence" presented at the ongoing International PalmOil Congress (PIPOC) 2005. About 1,500 participants from 43 countries arehere for the four-day congress.

Sabri who is also the group chief executive of Golden Hope Plantations Bhdsaid research in fields that require intensive monetary and intellectualcapital like biotechnology and mechanisation were best undertaken by thegovernment.

He said it was heartening to note that the Malaysian Palm Oil Board (MPOB)has risen to the challenge.

The government, he said was also best suited to undertake negotiations onan inter-governmental basis as well as to facilitate organic growth byreviewing legislature, tax structures, infrastructure and trainingfacility for the industry.

Sabri also reiterated that cost efficient and competitiveness can beachieved through economies of scale by creating a centralised cost andprofit centre to manage production, manufacturing (refinery andoleochemical plants) and export. This is much needed because the Malaysiapalm oil industry is the most efficient in the world, but second in termsof cost effectiveness, he said.

-- BERNAMA