10/06/2010 (Bernama), Kuala Lumpur - Malaysia aims to boost palm oil industry's output to the gross domestic product (GDP) to RM21.9 billion, with RM69.3 billion in exports earnings during the 10th Malaysia Plan period (2011-2015).

To achieve the target, Malaysia will be promoted as a global hub for palm oil and the preferred destination for foreign investments in oleochemical-based products, bulking facilities and research and development.

Last year, the palm oil sector contributed RM17 billion or 3.3 per cent to the GDP and accounted for RM49.6 billion in exports, says the Economic Planning Unit in the Prime Minister's Department in the 10th Malaysia Plan (2011-2015) Report released today.

Prime Minister Datuk Seri Najib Tun Razak tabled the 10th Malaysia Plan in the Dewan Rakyat today.

Other initiatives are to develop Palm Oil Industrial Clusters into integrated sites for promoting downstream activities such as biofuel, oleochemicals, biofertilizers, specialty food and biomass products, nutraceuticals and pharmaceuticals.

The report says there was significant untapped opportunities to grow the sector particularly in downstream activities.

In this regard, the government will encourage good agriculture practices, agronomic management and mechanisation, especially among smallholders and centralised procurement of agriculture inputs such as fertilizers and pesticides to lower input costs for smallholders.

Malaysia is a global leader in the palm oil and basic oleochemicals industry.

From 2005 to 2009, total oil palm planted area increased by 15.8 per cent to 4.69 million hectares and crude palm oil production rose by 17.4 per cent to 17.6 million tonnes.

However, despite these achievements, the industry continues to face issues related to low productivity among smallholders, rising production cost and dependency on foreign labour in upstream activities.