China's Palm Oil Players Invited To Explore Opportunities In Malaysia

KUALA LUMPUR, Dec 18 (Bernama) -- Malaysia is inviting China's palm oil companies to explore opportunities in the domestic industry.

Minister of Plantation and Commodities Datuk Seri Johari Abdul Ghani said he believes potential partnerships with Chinese companies based in Malaysia will be successful as feedstock is plentiful in the country while Chinese players have a wide market network.

"I would like to set out three important areas in which Malaysia is keen to welcome potential investors to explore. First, we are looking to leverage the circular economy concept across the palm oil industry. Specifically, waste can be converted to green energy in the form of biomass and biogas energy. 

"Biomass energy can be obtained by incinerating palm by products such as mesocarp fibre, palm kernel shell and empty fruit bunch - steam generated will then move the turbines and generate electricity," he said during the Leadership Session 4 entitled "Strategy Synergy in Plantation Industries and Commodities : Mapping the Future Path for Malaysia and China" held in conjunction with the Malaysia-China Summit 2024 (MSC2024) here today.

He said biogas, on the other hand, can be obtained through methane capture from palm oil mill effluent (POME), where for example, a mill with an operating capacity of at least 60 tonnes per hour can generate between 5-7 megawatts (MW) of energy. 

"If around 50 per cent of mills in the country can be outfitted with biomass and biogas capturing facilities, we will be able to generate around 1,100 MW of energy at over 200 locations across the country," he said.

 The minister also cited sustainable aviation fuel (SAF), which was introduced as an initiative to decarbonise the aviation sector, as another area which presents both countries with numerous opportunities.

By 2027, Johari said the government plans to make SAF mandatory for all planes travelling to Malaysia, with a planned blending mandate beginning at 1.0 per cent .

"Second, in line with our goal to increase efficiency and production without expanding land area, we are always seeking new technology in implementing precision agriculture, such as smart farming and data driven decision making, as well as increasing mechanisation and automation across the supply chain. 

"Third, attracting investments to upgrade our pre-existing mills. As at June 2024, there are around 448 palm oil mills of which a lot of these mills have been set up many years ago. Potential investors may work together with mill owners to upgrade these mills by equipping it with the latest technology. For example, the usage of artificial intelligence (AI) can increase operating efficiency by reducing oil losses and the dependency on labour," he said.

Elaborating further on the Malaysia-China bilateral relation in the industry, Johari said the Malaysian palm oil industry’s presence in China has been long established, with the Malaysian Palm Oil Board (MPOB) preparing to celebrate the 20th anniversary of the establishment of the Palm Oil Research and Technical Service Institute of Malaysian Palm Oil Board (PORTSIM) in Shanghai. 

"PORTSIM aims to enhance market presence in China as well as provide technical support and advisory services for local enterprises," he said.

With growing uncertainty surrounding the global economy and increased geopolitical risk, Johari believes that Malaysia can continue to be a vital trading partner for palm oil. 

"Our long established and well regulated industry is able to provide security of supply, excellent infrastructure along the entire supply chain as well as sustainability guarantees vis-a-vis the Malaysian Sustainable Palm Oil (MSPO) certification scheme.

"Due to our commitments to producing palm oil sustainably, we are focused on increasing production through unlocking higher yield instead of opening up new land to plant palm oil," he said. 

Besides higher yield translating to more competitive prices for consumers, the minister said higher production will also unlock many more opportunities for the market, such as green energy.

-- BERNAMA