20 & 21 April 2015 Monday & Tuesday

The Magellan Sutera, Sutera Harbour Resort, Kota Kinabalu

Datuk Dr. Pang Teck Wai & Dr. Lee Ming Tong

“INDUSTRIALISING SABAH THROUGH BIOECONOMY”

Introduction

Sabah Economic Development Agenda

Bio-resources in Sabah for Economic Development

POIC Lahad Datu: Industrialisation for Bio-Based

Economy Development

Concluding Remarks

PRESENTATION OUTLINE

INTRODUCTION

Bio-based economy potential in Sabah

How to realise the bio-based economy in Sabah

SABAH ECONOMIC DEVELOPMENT STATUS (2014)

Economic Activities GDP Value

(RM’ Million) Percentage %

Agriculture 9,411 20.6

Mining & Quarrying 9,345 20.4

Manufacturing 3,605 7.9

Construction 1,107 2.4

Service 22,134 48.3

Import Duties 184 0.4

Total 45,791 100.0

Source: Department of Statistics Malaysia, Sabah (2014)

SABAH INDUSTRIAL DEVELOPMENT 2015 & 2035

• Industrialising Sabah, a key development agenda of State government

• No economy can be developed by-passing industrialisaton

Sabah

Malaysia

0%

5%

10%

15%

20%

25%

30%

35%

40%

2015 2035

GD

P

< 10%

25%

35%

SABAH, MALAYSIA: RICH IN BIORESOURCES

• Vast Land Area (73,620 km2)

(Agriculture/Forestry)

• Long Coastline (1,743 km)

(Aquaculture)

Development of Bioeconomy

through Industrial Biotechnology

Abundant Bio-feedstock

LAND USE IN SABAH (2014)

Land Use (000’ ha) %

National Forests & State Land 4,196 57.0

Plantation Forest 239 3.2

Oil Palm Plantations 1,522 21.7

Rubber Holdings 110 1.5

Rice Fields 38 0.5

Coconut Farms 17 0.2

Cocoa Holdings 5 0.1

Other Crops 27 0.4

Other Land Uses 1208 16.4

Total 7,362 100.0

Source: Department of Statistics Malaysia, Sabah (2014)

OIL PALM INDUSTRY IN SABAH, MALAYSIA (2014)

Sabah Malaysia

Oil Palm Planted Area

(Million Ha) 1.51 (28 %)* 5.39

Palm Oil Mill

(No.) 127 (28.9%) 439

Palm Oil Refineries

(No.) 12 (22.2%) 54

Palm Kernel Crushers

(No.) 13 (29.5%) 44

Oleochemical Plants 0 (0%) 17

Crude Palm Oil Production

(Million Tonnes) 6.05 (30.8%) 19.67

Crude Palm Kernel Oil

Production (Mil. Tonnes) 0.627 (27.5%) 2.28

Potential palm-based biomass

(Million Dry Tonnes) 28 (35%) 80

* Figure in parenthesis denote % national total

Source: Malaysian Palm Oil Board (MPOB) Website, 2015 Statistics

Palm Oil Tree

Crude Palm Oil Palm Kernel Oil

Milling Process

Trunks

Fronds

Fresh Fruit

Bunches

Biomass

Mesocarp Fiber

(MF)

Palm Kernel

Shells (PKS) Empty Fruit

Bunches (EFB)

Palm Oil Mill

Effluent

(POME)

BASIC RAW MATERIALS FROM OIL PALM TREE

OIL PALM BIOMASS RESOURCES IN SABAH

Biomass Type

Oil Palm Fronds

Oil Palm Trunks

Empty Fruit Brunches

Mesocarp Fibres

Palm Kernel Shells

Palm Oil Mill Effluent

Mil. Dry Tonnes/Year

13.8 – 17.3

4.2 – 5.3

3.0 – 2.5

2.1 – 2.6

1.2 – 1.5

0.6 – 0.8

TOTAL : 24.9 – 30.0

VALUE ADDING OPPORTUNITIES IN PALM-BASED

BIOMASS DOWNSTREAM INDUSTRIES

Feedstocks Currently

Underutilised

Oil Palm Fronds

16.4 million dry tonnes

Oil Palm Trunks

4.5 million dry tonnes

Empty Fruit

Bunches

Downstream Opportunities

Bio-Pellets Bio-Ethanol Bio-Based

Chemicals

Bio-Fuels

Wood Plastic

Composite Plywood Furniture from Oil Palm Lumber

Pulp & paper MDF Particle Board / Molded

Particle Board Finished Paper

Products

Animal Feed from Oil Palm Fronds Fibre Compost/fertilizer

Current Focus at

POIC Lahad

Datu:

• Bio-refinery

• Bio-fuels

• Bio-chemicals

• Bio-pellets

2.3 million dry tonnes

Products Currently Exported Downstream Opportunities

Cooking Oil

Shortening

Margarine

Vanaspati

Confectionary

Bakery Fats

Ice cream

Cocoa butter

alternatives

Specialty fats

Noodles

Confectionary fats

Coffee Whitener/

Creamer

Filled Milk

PHYTONUTRIENTS

Carotenes

Tocols (Vitamin E)

Co-enzyme Q10

Squalene

Phytostrols

Lecithin

• Crude Palm Oil

• Refined Palm Oil

• Palm Olein

• Palm Stearin

• Refined Palm

Kernel Oil

• Crude Palm

Kernel Oil

• Palm Kernel Olein

• Palm Kernel

Stearing

OLEO-CHEMICALS

Methyl Ester

Personal Care

Products

Cosmetics

Plastics

Textile Processing

Metal Processing

Lubricants

Emulsifiers

Soap

Degreasing

Compound

Protective

Coatings

Explosives

VALUE ADDING OPPORTUNITIES IN PALM-BASED

BIOMASS DOWNSTREAM INDUSTRIES

BIO-REFINERY

Bio-chemicals

(petroleum

substitutes)

FOODS PHYTONUTRIENTS OLEO-CHEMICALS BIO-REFINERY

VALUE ADDITION TO PALM-BASED BIOMASS PRODUCTS

0 500 1000 1500 2000 2500 3000 3500 4000

fertilizer

Animal feed

Bio-energy

Pellets

Wood products

Bio-ethanol

Bio-chemicals

Value (RM/tonne dry biomass)

Source: Agensi Inovasi Malaysia (AIM), 2013.

VALUE ADDITION TO PALM OIL INDUSTRY

RM / MT

500

2,300

3,500 – 5,000

5,000 – 8,000

11,000 – 15,000

Source : Malaysian Biotechnology Corporation 2014

Feedstock source

Total quantity

(Mil. tonnes per

year)

Max unit value

(RM/tonne per

year)

Total value

(RM billion per

year)

Palm-based

biomass 30 3,400 102 billion

Palm oil 6.5 15,000 97.5 billion

POTENTIAL IMPACT OF PALM BASED BIOCHEMICAL

INDUSTRIES INVESTMENT ON SABAH ECONOMY

• At 1% contribution to investment share

FDI = RM2 billion per year: sufficient to effect industrial shift

Sabah’s economy

• Total coastal length in Sabah: 1,743 km (longest in Malaysia)

• Lahad Datu marine fishing area: 3,700 sq. km.

• Abundant natural fishing reefs

• Existing fishing villages and aquaculture investors

• Proposed location of National Aquaculture

• Key Strategic Partners : Biotech Corporation Malaysia &

COASTAL BIORESOURCES IN SABAH

Fisheries Department Sabah

POIC LAHAD DATU: STRATEGIC LOCATED WITH INSTALLED INFRASTRUCTURE TO

ACCELERATE THE AQUACULTURE INDUSTRIAL DEVELOPMENT IN LAHAD DATU

Background:

• Set-up in January 2005 under POIC Sabah Sdn Bhd.

• Wholly owned by Sabah Government of Sabah under the purview of Ministry of

Industrial Development (MID).

• As the first comprehensive developed (infrastructure) palm oil industrial cluster in

the world.

• Project development : 4,400 acres of integrated Industrial complex designed to

cater for light, medium and heavy industries.

Objectives:

• To value add to palm oil and palm biomass.

• Development of related and other industries.

• Creating job and investment opportunities.

POIC LAHAD DATU, SABAH

Availability of raw materials:

At the vicinity of :

• 1.51 million hectares oil palm

plantations

• 124 crude palm oil mills

• 14 palm oil refineries

Easy access to :

• 6.05 million tonnes of Crude Palm Oil

• 28 million dry tonnes of palm-based

biomass for downstream activities

POIC LAHAD DATU: LOCATED AT THE CENTRE OF OIL PALM

GROWING BELT IN SABAH

Deep & sheltered harbour ~ depth up to over 20-metres

20,000 acres of land bank along the coast line

PHASE 1

PHASE 2

PHASE 3

NATURAL DEEP SEA PORT & LARGE INDUSTRIAL LAND BANK

PORT & INDUSTRIAL INFRASTRUCTURE AT POIC LAHAD DATU

Liquid Bulk Terminal

Dry Bulk Terminal

Container Terminal Ready by 2017

Bulking Facilities

Piperacks

Interchange

Electricity

Water

BIO-

TECHNOLOGY

CLUSTER

AQUA/AGRO

INDUSTRIAL

CLUSTER

PORT &

LOGISTICS

CLUSTER

HALAL

CLUSTER

SMI

CLUSTER

BIO

REFINERY

FINANCIAL INSTITUTIONS

LAND DEVELOPERS

BULKERS

TECHNOLOGY PROVIDERS

TRANSPORTATION COMPANIES

MACHINERY EQUIPMENT COMPANIES

REAL ESTATE COMPANIES

WAREHOUSES

RESEARCH INSTITUTES

GOVERNMENT & RELATED AGENCIES

ENERGY SUPPLIERS

HALAL PRODUCT MANUFACTURERS

PACKAGING

PORT HANDLERS

/OPERATORS

OIL PALM

PLANTATIONS

OLEO-

CHEMICALS

INDUSTRY

BIOFUELS

INDUSTRY

PALM OIL

REFINERIES

BIOPELLET

INDUSTRY

FERTILIZERS

EDUCATIONAL INSTITUTIONS

CPO

MILLS

FOOD

BASED

INDUSTRY NUTRA-

CEUTICAL

INDUSTRY

Oil Palm Industrial Cluster,

Aquaculture Industrial

Cluster and Other Clusters

OIL PALM

INDUSTRIAL

CLUSTER

BUILDING MATERIALS &

CONSTRUCTION

HOTEL & HOSPITALITY

OIL & GAS

CLUSTER

POIC LAHAD DATU INDUSTRIALISING SABAH THROUGH

INDUSTRIAL CLUSTERING CONCEPT

AQUACULTURE INDUSTRIAL CLUSTER

AQUACULTURE

PRODUCTION

INDUSTRY

FISH

CULTURE

SEA

CUCUMBER

CULTURE

SEAWEED

CULTURE

CRUSTACEANS

CULTURE

MOLLUSCA

CULTURE

OTHER

AQUA-

CULTURE

AQUA-BASED

HEALTH

PRODUCT

INDUSTRY

AQUA-BASED

COSMETIC

PRODUCT

INDUSTRY

PROCESSED

SEAFOOD

INDUSTRY

FRESH

SEAFOOD

INDUSTRY

AQUA BROOD STOCKS AND HATCHERIES

AQUA FEED SUPPLIERS

AQUA FACILITIES AND EQUIPMENT SUPPLIERS

WATER TREATMENT, SUPPLY & SERVICES

AQUA-HEALTH TREATMENTS,

SUPPLY &SERVICES

R&D INSTITUTION

AQUACULTURE TECHNOLOGY

PROVIDERS

PROCESSING FACILITIES

FINANCIAL INSTITUTIONS

COLD STORAGE & PACKAGING

TRANSPORTATION COMPANIES

GOVERNMENT & RELATED AGENCIES

POIC LAHAD DATU: STRATEGY TO DEVELOP BIO-BASED

ECONOMY IN SABAH

BIO-BASED ECONOMY

Oil Palm Cluster Halal Cluster Biotechnology Cluster

Palm Oil Palm Biomass Oil Palm Based

• Foods

• Phytonutrients

• Oleo-chemicals

• Biorefininery

• Fertilisers

• Animal Feeds

• Bio-energy

• Wood Products

• Bio-ethanol

• Bio-chemical

• Foods

• Phytonutrients

• Aquaculture

• Fish

• Others

POIC LAHAD DATU: LAND DEVELOPMENT

MASTERPLAN

Phase 2 Phase 3A

Bio-refinery

Needs:

• Basic infrastructural development

• E.g. of Specialty infrastructure: canning, cold

storage, packing, processing, handling facilities

POLICY SUPPORT: LEAP FROG THE

BIO-BASED ECONOMY

• Sabah is rich in land (oil palm) and sea bio-resources for bio-based economy development amounting to as high as several hundred billion Ringgit Malaysia per year.

• POIC Lahad Datu’s industrialization model is tailored made to realise the bio-based economy development in Sabah.

• Developing bio-based economy is a necessary condition towards transforming Sabah into developed economy.

• FDI is critical in developing Sabah’s bio-based economy.

• Appropriate policy support to accelerate the potential of bio-based economy development in Sabah.

CONCLUDING REMARKS

www.poic.com.my