Sabah committed to future-proofing palm oil industry

KOTA KINABALU (Oct 28): The Sabah government is committed to future-proofing the palm oil
industry, which is the state’s most significant export commodity, contributing 22 per cent or RM6.22 billion to revenue from 2018 to 2023.

Chief Minister Datuk Seri Panglima Hajiji Noor said Sabah, as a powerhouse in Malaysia’s palm oil industry, is aware of the challenges to ensure the industry remains relevant in the future.

“Hence, the government needs to be ready and must introduce innovative approaches to help the industry achieve and meet the national and international certification requirements,” he said at the World Palm Oil Conference 2024 – “Future-Proof The Palm Oil Industry – Enhancing Sustainability, Innovation and Growth” here today.

Deputy Chief Minister Datuk Seri Panglima Dr Jefffrey Kitingan, who is Agriculture, Fisheries and Food Industry Minister, delivered the Chief Minister’s speech.

“As we look to the future, innovation and sustainability must remain at the heart of our efforts. Sabah is already leveraging technology to boost productivity and reduce the environmental footprint of palm oil production,” he said.

Hajiji said precision agriculture, mechanisation, and advanced pest management techniques were among the innovations being implemented to enhance yields and sustainability.

He said in 2023, Sabah produced 4.5 million tonnes of crude palm oil (CPO) and remained the largest CPO producer in the country due to superior fruit yields and oil extraction rates.

“We operate 128 mills across the state, with a capacity to process up to 34.7 million tonnes of fresh fruit bunches (FFB) annually. Our oil extraction rate (OER) of 20.4 per cent is the highest in the country.

“Our industrial hubs are critical to sustaining this growth. The Sabah government owns the Lahad Datu Palm Oil Industrial Cluster (POIC) on the east coast of Sabah, which covers 4,400 acres. It supports light, medium and heavy industries.

“The POIC has specialised ports for bulk cargo, liquid cargo and containers. These ports are located in a naturally deep harbour, capable of accommodating large cargo vessels,” he said.

In addition, the Chief Minister said the 2,810-acre Sawit POIC in Sandakan, also on Sabah’s east coast under Sawit Kinabalu Sdn Bhd management, was designed to encourage investments in downstream palm oil manufacturing.

“Both POICs are strategically located near oil palm estates and resource-rich areas in the BIMP-EAGA (Brunei-Indonesia-Malaysia-Philippines East Asean Growth Area). These hubs are key infrastructure for industrial development on Sabah’s east coast,” he said.

Hajiji added Sabah’s palm oil industry has a pivotal role in reducing greenhouse gas emissions and supporting Malaysia’s goal of achieving net-zero emissions by 2050 in line with the National Energy Transition Roadmap.

Sabah contributed 25.75 million tonnes of biomass from palm oil milling and plantation activities alone, providing a tremendous opportunity for renewable energy and innovation last year.

“We introduced the Oil Palm Biomass Industry Policy earlier this year that will soon regulate biomass export and production, ensuring that Sabah benefits from this valuable resource.

“We are confident that with strategic collaboration between the public and private sectors, we can further position Sabah as a global leader in sustainable palm oil production,” he said.

The Chief Minister also called upon all stakeholders, investors, businesses, and policymakers to join the state government in making Sabah the global hub for sustainable palm oil production.

“By investing in downstream processing, adopting advanced technologies, and upholding the highest sustainability standards, we can ensure that this vital industry continues to thrive while contributing to a greener, more prosperous future for all,” he said.