Joint Paper : Datuk Dr. Pang Teck Wai (CEO) & Rose Pun POIC Sabah Sdn Bhd 9 Sept 2011

Transcription

1 Joint Paper : Datuk Dr. Pang Teck Wai (CEO) & Rose Pun POIC Sabah Sdn Bhd 9 Sept 2011 Copyright POIC,

2 Presentation Outline The Industrial Cluster Concept The benefits of industrial clustering Key success factors for industrial clusters Malaysian Experience in Palm Oil Industrial Cluster (POIC Lahad Datu Experience) Suitability of oil palm for industrial clustering Palm Oil Industrial Cluster Concept Ingredients in creating Palm Oil Industrial Cluster Progress and status of development Copyright Copyright POIC, POIC,

3 The Industrial Cluster Concept Michael Porter, Harvard Business School A cluster is a geographically proximate group of interconnected companies and associated institutions in a particular field, linked by commonalities and complementarities (1998) Copyright POIC,

4 What are the benefits of clustering? Creates agglomeration economies reduced transportation costs ready access to labor force with specialised skills availability of specialised inputs and services lowered transaction costs (including search & information costs, bargaining & decision costs, policing & enforcement costs) spur competition - encourages rapid information, knowledge, and technology transfer lead to growth of new businesses Promotes social infrastructure/networking facilitates technology and knowledge diffusion; fosters mutual understanding & trust (cuts costs of identifying, evaluating, accessing, exchanging products) Encourages networking among firms Permits focused deployment of public resources Copyright Copyright POIC, POIC,

5 However, there are challenges Targeting specific industries may not be easy Can take a long time to realise benefits May be a long and costly process Supportive institutions may be difficult to establish Copyright Copyright POIC, POIC,

6 Key Success Factors for Industrial Clusters Supportive public sector policies Industry Driven Entrepreneurial mindset Effective networking Strong research base Skilled workforce Balanced infrastructure Comprehensive support services Ready access to capital Copyright POIC, 2008

7 Competitive advantages of oil palm for industrial Cluster Copyright POIC, 2008

8 Products from the Oil Based Products Currently Exported Crude Palm Oil Refined Palm Oil Food Based Cooking Oil Shortening Margarine Vanaspati Confectionary Bakery fats Ice cream Cocoa butter alternatives Palm Olein Palm Stearin Value Adding Opportunities Phytonutrients Carotenes Tocols (Vitamin E) Co-enzyme Q 10 Squalene Phytostrols Lecithin Crude Palm Kernel Oil Refined Palm Kernel Oil Palm Kernel Olein Palm Kernel Stearin Oleochemicals Personal care products Cosmetics Plastics Textile processing Metal processing Lubricants Emulsifiers Soap Degreasers Protective coatings Explosives Copyright POIC,

9 Products Currently Underutilised Residues from Oil Palm Downstream Opportunities 3.5 million trees Fibre Pulp & paper MDF Pellets Oil Palm Trunks Briquette 6 million tonnes Value Adding Opportunities Finished Paper Product Furniture from Oil Palm Lumber Empty Fruit Bunches Wood Plastic Composite Particle Board Moulded Particle Board 19 million tonnes Oil Palm Fronds Compost Plywood Animal Feed from Oil Palm Fronds Copyright POIC, 2008

10 The Palm Oil Industrial Cluster Concept (POIC) Copyright Copyright POIC, POIC,

11 Government & Related Agencies Energy Suppliers Educational Institutions Port Handlers/ Operators Research Institutes Warehouses Commercial Development CPO Mills Fertiliser Companies Oil Palm Plantations Oleochemicals Companies Biomass Companies Refineries Biofuel Producers Supporting Industries Financial Institutions Bulkers Machinery/ Equipment Companies Transportation Companies Technology Providers Residential Copyright POIC,

12 Ingredients necessary for palm oil industrial cluster success ~ POIC Lahad Datu Experience Copyright POIC, 2008

13 POIC- POIC- Critical Critical Strengths Strengths Opportunities 1. State-backed: Owned and supported by the State Gov. of Sabah. Strong Federal and State Gov. financial support to develop basic infrastructures ~ port, electricity, industrial land 2. Raw materials: Lots of PO - very limited value adding 3. Strategic project location : Centre of PO belt, deep & sheltered harbour (20m draft), 2 km from town centre, 1 km from the existing Lahad Datu Port 4. Market access: Strategic location South East Asia Market 5. Strategic leverage: Proximity to plentiful supply resources and strategically located at the confluence of shipping lines with easy access to global markets 6. Infrastructure support: Competitive infrastructure support & speed of completion 7. Investment theme: Refinery, fertilizer, oleochemical, renewable energy biomass and commodities being the sought-after thematic focus 8. Presence of major industry player: Able to form a cluster - gives confidence to new investor 9. Relaxation of licensing criteria: E.g: approval of refinery license to locate as many as possible in order to form a cluster strategy 10. Technology driven: Commercialization of Malaysia s R&D technologies in PO 3 Statebacked Project Location Knowledge & Technology 2 Raw materials Competitive infra Industry player Licensing criteria Strategic leverage Market Access Good Investment Theme Copyright POIC, 2008 Copyright POIC, 2011

14 Putting Putting the the pieces pieces together together Opportunities Raw Materials State - backed Strategic leverage Competitive infra Licensing criteria Knowledge & Technology Project Location Good Investment Theme Market access Industry player Copyright POIC Sabah Sdn Bhd Copyright POIC,

15 Major World Producers of Palm Oil (2010) (Million tonnes) Total global CPO production: million tonnes Sabah Indonesia Malaysia Others Thailand Nigeria Colombia Ecuador PNG Cote d Ivoire Source: MPOB, 2011 Copyright POIC, 2008

16 Snapshot of the Palm Oil Industry in Sabah (2010) Sabah Malaysia (total) Planted area (mil. ha) 1.40 (30%)* 4.85 Mills: Number Capacity (mil. tonnes FFB/yr) 124 (29%)* 31.1 (32%)* CPO Production (mil. tonnes) 5.32 (31%)* Relative Productivity Sabah Malaysia (average) FFB Yield (tonnes/ha/yr) CPO Yield (tonnes/ha/yr) * Percentages of country s total Source: MPOB, 2011 Copyright POIC, 2008

17 Oil Palm Planted Areas Kota Kinabalu Sabah Lahad Datu Copyright POIC, 2008

18 (About 1.24 million ha) Copyright POIC,

19 Copyright POIC, 2008 Copyright POIC, 2011

20 Medan Dumai Kota Kinabalu. Bitung Copyright POIC, 2008

21 Medan Dumai Kota Kinabalu. Bitung Copyright POIC, 2008

22 Location Strengths ~ presence of existing cluster N Refineries Leluasa Untung 1400 t/d Felda 1000 t/d LDEO 2500 t/d Kwantas 2200 t/d Copyright POIC, 2008

23 Infrastructure ~ speed of completion & delivery Phase 1 & 2 Phase 3A Earthworks Completed Earthworks Completed Roads & Drain Water Sewerage Telecommunication Electricity Liquid Jetty - Ph 1& 2 Completed Completed Completed Completed Completed Completed Roads March 2012 Drains Dec 2011 Water Oct 2011 Sewerage Sept 2011 Electricity Sept 2011 Bulk Fertilizer Terminal May 2012 Pipe Rack By end of 2011 Copyright POIC Sabah Sdn Bhd Copyright POIC, 2008

24 Infrastructure Support Designed to berth 4 vessels at one time 2 outer berths can accommodate 2 ships up to 30,000DWT. The outer berths draft is about 12m 2 inner berths can accommodate ships up to 10,000DWT. The inner berths draft is about 10m 2 high speed gantry cranes & integrated conveyer belt system will be installed to unload the bulk cargo at the western side of the jetty The conveyer belt system with the gantry crane is designed to handle bulk cargo at the speed of 1,000 tones per hour. Bulk Fertilizer Terminal (Under Construction) Inner Berth 60M 70M shoreline 5 loading platforms, linear berthing length of 600m with 10m to 12m draft Up to 20,000 dwt barge/vessel. Liquid Jetty Outer Berth 500M from the shoreline 2 berths, outer and inner 20M draft Up to 100,000 dwt Copyright POIC Sabah Sdn Bhd Copyright POIC,

25 Our progress and where we are today 1. Land sales 2. Ranged of industries 3. Companies starting up 4. Future prospect Copyright POIC,

26 1. Land Sales as at August 2011 No. Acreage Allocated Purchase/Lease Price (RM/mil) Employment Created Investment Value (RM/mil) Concluded Sales , Lease Agreement Sales in Progress , Total ,903 3, Copyright POIC,

27 Aerial View of Phase 1 & 2 Copyright POIC Sabah Sdn Bhd Copyright POIC,

28 Status of Sales as at August 2011 Copyright POIC,

29 Fertilizers Cluster Agri Borneo Fertilizers Sdn Bhd Behn Meyer & Co (M) Sdn Bhd CCM Agriculture (Sabah) Sdn Bhd Taiko Fertilizer Sdn Bhd Felda Agricultural Services Sdn Bhd Union Harvest (East Malaysia) Sdn Bhd Mine Chem (Sabah) Sdn Bhd Sabah Softwood Hybrid Fertilizer Sdn Bhd Excelwin Biotech Sdn Bhd Copyright POIC, 2008

30 Refineries Cluster Lahad Datu Edible Oils DXN Oleochemicals Sdn Bhd Zurex Corporation Sdn Bhd QL Bioenergy Sdn Bhd Sawit Raya Sdn Bhd Mewah Oils Sabah Sdn Bhd Southern Acids (M) Berhad Reliance Synergy Sdn Bhd Global Biodiesel Sdn Bhd Copyright POIC, 2008

31 2. Confirmed investor s and ranged of industries EXISTING CATEGORY OF INDUSTRIES NO. OF INDUSTRY 1. Fertilizers 9 2. Refinery 8 3. Storage/Warehousing & Logistic 8 4. Biodiesel 5 5. Supporting Industry/ Palm Oil Related Activities 8 6. Palm Kernel Crushing (1) / Bio Palm Kernel Expeller (1)/ Upstream Palm Kernel Extraction Plant (1) 7. Process & Packaging /Consumer Packaging Plant 4 8. Small Renewable Energy Power. Programme (SREP) 2 9. Commercial Development/Puspakom Facility Oleochemical Spent Bleached Earth/Solvent Extraction Plant Bulking Facility 1 3 Total = 50 Copyright POIC,

32 Facilities completed Copyright POIC,

33 SPC Biodiesel Sdn Bhd (Australian) CCM Agriculture (Sabah) Sdn Bhd Global Bio-Diesel Sdn Bhd (Korean) Behn Meyer & Co (M) Sdn Bhd Asia Depot Sdn Bhd Zurex Corporation Sdn Bhd Copyright POIC,

34 Anjur Handal Sdn Bhd Blossom Bio Energy Sdn Bhd (Japanese JV) Choy Huat Construction Sdn Bhd Copyright POIC,

35 Facilities under constructions Copyright POIC,

36 Eco Biomass Energy Sdn Bhd CHP Plant Project (SREPP) (Target completion : August 2012) Mewah Oil Sabah Sdn Bhd Refinery (Target completion : 1 st Quarter 2012) Taiko Fertiliser Sdn Bhd Fertilizer (Target completion : End of 2012) QL Bioenergy Sdn Bhd Refinery, Palm Kernel Crushing (Target completion : End of 2012) Copyright POIC Sabah Sdn Bhd Copyright POIC, 2008

37 Felda Agricultural Services Fertilizer (Target completion : End of 2012) Bristeel Properties Sdn Bhd Local Commercial Development & Warehouses [Port City] (Target completion : 2012) Syarikat Tuah Jaya Transportation & Forwarding Facility (Target completion : End of 2011) Copyright POIC Sabah Sdn Bhd Copyright POIC, 2008

38 POIC Lahad Datu & FutureProspect Copyright POIC,

39 Land banks for future expansions Copyright POIC,

40 POIC Phase 3A Copyright POIC Sabah Sdn Bhd Copyright POIC,

41 Industries Allocation for Phase 3A Copyright POIC,

42 Summary A cluster is a geographic concentration of interdependent firms in related industries supported by With proper planning and implementation, industrial clusters can bring significant economic, social and environmental benefits The oil palm is particularly suitable for industrial clustering Several oil palm industrial clusters in various developmental stages Copyright POIC,

43 Copyright POIC, 2008 Copyright POIC, 2011