20 & 21 April 2015 Monday & Tuesday The Magellan Sutera, Sutera Harbour Resort, Kota Kinabalu INDUSTRIALISING SABAH THROUGH BIOECONOMY Datuk Dr. Pang Teck Wai & Dr. Lee Ming Tong
PRESENTATION OUTLINE Introduction Sabah Economic Development Agenda Bio-resources in Sabah for Economic Development POIC Lahad Datu: Industrialisation for Bio-Based Economy Development Concluding Remarks
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)
GDP SABAH INDUSTRIAL DEVELOPMENT 2015 & 2035 40% 35% 30% 25% Sabah Malaysia 25% 35% 20% 15% 10% < 10% 5% 0% 2015 2035 Industrialising Sabah, a key development agenda of State government No economy can be developed by-passing industrialisaton
SABAH, MALAYSIA: RICH IN BIORESOURCES Vast Land Area (73,620 km 2 ) (Agriculture/Forestry) Long Coastline (1,743 km) (Aquaculture) Abundant Bio-feedstock Development of Bioeconomy through Industrial Biotechnology
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.) Palm Oil Refineries (No.) Palm Kernel Crushers (No.) 127 (28.9%) 439 12 (22.2%) 54 13 (29.5%) 44 Oleochemical Plants 0 (0%) 17 Crude Palm Oil Production (Million Tonnes) Crude Palm Kernel Oil Production (Mil. Tonnes) Potential palm-based biomass (Million Dry Tonnes) 6.05 (30.8%) 19.67 0.627 (27.5%) 2.28 28 (35%) 80 * Figure in parenthesis denote % national total Source: Malaysian Palm Oil Board (MPOB) Website, 2015 Statistics
BASIC RAW MATERIALS FROM OIL PALM TREE Palm Oil Tree Fronds Fresh Fruit Bunches Trunks Milling Process Biomass Palm Kernel Oil Crude Palm Oil Empty Fruit Bunches (EFB) Palm Kernel Shells (PKS) Mesocarp Fiber (MF) Palm Oil Mill Effluent (POME)
OIL PALM BIOMASS RESOURCES IN SABAH Biomass Type Mil. Dry Tonnes/Year Oil Palm Fronds 13.8 17.3 Oil Palm Trunks 4.2 5.3 Empty Fruit Brunches 3.0 2.5 Mesocarp Fibres 2.1 2.6 Palm Kernel Shells 1.2 1.5 Palm Oil Mill Effluent 0.6 0.8 TOTAL : 24.9 30.0
VALUE ADDING OPPORTUNITIES IN PALM-BASED BIOMASS DOWNSTREAM INDUSTRIES Feedstocks Currently Underutilised Oil Palm Fronds Downstream Opportunities 16.4 million dry tonnes Oil Palm Trunks Bio-Pellets Bio-Fuels Furniture from Oil Palm Lumber Bio-Ethanol Wood Plastic Composite Bio-Based Chemicals Plywood Current Focus at POIC Lahad Datu: Bio-refinery Bio-fuels 4.5 million dry tonnes Empty Fruit Bunches Particle Board / Molded Particle Board MDF Pulp & paper Finished Paper Products Bio-chemicals Bio-pellets 2.3 million dry tonnes Compost/fertilizer Fibre Animal Feed from Oil Palm Fronds
VALUE ADDING OPPORTUNITIES IN PALM-BASED BIOMASS DOWNSTREAM INDUSTRIES Products Currently Exported Downstream Opportunities Crude Palm Oil Refined Palm Oil Palm Olein Palm Stearin Refined Palm Kernel Oil Crude Palm Kernel Oil Palm Kernel Olein Palm Kernel Stearing FOODS PHYTONUTRIENTS OLEO-CHEMICALS BIO-REFINERY Cooking Oil Carotenes Methyl Ester Bio-chemicals Shortening Tocols (Vitamin E) Personal Care (petroleum Margarine Co-enzyme Q 10 Products substitutes) Vanaspati Squalene Cosmetics Confectionary Phytostrols Plastics Bakery Fats Lecithin Textile Processing Ice cream Metal Processing Cocoa butter Lubricants alternatives Emulsifiers Specialty fats Soap Noodles Degreasing Confectionary fats Compound Coffee Whitener/ Protective Creamer Coatings Filled Milk Explosives
VALUE ADDITION TO PALM-BASED BIOMASS PRODUCTS Bio-chemicals Bio-ethanol Wood products Pellets Bio-energy Animal feed fertilizer 0 500 1000 1500 2000 2500 3000 3500 4000 Source: Agensi Inovasi Malaysia (AIM), 2013. Value (RM/tonne dry biomass)
VALUE ADDITION TO PALM OIL INDUSTRY RM / MT 11,000 15,000 5,000 8,000 3,500 5,000 500 2,300 Source : Malaysian Biotechnology Corporation 2014
POTENTIAL IMPACT OF PALM BASED BIOCHEMICAL INDUSTRIES INVESTMENT ON SABAH ECONOMY 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 At 1% contribution to investment share FDI = RM2 billion per year: sufficient to effect industrial shift Sabah s economy
COASTAL BIORESOURCES IN SABAH 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 & Fisheries Department Sabah
POIC LAHAD DATU: STRATEGIC LOCATED WITH INSTALLED INFRASTRUCTURE TO ACCELERATE THE AQUACULTURE INDUSTRIAL DEVELOPMENT IN LAHAD DATU
POIC LAHAD DATU, SABAH 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: LOCATED AT THE CENTRE OF OIL PALM GROWING BELT IN 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
NATURAL DEEP SEA PORT & LARGE INDUSTRIAL LAND BANK PHASE 2 PHASE 1 PHASE 3 Deep & sheltered harbour ~ depth up to over 20-metres 20,000 acres of land bank along the coast line
PORT & INDUSTRIAL INFRASTRUCTURE AT POIC LAHAD DATU Piperacks Liquid Bulk Terminal Interchange Dry Bulk Terminal Electricity Container Terminal Ready by 2017 Water Bulking Facilities
POIC LAHAD DATU INDUSTRIALISING SABAH THROUGH INDUSTRIAL CLUSTERING CONCEPT CPO MILLS PALM OIL REFINERIES FOOD BASED INDUSTRY HOTEL & HOSPITALITY NUTRA- CEUTICAL INDUSTRY PORT HANDLERS /OPERATORS BULKERS FINANCIAL INSTITUTIONS LAND DEVELOPERS EDUCATIONAL INSTITUTIONS PORT & LOGISTICS CLUSTER SMI CLUSTER OIL PALM PLANTATIONS FERTILIZERS BIO REFINERY Oil Palm Industrial Cluster, Aquaculture Industrial Cluster and Other Clusters OIL PALM INDUSTRIAL CLUSTER BIOPELLET INDUSTRY BUILDING MATERIALS & CONSTRUCTION OLEO- CHEMICALS INDUSTRY BIOFUELS INDUSTRY WAREHOUSES PACKAGING TECHNOLOGY PROVIDERS TRANSPORTATION COMPANIES MACHINERY EQUIPMENT COMPANIES REAL ESTATE COMPANIES HALAL PRODUCT MANUFACTURERS RESEARCH INSTITUTES GOVERNMENT & RELATED AGENCIES ENERGY SUPPLIERS OIL & GAS CLUSTER AQUA/AGRO INDUSTRIAL CLUSTER HALAL CLUSTER BIO- TECHNOLOGY CLUSTER
AQUACULTURE INDUSTRIAL CLUSTER AQUA BROOD STOCKS AND HATCHERIES FRESH SEAFOOD INDUSTRY AQUA FEED SUPPLIERS AQUA FACILITIES AND EQUIPMENT SUPPLIERS FISH CULTURE OTHER AQUA- CULTURE SEA CUCUMBER CULTURE AQUACULTURE PRODUCTION INDUSTRY MOLLUSCA CULTURE SEAWEED CULTURE CRUSTACEANS CULTURE AQUA-BASED HEALTH PRODUCT INDUSTRY PROCESSED SEAFOOD INDUSTRY AQUA-BASED COSMETIC PRODUCT INDUSTRY 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 Bio-refinery Phase 2 Phase 3A
POLICY SUPPORT: LEAP FROG THE BIO-BASED ECONOMY Needs: Basic infrastructural development E.g. of Specialty infrastructure: canning, cold storage, packing, processing, handling facilities
CONCLUDING REMARKS 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.
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