KOTA KINABALU: Sabah is working towards the setting up of a satellite biomass collection centre to break the impasse in the biomass industry in the state, and attract huge investments.
The first in the world, the biomass collection centre was initiated by three companies — state-owned Palm Oil Industrial Cluster (POIC) Sabah Sdn Bhd, Bell Corp Sdn Bhd and My Clean Energy (MCE) Sdn Bhd.
The three joined in a partnership and inked a memorandum of understanding (MoU) at the Pan Pacific Sutera Habour on Tuesday, to pave the way for a biomass collection centre.
In the agreement, Bell Corp would provide a site near its oil palm mill, about 50km from Lahad Datu, for the gathering of biomass from other mills in the area.
MCE, with a long track record in biomass aggregation, would be responsible for long-term supply, while POIC would act as confidence provider in the arrangement as the buyer of the biomass.
The MoU was signed by Bell Corp chief executive officer (CEO) Puan Sri Dr Liana Low, POIC Sabah CEO Datuk Dr Pang Teck Wai and MCE chairman Jeffery Lu, witnessed by Deputy Chief Minister Datuk Seri Raymond Tan Shu Kiah.
Pang said the collection centre would, for the first time, clear hurdles on palm oil biomass prices and supply security. These are the two main factors hindering the takeoff of the billion-ringgit biomass downstream industry in Sabah.
“The biomass industry has hardly taken off in the state in spite of its great promise. This MoU contains solutions to some of the hurdles in developing the biomass sector.
“The strategy requires POIC to move into locations where palm oil mills are located, and we call this the POIC satellite biomass collection centres. In order for this to happen, we need to find mill owners to not only understand what we are trying to do, but who are willing to invest in a totally new idea,” he said.
Pang said it was also vital to secure empty fruit bunches (EFB) supply to attract investment. He said POIC was fortunate to have MCE on board in making large-scale supply of EFB to buyers.
“With these structures in place, we now think we have found a workable platform, much like a supermarket where biomass investors can come and buy EFB in small- and large-quantities at competitive prices.
“Because we are working on a supermarket platform, the supply of other biomass such as oil palm trunks and palm fronds would also be made available when there’s a demand,” he said.
Pang added that they already had investor interest, and some agreements would be finalised in the next few months to kick start work on the collection centres.
Meanwhile, Tan, who is also Industrial Development Minister, said he hoped the MoU, with a lifespan of six months, would not have to be renewed, but proceed to develop a full business agreement.
“Biomass is waste material from the plantation and the mills, but you don’t hear the word waste used these days. This collection will finally stabilise the price and ensure the long-term supply security of biomass.
“This security will hopefully enable the beginning of large-scale investments in the biomass industry in Sabah,” he said.