RI, Malaysia plan more palm oil-based products<\/p>\n
KUCHING, Malaysia (Reuter): Malaysia and Indonesia plan to
\nexpand their oleochemical and downstream palm oil industries in a
\nbig way to retain their share of the global vegetable oils
\nmarket, officials said.<\/p>\n
The two oil palm growers, faced with increasing rivalry from
\nother edible oils, are working on various strategies to produce
\nmore palm oil-based goods to boost foreign exchange earnings,
\nsaid officials from the palm oil research institutes of both
\ncountries.<\/p>\n
\"We're suggesting that the export sector of palm oil be
\noptimized by going down to product development such as
\ncosmetics,\" Mohamed Arif Simeh, senior executive of the Palm Oil
\nResearch Institute of Malaysia (PORIM), told Reuter.<\/p>\n
Arif, who spoke on the prospects of the Malaysian palm oil
\nindustry at an Asian vegetable oils seminar in east Malaysia's
\nSarawak state, said in an interview that PORIM has recommended
\nincentives to encourage more downstream palm industries under a
\nnew five-year industrial masterplan for Malaysia to be unveiled
\non May 14.<\/p>\n
\"The government will decide on what exactly the incentives
\nwill be,\" Arif said. \"There are viable products which we can make
\nby deepening the oleochemicals industry, instead of letting the
\nJapanese and Europeans take advantage of these.\"<\/p>\n
Arif said what PORIM was suggesting was basically a reversion
\nto the mid-1970s strategy, where Malaysia banned exports of crude
\npalm oil, forcing all exports of the commodity to be in the form
\nof refined oil or finished goods.<\/p>\n
\"This may have caused the West to be unhappy but we had some
\nvalue-added material to our palm oil exports,\" he said.<\/p>\n
Although Malaysia produced 7.9 million tons of palm oil last
\nyear to retain its position as the world largest grower of the
\ncrop, its future in the business could not be guaranteed due to
\nland and labor constraints, said Arif.<\/p>\n
\"Historically, although production in 1995 was about six times
\nthat of 1975 and export earnings higher by seven times, the
\nannual growth in export volumes have declined from an impressive
\n57.2 percent in the 1976-80 period to 2.9 percent currently,\" he
\nsaid.<\/p>\n
Arif said the oleochemical sector in Malaysia was relatively
\nsmall, with marginal foreign investment.<\/p>\n
Factories<\/p>\n
There are now 11 factories with a combined annual capacity of
\none million tons, compared to five companies with a capacity of
\n150,000 tons, when the sector began in the 1980s, he said.<\/p>\n
\"There is little product diversity and neither are there
\nefforts to invest in new product development,\" he said.<\/p>\n
\"The basic oleochemicals are being exported to developed
\nmarkets for conversion into higher value-added products such as
\ndetergents, toiletries, cosmetics, textiles, plastics, rubber
\nproducts and pharmaceuticals.\"<\/p>\n
Puryobo Guritno, director of Indonesia's Palm Oil Research
\nInstitute, said the country's oleochemicals industry was moving
\nslowly, with only six out 15 licensed companies operating due to
\na lack of technical support and expertise.<\/p>\n
\"We are now inviting foreign joint-venture partners,\" he told
\nReuter.<\/p>\n
He said palm oil producers could no longer depend on export of
\nraw material such as crude palm oil and palm kernel oil \"as we
\nare competing with 16 other vegetable oils\".<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ri-malaysia-plan-more-palm-oil-based-products-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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