Malaysia oil palm growers to face competition from RI
Malaysia oil palm growers to face competition from RI
KUALA LUMPUR (Reuter): Malaysian oil palm growers need new strategies to retain their key role in the industry, where Indonesia is becoming an increasingly important player, a senior Malaysian palm oil official said.
"The Malaysian palm oil industry needs a shift in its strategy from one of expansion towards competitive orientation," said Yusof Basiron, director-general of the Palm Oil Research Institute of Malaysia (PORIM).
"This is due to the limited availability of land and labor for further expansion in oil palm cultivation and the increasing availability of other (foreign) palm oil producers," Yusof said at an economic conference.
Malaysia's palm oil sector had grown almost unabated in the last three decades to become the world's largest but the situation could change in the next 15 years, Yusof said.
"It is envisaged that around the year 2010, Indonesia will become the leading producer of palm oil in the world," he said, adding that abundant cheap labor and vast tracts of land were reasons for this.
Indonesia is expected to produce only 4.73 million tons of palm oil this year against Malaysia's 7.6 million tons, Yusof said.
But by the year 2010, Indonesia's output could rise to as much as 12.29 million tons compared to the 11.05 million tons expected from Malaysia, he said.
The Malaysian government has encouraged local oil palm growers and refiners to set up operations in Indonesia to keep their competitive edge. Among Malaysian companies which have ventured into Indonesia are Kumpulan Guthrie, Far East Bhd, Island and Peninsular Bhd, Tradewinds Bhd and Kuala Lumpur Kepong Bhd.
Yusof said that to be further competitive, Malaysian oil palm growers should maximize income from cultivation activities, exploit all potential value-added uses of palm oil and, if possible, waste nothing from the crop.
He said PORIM has introduced high-yielding plants and machines to reduce labor requirements, improve productivity and earnings and cut down on costs.
Ice-cream, non-dairy creamers, salad dressings, cheese, auto fuel and lubricants, glycerol, skin care products and inks are among more innovative uses of palm oil discovered in recent years, Yusof said.
He added that wood from palm oil trees were found to be a rich source of Vitamins A and E and could also be used for particle and medium-density fiber-board, wool, pulp, paper and carbon manufacturing.
"The industry has to develop new technologies or new uses for palm oil, which means expanding the edible and non-edible uses," he said.