MOU paves way for first biomass collection centre
KOTA KINABALU: Three parties came together here yesterday in a partnership that promises to break the impasse on biomass industry in Sabah and attract huge investments.
In a memorandum of understanding (MOU) signed yesterday, POIC Trading Sdn Bhd, BELL Corporation Sdn Bhd and My Clean Energy Sdn Bhd agree to move towards setting up a satellite biomass collection centre.
Datuk Dr Pang Teck Wai, the CEO of state-owned POIC Sabah Sdn Bhd, said the collection centre will for the first time clear hurdles on oil palm biomass price and supply security, the two major factors hindering the take-off of the billionringgit biomass downstream industry in Sabah.
BELL Corporation, which on Monday signed a collaboration agreement on renewable energy with Universiti Tenaga National, will 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, a local company with a long track record in biomass aggregation will be responsible for long-term supply, whilst POIC acts as the confidence provider in the arrangement as the buyer of the biomass.
Pang signed on behalf of POIC Trading Sdn Bhd while Puan Sri Datin Dr Liana Low signed for BELL Corporation and Jeffrey Lu, chairman of My Clean Enerygy Sdn Bhd signed on behalf of his company.
The signing was witnessed by Deputy Chief Minister cum Minister of Industrial Development Datuk Seri Panglima Raymond Tan Shu Kiah.
Pang said uncertain pricing and supply uncertainty have combined to prevent the take-off of a biomass industry which national planners predicted to be worth in the billions and a provider of tens of thousands of jobs.
He cited the example of a Korean company who withdrew a renewable energy project from the Lahad Datu palm oil industrial cluster (POIC Lahad Datu) because it could not secure long-term supply of biomass.
Sabah has more than 1.5 million hectares of oil palm and is currently ranked the top oil palm producing state in Malaysia.
Biomass comes from the oil palm fields as well as oil palm mills. From the fields are fronds and trunks; while the mills produce wastes in the form of empty fruit bunches, palm kernel shells, palm kernel cakes, mesocarp fibres and palm oil mill effluent (POME).
All biomass have commercial and industrial uses in pellets, compost, briquettes, energy, biochemical, graphene, etc. One of the agendas of POIC has been to attract investors to commercialise technologies using biomass at POIC Lahad Datu. Not much has materialised because of problems with biomass aggregation, price and supply uncertainties, until the MOU.
Describing it as a long journey, Pang said POIC is now able to assure its investors of biomass supply and price security.
Meanwhile, he revealed that POIC is repositioning the company from one focused on palm oil downstream industries to offering itself as a regional logistical hub.
With the completion of its container terminal early 2018, POIC will boast of being the only integrated port facility in Sabah with a container terminal and terminals for bulk cargo, oil and jetty landing. These facilities will be the ‘front-and-centre’ of POlC’s marketing push.
Tan told reporters that the MOU to set up a satellite biomass collection centre is a big step forward towards protecting the environment.
He said that the MoU was the result of years of effort towards the setting up of a biomass collection centre in Sabah.
“A collection centre may be a small development but it is that step that we need to take for something really big,” he said.
“Over the years we have been talking about the biomass strategy and the papers that have been developed.
“We also talked about the technology and in terms of how to generate wealth from biomass and what a big thing we can do in order to clean up the environment. There are a lot of papers, a lot of people in the industry have given their views.
“We are, starting with this small step, going to make it work. We are talking about how we could start this biomass industry. What we have today is the fact that POIC is able to step forward with their partners to say that let’s do something,” he added.
Tan also said that there are people with technology and the application of what technology they have to build the industry requires a sustainable supply of biomass.
“We are taking that step today and it needs that kind of collaboration ... people who are passionate about the industry come together and help,” he said.
Pang said that they were in talks with investors interested in the project.
“Investors are ready at our doorstep and we should be able to bring the talks to a conclusion before the end of the year,” he said.