Sabah’s palm oil downstream industry poised for advancement
SANDAKAN: Deputy Minister of Plantation and Commodities Datuk Chan Foong Hin underscored the urgent need for Sabah’s palm oil downstream sector to bridge the gap with its counterpart on the peninsula.
He said his ministry is committed to actively supporting Sabah’s efforts to expand its palm oil downstream industry, aiming for a balanced and robust development that will generate increased revenue through valueadded palm oil products.
In 2023, Sabah produced a significant 4.5 million tonnes of crude palm oil, with 21.8% of this volume exported in its crude form. This contrasts sharply with the peninsula’s export rate of only 5.5% of crude palm oil, highlighting the substantial potential for Sabah’s palm oil downstream industry growth.
Chan emphasised that a higher rate of crude palm oil exports results in diminished raw materials available for downstream value addition or refining.
He stressed the importance of Sabah diversifying beyond upstream production, advocating for the establishment of a mature industry supply chain that maximises potential from upstream to downstream sectors to safeguard the sustainability of the palm oil industry.
During his recent four-day visit to Sabah’s east coast, Chan toured both Palm Oil Industrial Clusters (POIC) in Lahad Datu and Sandakan, meeting with two companies specialising in palm oil downstream activities: Mewah Datu Sdn Bhd, a subsidiary of Singapore’s Mewah Group, and Gamalux Oils Sdn Bhd from Pakistan, both situated in POIC Lahad Datu.
He emphasised the pivotal role of the POICs along Sabah’s east coast as catalysts driving industrialisation efforts and as core centres for palm biomass and high-value palm oil downstream industries.
“The Sabah POICs offer comprehensive port and logistics infrastructure, poised to drive accelerated economic growth and industrial development. This makes it a highly appealing and promising investment destination.
“I am also excited to learn about Gamalux’s plans for oleochemicals expansion in year 2025, marking a significant milestone as the first unit in Malaysia Borneo. This event not only demonstrates Gamalux’s ambition but also its strong confidence in Lahad Datu as a growing hub for sustainable industrial development within the palm oil sector,” said Chan.
He also expressed his commitment to close collaboration with Sabah’s Minister of Industrial Development and Entrepreneurship, Datuk Phoong Jin Zhe, to spearhead the development of Sabah’s palm oil downstream industry.