POSTED ON OCTOBER 9, 2019, WEDNESDAY AT 12:15
KUCHING: The Sarawak Oil Palm Plantation Owners Association (Soppoa) has compiled a wishlist which it feels would assist the palm oil industry in the state.
In a statement yesterday, it called for an extension on accumulated business losses and unutilised capital allowances from the proposed seven years to 14 years for oil palm plantation companies operating in Sarawak.
“Based on MPOB (Malaysian Palm Oil Board) statistics, average yields in Sarawak are comparatively lower than the oil palm-producing areas in the peninsula and Sabah, while production costs are also relatively higher here.
“Extending the accumulated business losses and unutilised capital allowances to 14 years in this high-capital investment industry will enable plantation companies operating in Sarawak to remain competitive in the industry,” it said.
Soppoa also called for more government incentives for methane gas capture or avoidance, like a biogas plant for renewable energy to reduce carbon footprint of crude palm oil production and to enhance its marketability.
It said palm oil mills operating in Sarawak needed to adhere to one of the directives to be green, but methane gas capture is mandatory for new palm oil mills licence in Sarawak.
“Unlike the grid line supply in the peninsula and Sabah, the captured gas from mills in Sarawak has no uptake for conversion to energy for the grid line here; the gas will have to be burned off with no income generation.
“Incentives for gas capture have to be provided for mills to comply with the directive as otherwise, the expensive exercise will only make the palm oil industry in Sarawak even less competitive and take a longer period to break even.”
The association also urged the government to consider duty-free import for all categories of agricultural machines for plantation use, especially as more companies are resorting to the use of machineries to counter rising labour cost as well as to increase productivity.
Soppoa also called for more incentives, taxes or otherwise, for downstream investments in palm oil-related industries in Sarawak, while also suggesting the setting-up of a Palm Oil Industrial Cluster (POIC) to encourage investments in more downstream activities related to the palm oil industry in the state.
“There is a need to have the POIC set up as this will provide the necessary oleochemicals and related products from the industry for other applications in various spin-off industries.
“With the cluster in place, services and supply link industries will converge on the area to provide the necessary services and logistics for the cluster industries around the POIC. Apart from the current excellent port facilities, there will be new jobs creation for the locals,” it remarked.
It added that with the completion of the Pan Borneo Highway expected within the next five years, the government also should consider the accessibility of feeder roads to the highway.
Soppoa also called on the government to consider setting up a Plantation Academy in Sarawak which is customised for the needs for the plantation sector in order to maintain a constant and sustainable supply of plantation professionals to meet the demand of the expanded industry.
“Outsourcing from outside Sarawak is now more difficult as they are fewer professionals available due to competition from neighboring countries and logistics issues for expatriated families.”
It also requested MPOB to set up a Research Centre with proper laboratories in Sarawak to cater to research and development needs in the state, especially with regard to the marketability of CPO and its increasing demands on sustainability practices like MCPD and GE threshold parameters.
“This will enable plantations in Sarawak to keep pace with sustainable development in areas of research as Sarawak is a sizeable state when compared to the peninsula with different sets of local soil types, weather conditions, terrains and issues.
“The centre with its new facilities will complement the current existing research and development activities in the peninsula and Sabah,” Soppoa said.