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Signing ceremony of Sale & Purchase Agreements Between POIC Sabah Sdn Bhd & Investors


KOTA KINABALU, Mon. (Nov 6, 2006) - More than RM1 billion worth of investments are expected in Lahad Datu in the next two years, and the figure will grow rapidly as the palm oil industrial cluster (POIC) in this east coast town develops.

Initial investors' interest supports optimism that Lahad Datu may become the biggest biodiesel producing port in the world.

These bright economic prospects were revealed at a signing ceremony of sale and purchase agreements for land in the POIC in Lahad Datu. The 1,150-acre project is being undertaken by state-owned POIC Sabah Sdn Bhd.

Seven of the eight companies who concluded their land purchases were present at the ceremony, witnessed by Chief Minister Datuk Musa Haji Aman at a leading hotel here.

"This is not only a commendable achievement of POIC but is of great significance to the State. For we are about to witness for the first time in Sabah's history a large wave of foreign interest in developing Sabah's downstream industry," Musa said in his speech.

The eight investor groups have acquired about 200 acres of land at POIC Lahad Datu. They included companies from United Kingdom, Australia, South Korea and Malaysia. Six of the companies are investing in biodiesel production. Based on information on their plans at POIC Lahad Datu and licences granted to them by Federal authorities, these companies are expected to inject close to RM1 billion in investments to produce close to one million tonnes of biodiesel by the end of 2008.

With a number of other investors close to finalizing their purchase of land at POIC Lahad Datu, POIC Sabah Sdn Bhd chief executive officer Dr Pang Teck Wai is optimistic of a quantum leap in inflow of investments into Sabah's palm oil downstream industries in the coming years.

Dr Pang, who has been helming the company since its incorporation in 2005, said the rush of investors' interest is testimony of the massive business potential in the sector.

"We have the raw materials for feedstock. We have an excellent harbour and we are located near to the Southern Philippines and Indonesian Kalimantan which are sources of future oil," he said, pointing to Lahad Datu's unparalleled superiority as a destination for investments in palm oil downstream industries.

Sabah is the major palm oil producing state in Malaysia accounting for 35% of the nation's total output. It has about 1.3 million hectares of oil palm plantation with a potential for expansion to up to 1.7 million ha. Lahad Datu was chosen for the site of Sabah's first POIC because of its location within the major oil palm growing belt in the State. State-owned Sawit Kinabalu Sdn Bhd is developing the State's second palm oil cluster near Sandakan to take advantage of the vast acreage of oil palm in the Sandakan district, and neighbouring Kinabatangan and Beluran district.

Global demand for palm oil has been growing steadily as a source of edible oil, raw materials for a host of oleochemical and pharmecautical products and as feedstock for the production of biodiesel.

Environmental concerns and interest in biodiesel, and therefore palm oil, intensified in recent years due to volatility in the supply and cost of fossil fuel. More and more countries around the world are legislating laws on the use of biofuels, thus adding premium on renewable feedstock such as oils from rapeseeds, soya beans and oil palm.

Most of biodiesel to be produced from POIC Lahad Datu is destined for markets in Europe, United States, Japan and Korea.

Please download speeches:

Yang Amat Berhormat Datuk Musa Haji Aman, Chief Minister of Sabah

Yang Berhormat Datuk Dr. Ewon Ebin, Chairman of POIC and Minister of Industrial Development





Profile of the Investors

SPC Biodiesel Sdn Bhd

SPC Biodiesel Sdn Bhd is a Malaysian company that intends to manufacture and sell high quality biodiesel. When fully operational, SPC Biodiesel's plant at POIC Lahad Datu is expected to produce 100,000 metric tonnes of biodiesel per year. The feedstock to produce the biodiesel will be RBD palm olein. The company expects to export the biodiesel to global markets including the European Union and United States.

The SPC Biodiesel project team has along history of working in Sabah in particular in the plantations industry. These significant work experiences in the palm oil industry allied to exposure to the energy sector are key factors in ensuring successful implementation of the project.

The project team has obtained the requisite licences to manufacture biodiesel and are currently in an advanced stage of implementing their plans. SPC Biodiesel's manufacturing plant is expected to commence production in the second half of 2007.

Lahad Datu Edible Oils Sdn Bhd

Lahad Datu Edible Oils Sdn Bhd, or LDEO, is one of the earliest companies to have started palm oil downstream processing in Lahad Datu. It is a joint-venture company between state-owned Sabah Land Development Board, Maytown Sdn Bhd and China Vegetable Oil Corportion.

LDEO's expansion to POIC Lahad Datu will enlarge its refinery capacity as well as its output of a wide range of oil-based products such as RBD palm olein, RBD palm stearin, palm fatty acid, palm kernel expeller, crude palm kernel oil, RBD palm kernel oil, RBD coconut oil and coconut fatty acid.

Global Bio-Diesel Sdn Bhd

Global Bio-Diesel Sdn Bhd is a wholly-owned subsidiary of ECO Solutions Co. Ltd, an industry leader in South Korea specializing in environmental engineering and bio-energy. Clobal Bio-Diesel is the vehicle through which ECO Solutions operates its biodiesel project at POIC Lahad Datu.

Total investment into Global Bio-Diesel is estimated at USR65 million for its biodiesel and related operations. The biodiesel manufacturing plant will be constructed by September 2007 with an initial production capacity of 200,000 metric tonnes per year. The project is to be eventually expanded to produce a total output of 500,000 metric tonnes per year, thus making Global Bio-Diesel one of the largest biodiesel manufacturers in the world.

ECO Solutions was established in 1998 and is a public company listed on the Kosdaq. It has a current capital of approximately US$6.4 million and annual revenue of approximately US$25 million. The revenue is expected to at least double once production of biodiesel at POIC Lahaed Datu gets underway.

QL Bioenergy Sdn Bhd

QL Bionergy Sdn Bhd is a subsidiary of QL Resources Berhad, a company listed on the Main Board of Bursa Malaysia. QL is a successful agriculture-based commodity group with core activities in fisheries, oil palm and poultry farming.

QL stared in the early 80s as a trader of agriculture-based produces. Since then, it has grown into Malaysia's largest fishery products manufacturer, Asia's largest fish paste (surimi) producer and Sabah's largest poultry egg producer. Today, QL's turnover is more than RM1 billion, with 40% of these activities being in Sabah.

QL's investment in Sabah is more than RM200 million. With Bukit Wang's biodiesel project in POIC Lahad Datu and other existing organic expansion, QL plans to double its investment in Sabah in the next three years.

QL's fisheries operations in Sabah are based in Tuaran and Kota Kinabalu, while its poultry egg operations are based in Kota Kinabalu and Tawau.

QL's oil palm-related activities include CPO milling operations in Tawau and Kunak. The Company has about 3,000 acres of oil palm plantation around Tawau.

QL has contributed significantly to Sabah's agricultural activities. It supports the Sabah Government's vision of making POIC the Rotterdam of the East. In addition to the biodiesel project at POIC Lahad Datu, QL will also support and enhance the palm oil downstream activities at POIC Lahad Datu by barging Indonesian CPO to Lahad Datu when its new 20,000-hectare oil palm plantation in Tarakan, East Kalimantan, is developed.

Zurex Corporation Sdn Bhd

Zurex Corporation Sdn Bhd is a joint-venture company between Malaysian and UK investors. The company, with a paid-up capital of RM2.5 million, was set up solely to produce biodiesel and it aims to be a major palm diesel producer in the world.

Zurex's UK partner, Biofutures Pls, is a public-listed company in the UK.

Biodiesel LD Sdn Bhd

Biodiesel LD Sdn Bhd intends to set up a plant at POIC Lahad Datu to produce up to 200,000 metric tonnes of biodiesel per year.

Its objective is to replace petroleum diesel with biodiesel by:

  • continuously researching and producing low-cost feedstock
  • extracting more value-added products in the process of making biodiesel
  • efficient cost control in production and distribution

DXN Oleochemicals Sdn Bhd

DXN Oleochemicals Sdn Bhd is a subsidiary of DXN Holdings Bhd, a company listed on the Main Board of Bursa Malaysia. The group has 21 subsidiaries and one associate company.

DXN Oleochemicals Sdn Bhd's project in POIC Lahad Datu is an expansion from its Kuantan (Pahang) project under DXN Biofuels Sdn Bhd. This Kuantan project has an initial capacity of 200,000 metric tonnes per annum and is expected to start operation in October 2007. It will be expanded to double its annual production in the following year.

At POIC Lahad Datu, DXN Oleochemicals Sdn Bhd's plan is to put up two biodiesel plants with annual capacity of 400,000 MT and 500,000 MT respectively. The first-phase production is estimated to be 200,000 MT per year.

DXN Oleochemicals' projects in POIC Lahad Datu is estimated to cost USD127 million. Combined with its Kuantan facilities, the DXN Group expects to be one of the largest biodiesel producers in the Asian region in the next four years with an annual capacity of 800,000MT.

DXN expects to exports its biodiesel to Germany and the United States. Plans are afoot to acquire land in Germany to build a tank farm to store and distribute Malaysian-made biodiesel.

Inai Bumi Sdn Bhd

Ini Bumi Sdn Bhd is a locally incorporate company which aims to explore the vast business potentials in the biotech industry in Sabah. It envisages a total investment of RM120 million to procure German processing technology for the production of biodiesel and pharmaceutical-grade glycerine. The target is to produce 100,000 metric tonnes of biodiesel and 10,000 metric tonnes of glycerine per year.

Its targeted markets are the United States, European Union and Japan.

Asia Depot Sdn Bhd

Asia Depot Sdn Bhd is a subsidiary of listed company Swee Joo Bhd. The company was incorporated in Malaysia on 13 April 2004 to support and compliment its shipping and haulage divisions in Sabah. Asia Depot Sdn Bhd is principally engaged in container depot, warehousing, container repair services as well as logistic management.

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