Dr Jeffrey presenting the World Sustainable Plantation and ESG Excellence Award to Sawit Kinabalu, received by its Group Managing Director and Chief Executive Officer Datuk Victor Ationg
KOTA KINABALU: The State Government is committed to future-proofing the palm oil
industry, which is Sabah’s most significant export commodity, contributing 22 per cent or RM6.22 billion to the state revenue from 2018 to 2023.
Chief Minister Datuk Seri Haji Hajiji Haji Noor said Sabah, as a powerhouse in Malaysia’s palm oil industry, is aware of the challenges to ensure the industry remains relevant in the future.
“Hence, the Government needs to be ready and must introduce innovative approaches to help the industry achieve and meet the national and international certification requirements,” he said at the World Palm Oil Conference 2024 – “Future-Proof The Palm Oil Industry – Enhancing Sustainability, Innovation and Growth” at the Hilton Hotel here today. His speech was read by Deputy Chief Minister I cum Agriculture, Fisheries and Food Industry Minister Datuk Seri Dr Jefffrey Kitingan.
“As we look to the future, innovation and sustainability must remain at the heart of our efforts. Sabah is already leveraging technology to boost productivity and reduce the environmental footprint of palm oil production,” said the Chief Minister.
Hajiji said precision agriculture, mechanisation and advanced pest management techniques were among the innovations being implemented to enhance yields and sustainability.
In 2023, he said Sabah produced 4.5 million tonnes of crude palm oil (CPO) and remained the largest CPO producer in the country due to superior fruit yields and oil extraction rates.
“We operate 128 mills across the state, with a capacity to process up to 34.7 million tonnes of fresh fruit bunches (FFB) annually. Our oil extraction rate (OER) of 20.4 per cent is the highest in the country.
“Our industrial hubs are critical to sustaining this growth. The Sabah Government owns the Lahad Datu Palm Oil Industrial Cluster (POIC) on the east coast of Sabah, which covers 4,400 acres. It supports light, medium and heavy industries.
“The POIC has specialised ports for bulk cargo, liquid cargo, and containers. These ports are located in a naturally deep harbour, capable of accommodating large cargo vessels,” he said.
In addition, the Chief Minister said the 2,810 acres Sawit POIC in Sandakan, also on Sabah’s east coast under Sawit Kinabalu Sdn Bhd management, was designed to encourage investments in downstream palm oil manufacturing.
“Both POICs are strategically located near oil palm estates and resource-rich areas in the BIMP-EAGA (Brunei-Indonesia-Malaysia-Philippines East ASEAN Growth Area). These hubs are key infrastructure for industrial development on Sabah’s east coast,” he said.
Hajiji said Sabah’s palm oil industry has a pivotal role in reducing greenhouse gas emissions and supporting Malaysia’s goal of achieving net-zero emissions by 2050 in line with the National Energy Transition Roadmap.
Sabah contributed 25.75 million tonnes of biomass from palm oil milling and plantation activities alone, providing a tremendous opportunity for renewable energy and innovation last year.
“We introduced the Oil Palm Biomass Industry policy earlier this year that will soon regulate biomass export and production, ensuring that Sabah benefits from this valuable resource.
“We are confident that with strategic collaboration between the public and private sectors, we can further position Sabah as a global leader in sustainable palm oil production,” he said.
The Chief Minister also called upon all stakeholders, investors, businesses, and
policymakers to join the State Government in making Sabah the global hub for
sustainable palm oil production.
“By investing in downstream processing, adopting advanced technologies, and
upholding the highest sustainability standards, we can ensure that this vital industry continues to thrive while contributing to a greener, more prosperous future for all,” he said.