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Mobilization of Oil Palm Biomass to
Realize the Bio-Refinery Potential in
Sabah, Malaysia
Dr. Pang Teck Wai
CEO, POIC Sabah Sdn. Bhd.
1
1. Oil palm biomass availability for
bio-refinery in Sabah, Malaysia.
2. Biomass supply issues and
strategy
3. Role of the Malaysian Govt in
developing bio-refineries/products.
PRESENTATION OUTLINE
2
OIL PALM BIOMASS
AVAILABILITY FOR BIO-REFINERY
IN SABAH, MALAYSIA
3
Oil Palm Biomass Resources and Production in Sabah
Estimated oil palm biomass*
generated in Sabah (2012)
Oil Palm Fronds
Oil Palm Trunks
Empty Fruit Bunches
Mesocarp Fibres
Palm kernel Shells
Palm Oil Mill Effluent
BIOMASS TYPE Mil. Dry Tonnes/Year
28.1 Total :
16.4
4.5
2.3
2.5
1.4
1.0
4
Located at the centre of oil palm growing belt in Sabah
Numbers of CPO
Mill from POIC
Lahad Datu
Distance No
<50 km 37
50-100 km 48
100-150 km 28
>150 km 11
Total 124
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Source : Agensi Inovasi Malaysia (2011)
• Sabah : 12.6 Mil. Tonnes (49.1%)
• Peninsular Malaysia : 11.21 Mil. Tonnes (43.2%)
• Sarawak : 1.84 Million Tonnes (7.2%)
Copyright © POIC, 2013
25 Million Dry Tonnes of Biomass
Can be Mobilised at Competitive Cost
6
Sabah
MALAYSIA
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Value adding opportunities in biomass-based downstream industries
Products Currently Underutilised
Oil Palm Fronds
16.40 million tonnes
Empty Fruit Bunches
2.3 million tonnes
Fibre Pulp & paper
Pellets Compost
Briquette
Particle Board / Moulded Particle
Board Finished Paper Product
Animal Feed from Oil Palm Fronds
Biobased Chemical
Bioethanol
Wood Plastic
Composite
Biofuels
Downstream Opportunities
Va
lue
Ad
din
g
op
po
rtu
nit
ies
4.5 million trees
Plywood Furniture from Oil
Palm Lumber
Oil Palm Trunks
• Key chains
• Photo frames
• Kitchen utensils
• Decorative woods panelling
MDF
8
BIOMASS SUPPLY
ISSUES & STRATEGY
9
Oil Palm Biomass Supply Issues in Sabah
Needs:
Need to move biomass from
sources to end users.
Biorefinery industry requires
long term, secured, supply of
large amount of biomass
feedstock at competitive cost.
10
Challenges:
Plantation based biomass too costly
to transport (high moisture content
and bulky)
Biomass per mill not sufficient for
large scale mobilization (each mill
generates 20,000 dry MT Biomass)
Mills in one area belong to different
owners
Oil Palm Biomass mobilization challenges in Sabah
11
Govt as facilitator to aggregate
palm biomass: 2 models
POIC Biomass Collection &
Processing Centre Model
Biomass Joint Venture (JV)
Cluster Model
How to Resolve the Biomass Supply Issues?
12
POIC Biomass Collection and Processing Centre Model
Biomass Investor
(Purchaser & User)
POIC Lahad Datu/Govt
Invest in infrastructural
development of the centre
Other Biomass
End users
Biomass Feedstock*
from palm oil mills,
plantations
& other sources
* To start with Empty
Fruit Bunches (EFB)
Biomass
Collection
&
Processing
Centre
Govt as Facilitator:
Sabah State Govt
initiative, Malaysia
13
Distribution Pattern of Biomass Collection Centres
Legend
Collection Centre Palm Oil Mills
Distance of mill from collection centre 50km Radius
100km Radius
POIC Collection
Centre
Note:
a) Distance roughly
to scale.
b) About 85 mills
within 100 km
radius of POIC.
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Biomass Joint Venture Cluster Model
Biomass Owners
(Mills, Plantations)
Contribution of biomass*
JV Cluster (Board of Director)
[ Management Team]
Govt Agencies
for support & advice
(e.g POIC Lahad Datu)
Biomass Downstream
Investments
(biopellet, bioethanol,
bio-chemicals etc)
(Op
tio
n f
or
ca
pit
al in
ve
stm
en
t)
[* To start with Empty
Fruit Bunches (EFB)]
Govt as Facilitator:
Agensi Inovasi Malaysia
(Prime Minister’s Dept,
Malaysia)
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Collaboration is critical to enable capturing downstream opportunities
1 mill
standalone
Fertilizer Animal
feed
Bio-
energy
4-5 mills
Pellet play
at scale
30-40 mills
Diversified
portfolio
1-2 pellet
plants
Bio-based
chemicals
plant
Potential product portfolios accessible with mill aggregation
XX RM / ton
40 300 460 200 460 2,500
▪ Access to high value markets
▪ Capital and operational savings
▪ Access to large, high quality
technology and downstream partners
▪ Financial risk-sharing
Advan-
tages
Source: Bas Melssen, Agensi Inovasi Malaysia, 2013 16
What does a JV cluster look like? ILLUSTRATIVE
Portfolio JV
Biomass supply:
600,000 MT (Dry)
Biomass supply:
120,000 MT
Pellets
Biomass supply:
240,000 MT
Bioethanol
Mill owner #1
Biomass supply:
240,000 MT
Mill owner #2 Mill owner #3
20% stake 40% stake 40% stake
100% JV stake 11-17% JV stake through
value of biomass
0% Partner stake 83-89% Partner stake
Partner #1
(e.g. Korean firms)
Capacity: 100,000 MT
Feedstock required:
100,000 MT
Capacity: 100,000 MT
Feedstock required:
500,000 MT
Partner #2
(e.g. ethanol producer)
CapEx required:
Estimated IRR:
RM 25-27 million
10-15%
RM 450-750 million
18-28%
Source: Bas Melssen, Agensi Inovasi Malaysia, 2013 17
ROLE OF THE MALAYSIAN
GOVT IN DEVELOPING BIO-
REFINERIES/PRODUCTS
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National Biomass Strategy 2020
Source : Agensi Inovasi Malaysia (2013), www.innovation.my
• Launched in November
2011, updated June 2013
• Creation of wealth from
biomass for high value-
added uses.
• Start with oil palm
biomass.
• Build several
biorefinery/products
clusters in Malaysia.
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Background of POIC, Sabah
Set-up in Jan 2005 as the 1st
comprehensively developed (infrastructure)
palm oil industrial cluster in the world.
Owned by State Govt of Sabah, Malaysia.
Aim:
Value add to palm oil and palm bio-mass.
Palm Oil Industrial Cluster Lahad Datu
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Government-
backed
Critical Strength and Advantages
Existing
industrial players
Copyright © POIC, 2012
Putting the Pieces Together : Opportunities
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For more information please contact :
POIC Sabah Sdn Bhd
17th Floor, Wisma Perindustrian,
Jalan Istiadat, Teluk Likas
88400 Kota Kinabalu
Tel : (6088) 272 261 / 230196
Fax: (6088) 272 580 / 272 581
Webpage: www.poic.com.my
Ms. Rose Pun
Senior Manager, Marketing & Sales
Email : [email protected]
Ms. Veve Lo
Manager, marketing & Sales
Email: [email protected]
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