Where we are today
Malaysia's palm oil industry is the fourth largest contributor to the national
economy and currently accounts for RM53 billion in GNI. The industry spans the
value chain from upstream plantations to downstream processing. The development
is mainly private sector driven and remains heavily skewed towards upstream
activities. However, with limited land available to expand plantations, Malaysia
will need to enhance upstream productivity and capture the full potential of
existing downstream opportunities to sustain growth in this sector.
Vision for the future
Palm oil will remain a major contributor to the Malaysian economy over the
next 10 years building on a core set of advantages including rising
relative-demand globally versus substitutes, continued high oil-yield per
hectare over substitutes, distinctive edge in yield and quality over
competitor nations such as Indonesia and a conducive regulatory environment.
These would be supplemented by superior productivity through mechanisation
and a stronger presence in the lucrative downstream segment.
Targets and aspirations
The Palm Oil NKEA is targetted to raise total GNI contribution by RM125
billion to reach RM178 billion by 2020. In achieving this, an additional
41,000 jobs will be created, of which 40 percent will be high-skilled jobs
earning average monthly incomes of RM6,000.
The NKEA plans to implement eight core EPPs that span the palm oil value
Upstream productivity and sustainability
EPPs will focus on improving upstream productivity and transforming
Malaysia's oil palm plantations by accelerating the replanting of aging
oil palms, mechanising plantations using equipment such as CantasTM,
stringently enforcing best practices to enhance fresh fruit-bunch yield,
implementing strict quality control parameters to enhance oil extraction
rate and developing biogas facilities at palm mills to capture the
methane gas released during the milling process.
Downstream expansion and sustainability
will target capturing the lucrative downstream segment where Malaysia
has little presence today by focusing on developing finished segments
that generate high value, including oleo-derivatives and selected food
and health-based segments, as well as commercialising second-generation
bio fuels from the resulting bio mass that is generated in the industry.
Achieving our aspirations will require cumulative funding of RM124 billion
over the next 10 years with 98 percent of the funding coming from the
private sector. The total public funding for capital expenditure is expected
to be RM2.9 billion with an additional RM2.7 billion in the form of tax
incentives, soft loans and cash incentives to promote private-sector
development in the downstream sector.
There are also three key sector-wide enablers that must be set up including
increasing the number of university courses and graduates in chemical
engineering, bioengineering and related courses to meet the demand for the
nearly 80,000 skilled personnel; extending the Brain Gain Malaysia programme
to Malaysian diaspora who are food scientists and fast-moving-consumer-goods
marketing specialists in leading global food and non-food downstream
companies; and industry companies and Government agencies such as Malaysian
Palm Oil Board playing a key role in collecting information such as business
intelligence and product intelligence to ensure we stay ahead of the