Oleh/By : DATO' SERI DR. MAHATHIR BIN MOHAMAD
Tempat/Venue : KUNDANG ESTATE, RAWANG, SELANGOR
Tarikh/Date : 23/04/94
Tajuk/Title : THE OPENING CEREMONY OF THE
PALM-OLEO PLANT
I am delighted to be present here in this Kundang
Industrial Estate to officiate the opening of the Palm-Oleo
factory. I congratulate the management of Palm-Oleo and its
partners, namely Kuala Lumpur Kepong Berhad, Mitsui & Co.
Ltd., Asahi Denka Koygo K.K. Ltd. and Miyoshi Oil & Fat Co.
Ltd., for the commissioning of their fatty acids and
glycerine plant.
2. This joint venture is a fine example of the close
cooperation between Malaysia and Japan's commercial
community. Clearly Malaysia is an ideal investment centre
for joint-venture resource-based manufacturing products.
The cost competitiveness of manufacturing here in relation
to the foreign investors' home costs, coupled with the
availability of markets for the products, has spurred the
setting up of many similar joint ventures. In addition, the
local partner is able to ensure the supply of raw material
while the foreign partner provide the know-how and the
market. It is altogether an ideal arrangement which I
commend to others.
3. The palm oil industry has been one of the many success
stories of Malaysia. It has been an important component
which contributed towards Malaysia's agricultural
development in the 1970's and 1980's when the future of
rubber was dimming. Even today in the context of Malaysia's
more diversified and industrialised economy, the palm oil
industry remains a significant contributor. In 1993, our
country's annual production of palm oil was 7.4 million
tonnes, with exports of six million tonnes. Foreign
exchange earnings of Ringgit 6.3 billion was earned last
year from palm products. The availability of palm oil as an
alternative to the more traditional and expensive edible oil
sources in importing countries has also played a stabilising
role against their inflation.
4. Currently, more so than before, products of the palm
oil industry are important resources to Malaysia's drive
towards a fully developed economy status. Malaysia's
already large production, in addition to the increasing
supply from Indonesia, will continue to assure the world's
oleochemicals industry of a source of easily available and
affordable raw materials, supplementing the traditional
tallow and coconut oil. More importantly, it is providing
the world a more beneficial source of renewable and
environment-friendly raw materials as compared to
petrochemicals. Today's deteriorating environmental
condition is a major concern to all nations especially with
regard to water quality and air pollution. The
biodegradability and non-toxic nature of the products
manufactured from oleochemicals will certainly help to
generally improve the world environment. It is not
unthinkable that future plastics will be based on
biodegradable palm oil.
5. The Malaysian Government's policy of promoting
industrialisation has now given rise to a buoyant
oleochemicals industry in Malaysia. Already, this industry
has surpassed the projections set out in the Industrial
Master Plan. As of end 1993, 15 oleochemicals firms are in
operation with a total capacity exceeding 850,000 metric
tonnes. These firms consumed a total of 670,000 metric
tonnes of raw materials, which is an increase of 58 percent
over 1992. About 450,000 metric tonnes of basic
olechemicals were exported in 1993.
6. Over the recent years, sizeable investments have taken
place in the basic fatty acids and glycerine part of our
oleo chemicals industry, which have resulted in our current
enlarged annual capacity of over 600,000 metric tonnes or
a three-fold increase since 1987. 1 hope that these oleo
chemicals companies will regulate expansion in basic fatty
acids production in line with market demands as we know
that deteriorating margins can arise from over-capacity.
7. I am glad to note that more recently there have been
investments into facilities to produce more sophisticated
oleochemicals like fatty esters and alcohol. Given the now
readily available resources of fatty acids, glycerine and
methyl esters, and Malaysia's continued comparative
advantage as a manufacturing base, the Government hopes to
see ventures going further downstream to oleochemicals
derivatives. Malaysian companies could probably acquire new
technologies or form strategic alliances with established
foreign players. With the increasing prosperity and growth
of the Asia Pacific region, in addition to the Indian
subcontinent, there is a huge potential in demands for
oleochemicals derivatives such as fatty aminos, alcohols,
food and industrial esters for use in a wide range of
consumer and industrial products. Consistent with this
move, the Palm Oil Research Institute of Malaysia or PORIM
will be establishing a Research and Development centre
solely for oleochemicals.
8. The success of the oleochemicals industry and others in
the Malaysian context has created substantial spin-off
benefits to the smaller medium industries which service
these processing plants. A symbiotic relationship has
gradually emerged between both these two sectors of the
economy, resulting in greater multiplier effects in the
country. Since it is important that the running of the
processing plants and the supporting players be efficient,
efforts must be made to continuously upgrade and innovate
through Research and Development, as well as ensure skills
improvements and costs reductions. I am glad to note that
many parts of the oleochemicals plants such as vessels can
be fabricated in Malaysia. In future Malaysian companies
should be able to fabricate and install whole plants.
9. With that I wish the management of Palm-Oleo and its
partners every success in this joint venture and in their
diversification into other oleochemicals products.
10. I now have the pleasure to declare the Palm-Oleo Plant
factory officially opened.
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