Kota Kinabalu: Palm Oil Industrial Cluster (POIC) Lahad Datu has now recorded combined investment values amounting to RM1.3billion.

This includes a RM350million investment by Eco Biomass Energy Sdn Bhd (EBE), a subsidiary of ASrIA member Eco-Frontier Co based in South Korea, which was the latest to seal a sale and purchase agreement with POIC Sabah Sdn Bhd at Pacific Sutera Hotel, Thursday.

The company, the second of such being set up by an investor from South Korea in POIC Lahad Datu, will build a biomass-fired combined heat and power generating plant (CHP) on 41 acres in the industrial cluster.

This first of its kind plant in Sabah will produce 24megawatts of power and 150 tonnes per hour of steam in the first phase of its operation, all are meant for the supporting the requirements of the industries there, before increasing to 35MWs and 220 tonnes/hour in the second phase.

Ground-breaking ceremony is in June next year, the proposed plant is scheduled to start supply steam by October 2009 and followed by the electricity supply in April 2010.

The signing and exchanging of S&P agreement was made between EBE and POIC Sabah led by EBE CEO Chung Jung Man and Industrial Development Ministry's Permanent Secretary Ismail Abdullah, witnessed by EBE Chairman cum Eco-Frontier CEO Cheoung Hae Bong and Industrial Minister cum POIC Sabah Chairman Datuk Dr Ewon Ebin.

Chief Minister Datuk Seri Musa Aman, who witnessed the signing, was happy over the achievement of the government-linked company (GLC) to become something of a household name within two years after it started operations.

Hoping POIC Sabah will keep the momentum going, he believe the EBE's investment in POIC Lahad Datu and the expertise that it is bringing in have great significance on the clustering concept at POIC Lahad Datu as well as the Sabah Government's commitment to sustainable development.

"With the arrival of a CHP plant in POIC Lahad Datu, we are inching closer to fulfiling all the requirements. As the name implies, the CHP plant will not only produce power, but also heat, in the form of steam, which most of the factories involved in downstream processing of palm oil requiring a lot," he said.

This translates into much cost-saving for the investors and precisely what the clustering concept is all about, that is to have inter-dependent factories and utilities clustered together for optimised synergy.

"In this regard, I am proud that POIC Lahad Datu is probably the first industrial estate in the country to have a full-scale, comprehensive central steam supply system," he said.

APART from energy and other infrastructures, Musa said the initial phase of POIC Lahad Datu's first jetty system is due for completion by the end of this year, and by June 2008, the deep water jetty will also be completed.

"This collection of four linear jetties and one main jetty is capable of accommodating vessels from 5,000 deadweight tonnes to 100,000 deadweight tonnes," he said.

He said when POIC Lahad Datu signs up with a major bulking installation operator in the very near future, most if not all the requirement for major infrastructure will have been fulfilled.

Next on the drawing board will be the provision of industrial and commercial warehousing, and the provision of so-called 'soft' infrastructure such as banks, clinics, supermarkets, a post office, shops, among others.

"Undoubtedly, POIC Lahad Datu, when fully operational, will bring a wide range of development to the district. From the Government's stand point, our aim is to create business opportunities, jobs and wealth for the people," he said.

He said the economic spinoffs are sure to come because POIC Lahad Datu has been designed to be an integral part of Lahad Datu's development.

"The influx of investors and the proliferation of factories at POIC Lahad Datu in the coming years are sure to create new demands on all manner of goods and services. A development plan for Lahad Datu is being conceived to ensure that the town is able to respond to its increasingly important economic status," he added.

Meanwhile, Musa who is also the Finance Minister, said Lahad Datu District Office may be expanded to cope with the services expected of a fast expanding township and population.

"As a result of POIC Lahad Datu and the rapid growth in the oil palm sector, major and urgent improvements are needed on infrastructure including roads and a better equipped airport to handle increasing number of visitors," he said.

"A couple of new hotels have emerged, and I understand the Sabah Urban Development Corporation is building a new hotel and shopping complex in the town centre," he added, hoping one or two 5-Star hotels will be built in Lahad Datu as the demands grow.

This will help facilitate the development of the tourism industry in this part of Sabah especially since Lahad Datu is the gateway to such tourist attractions as Maliau Basin, Tabin Wildlife Conservation and Danum Valley.

Sabah Government is committed to sustainable development, he said, and in this respect it welcomes Eco-Frontier's intention to fire its energy production with oil palm biomass such as empty fruit bunches, palm kernel shells, mesocarp and palm fronds.

"This approach to power generation optimises the utilisation of the massive quantities of biomass generated from the 1.2 million hectares of oil palm plantations we have in Sabah. This project is significant in that it can help to mitigate the stringent scrutiny of the global palm oil market," he said.

He said importing countries are expected to impose such scrutiny on producing countries to gauge the environmental sustainability of the oil palm production chain.

"The setting up of the proposed CHP plant is significant to the Sabah Government's commitment to sustainable development," said Musa, adding the oil palm industry is a major producer of methane gas through palm oil mill effluent (or POME) and rotting empty fruit bunches.

With the expertise of Eco-Frontier in the business of finance and carbon trading, he is confident that the CHP plant will be a major earner of carbon credits. The establishment of the CHP plant will also create awareness of the Clean Development Mechanism (CDM) concept, which will pave the projects and developments that can potentially generate carbon
credits.