KUALA LUMPUR (March 7): Most oil palm plantation companies in Malaysia could easily increase their yield by 10% through more stringent management, said Kuala Lumpur Kepong Bhd (KLK) chief executive officer Tan Sri Lee Oi Hian.
At the 34th Palm & Lauric Oils Price Outlook Conference & Exhibition (POC2023) on Tuesday (March 7), Oi Hian urged local upstream players to “get out of their comfort zone” and improve their competitive edge.
“If we just tighten our management, most plantation companies including KLK can easily get a 10% increase in yield,” Oi Hian said in the event organised by Bursa Malaysia at Shangri-La Hotel Kuala Lumpur which attracted a registration of about 2,000 delegates.
“Palm oil has always been touted as a wonder crop, which is able to produce eight times soy oil in terms of per hectare. But the reality of it is that palm oil production per hectare all these years has been declining, whereas the competing oils like soy, rapeseed and sunflower have made great progress in the production of oils in terms of per hectare.”
He stressed that there is also a need for transformational research and suggested industry players look deeper into the use of microbes, which could reduce the use of fertilisers by 20%.
IOI Corporation Bhd’s group managing director and chief executive Datuk Lee Yeow Chor — a fellow panellist alongside Oi Hian in the session titled “Future Proofing Malaysian Palm Oil” — suggested the Malaysian palm oil industry expand further downstream due to land limitation in the upstream segment.
“Malaysian companies have suffered a bit of stigma for being regarded as a commodity-based industry. My vision is that if we can transform the downstream, we can transform the industry to a more stable and multisectoral based industry,” he said.
Currently, Yeow Chor said much of the downstream segment involves the production of basic commodities such as cooking oil, margarine, soap and fatty acids. He urged the industry to look into the production of high-value niche products and to partner with other industries to provide offtake certainty for the products.
“The development of the downstream economies can help Malaysian companies go global,” he said.
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