Sibugay Province To Become Center Of Oil Palm Industry In South RP

ZAMBOANGA SIBUGAY (Darwin Wee / 04 Oct) - Zamboanga Sibugay is eyeing to become the center of oil palm industry in Zamboanga Peninsula, having at least 113,000 hectares open for investors to develop oil palm plantations.

The oil palm industry project is being implemented by the Sibugay Land Resource Development Corporation (SLRDC) - a consortium of local government unit and non-government organizations in the province - about 110 kms east of here - which aims to partner and lure foreign inventors to put up agri-business in Zamboanga Sibugay.

In an interview SLRDC's president Bennet D. Santander said, in addition to the 113, 000 hectares, the group with the help of the Philippine Coconut Authority and the Bureau of Plant Industry, have already identified at least 73 hectares for nursery that will serve as the seed bank of oil palm seeds which will supply the peninsula.

The plan of becoming the center of oil palm industry in Zamboanga Peninsula was an offshoot of a meeting during the formulation of the Oil Palm Development Roadmap for Mindanao that was agreed by different oil palm growers and government agencies in Davao City late last year.

Mr. Santander, who is also the provincial economic planning officer, said the group is also planning to develop this year at least 4,000 hectares for oil palm plantation to jumpstart the project within three years.

He said the group has already sealed an agreement with the Malaysia-based Agriculturist Incorporated in Sandakan district to develop the initial 4,000 hectares for oil palm plantations. It is expected to bring about P1 billion worth of investments in the province.

"The initial 4,000-hectare joint venture projects will jumpstart the oil palm industry in Zamboanga Sibugay," he said here during a two-day workshop at the weekend.

He said the investment will fund the initial establishment of oil palm mill, a 40-hectare oil palm nursery station, fertilizers, and other infrastructures for the initial 4,000-hectare oil palm plantation. The group is targeting this year to import at least 1 million oil palm seeds from Malaysia because of its quality compared to those from Indonesia.

However, he said with the existing ban on exportation of oil palm seeds in Malaysia has become a stumbling block for the development for the project.

Mr. Santander said they have already presented the proposal to lift the ban during the BIMP-EAGA's top officials Third Natural Resource Development Cluster meeting in August in Palawan island in the central Philippines, but this was subjected to further discussion in the upcoming 14th BIMP-EAGA's Senior Minister Officials Meeting which will be held on the first week of November in Kota Kinabalu, Malaysia.

Oil palm is one of the four flagship projects under the BIMP-EAGA's Action Plan 2006-2010. Others include Halal chicken production, seaweeds, and the virgin coconut oil, according to the officials of the BIMP–EAGA Business Council.

Mr. Santander expressed confident that the Malaysian government would grant them a partial lifting of the existing ban, this came after the Palm Oil Industrial Cluster (POIC)-the biggest downstream palm oil industry in Malaysia —expressed need of raw crude palm oil and palm kernel.

The Malaysian oil palm growers have only the capacity to contribute roughly 50 percent of the Industrial demand, and they are seeking other countries, particularly, the member countries of the BIMP-EAGA to provide them raw crude palm oil and palm kernel for their productions.

The POIC area is currently housing several locators which are into palm kernel crushing, biomass, refinery, bulking and warehousing. They also produce different kinds of oil palm finish products, such as in bio-diesel, oleo chemicals, coco butter, bio-fuel, margarine, cooking oil, and cosmetics, he said.

POIC's officials have already indicated there willingness to help us develop our oil palm industry here to become one of their 'upstream producers' of raw oil palm.

One of the factors Zamboanga Sibugay has is the proximity to the POIC's areas in which are based in Lahad Datu, Sandakan and Kimanis, with just 16 to 20 hours per shipment coming from Zamboanga Peninsula," he said.

He said the initial oil palm project would create at least 2,000 jobs and an average of annual income gross of about P250 million to P300 million.

Mr. Santander said they are targeting to develop an additional 18, 000 hectares of oil palm plantations. "The expected investment package will be about P4.5 billion and it will create more than 15, 000 jobs opportunities," he said.

On the other hand, he said another stumble block they are trying to address is the demand of the Malaysian government to have at least 70% ownership of the oil palm industry that will be established in any parts of the country if it is under a joint venture with Malaysia, which runs contrary to our Board of Investments policy.

"We have to address the trade barriers in order for the oil palm industry to take off," he said.

To give solutions to the trade barriers, he said the group is currently drafting a memorandum of understanding between the Philippines and Malaysia during the BIMP-EAGA's Senior Minister Officials meeting this year.Under the understanding Malaysia will provide both the financial capacity and the technological capability.

"They will shoulder all funds to develop an oil palm plantations in Zamboanga Sibugay, including the development of the 73-hectare for nursery which amounts to P50 million to P60 million," he said.

The province, on the other hand, will provide the land and the labor force. The understanding also covers the income sharing agreement of the two countries, he added. (Mindanao Examiner)