PRESENTATION OUTLINE

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1 The Green Agenda: Investment opportunities in bio-based materials 7 th September 2015 Shangri-La s Tanjung Aru Resort & Spa, Kota Kinabalu, Sabah INVESTMENT OPPORTUNITIES IN PALM-BASED INDUSTRIES IN SABAH : FOCAL POINT POIC LAHAD DATU Datuk Dr. Pang Teck Wai & Dr Lee Ming Tong PRESENTATION OUTLINE Introduction Sabah, Malaysia : Geographical Location And Investment Zones POIC Lahad Datu : Foundation POIC Lahad Datu : Business Model & Investment Opportunities Palm-based Biomass Mobilization Strategy Concluding Remarks 1

2 INTRODUCTION INTRODUCTION 1. Objectives: 1.1 To introduce the investment opportunities in Natural Resourceful Sabah Development Corridor. 1.2 Especially the investment opportunities in Palm-Based Industries at POIC Lahad Datu. 2

3 SABAH, MALAYSIA : GEOGRAPHIC LOCATION AND INVESTMENT ZONES SABAH GEOGRAPHIC LOCATION Kota Kinabalu to : CHINA HONG KONG Manila Lahad Datu Kuala Lumpur Singapore Hong Kong Manila Perth 55 min 2 hrs 30 min 2 hrs 15 min 2 hrs 55 min 2 hrs 05 min 5 hrs 35 min KUALA LUMPUR Kota Kinabalu SABAH Lahad Datu SINGAPORE Perth 3

4 SABAH INVESTMENT ZONES The key investment opportunities are :- Tourism Logistics Agriculture Manufacturing 1. Northern Agro Forestry Zone 2. Sabah Industrial Zone 3. Tourism & Highland Agri-zone 4. SME Agro-food Zone 5. Interior Agropolitan Zone 6. Agrobio Innovation Zone 7. Integrated Agro-food Commercial Zone 8. Marine Industry & Tourism Zone 9. Sabah Biodiversity Conservation Zone 10. Wildlife Sanctuary 11. POIC Lahad Datu POIC LAHAD DATU : FOUNDATION 4

5 POIC LAHAD DATU : BACKGROUND AND OBJECTIVES Background: POIC Sabah Sdn Bhd set-up in January Wholly owned by Government of Sabah under the purview of Ministry of Industrial Development (MID). As the first and largest comprehensively developed (infrastructure) palm oil industrial cluster in the world. Project development : 4,400 acres of integrated Industrial complex designed to cater for light, medium and heavy industries Objectives: To value add to palm oil and palm biomass. Development of related industries. POIC LAHAD DATU LOCATED AT THE CENTRE OF OIL PALM GROWING BELT IN SABAH At the vicinity of: 1.51 million hectares oil palm plantation (28%) 126 CPO mills (28.6%) 11 palm oil refineries (22%) Easy access to: 6.05 million tonnes of crude palm oil (CPO) million tonnes of crude palm kernel oil (CPKO) (27.5%) 0.70 million tonnes of palm kernel cake (PKC) (27.8%) 30 million dry tonnes of palm-based biomass (30%) * Figure in parenthesis denotes % of national total. 5

6 ESTIMATED PALM-BASED BIOMASS MATERIAL PRODUCTION IN SABAH Biomass Type Volume (Million Dry Tonnes) Sabah Malaysia Oil Palm Fronds Oil Palm Trunks Empty Fruit Bunches Mesocarp Fibres Palm kernel Shells Palm Oil Mill Effluent Total : DEEP SEA PORT & LARGE INDUSTRIAL AREA FOR DEVELOPMENT PHASE 2 PHASE 1 PHASE 3 4,400 acres of industrial land for development 1,600 acres already developed Deep & sheltered harbour ~ depth up to 20-metres 20,000 acres of land bank along the coast line 6

7 POIC INFRASTRUCTURE PIPE RACKS Pipe rack provided by POIC to connect to investors lots within Phase 1 to the liquid jetty Investors are required to lay their own pipelines INTERCHANGE Located within our liquid terminal with boiler and air compressor facility Pipelines are provided from interchange to berth PHASE 1 ELECTRICITY Double Circuit Underground cabling system Electricity PHASE supply up to 3 a total of 50MW At least one ring of 11kV underground cabling circuit running along lot frontage 4,400 acres of industrial land for development 1,600 WATER acres already developed Deep 3 & Million sheltered Gallons harbour (11.35 million ~ depth litres) up in to Permastore 20-metre 20,000 Tanks acres of land bank along the coast line TELECOMMUNICATIONS Underground cabling system Provided by Telekom Malaysia (TM) within the whole POIC area POIC PORT FACILITIES Liquid Bulk Terminal Container Terminal In Progress PHASE 1 Dry Bulk Terminal Under Construction Ready by year 2017 PHASE 3 Barge Berth 4,400 acres of industrial land for development 1,600 acres already developed Deep & sheltered harbour ~ depth up to 20-metre 20,000 acres of land bank along the coast line 7

8 POIC LAHAD DATU : STRATEGY GEOGRAPHICAL ADVANTAGES AS AN IDEAL INTERNATIONAL TRANSHIPMENT HUB POIC Lahad Datu: Deep sea port POIC Lahad Datu Proximity to resourceful BIMP-EAGA Region Potential International Transhipment Hub Untapped shipping route POIC LAHAD DATU : BUSINESS MODEL AND INVESTMENT OPPORTUNITIES 8

9 BUSINESS MODEL : INDUSTRIAL CLUSTERING CONCEPT Palm Oil Industrial Clusters & other related Industries VALUE ADDING OPPORTUNITIES IN PALM OIL-BASED DOWNSTREAM INDUSTRIES 9

10 VALUE ADDING OPPORTUNITIES IN PALM-BASED BIOMASS DOWNSTREAM INDUSTRIES Feedstocks Currently Underutilised Downstream Opportunities Oil Palm Fronds 16.4 million dry tonnes Oil Palm Trunks 4.5 million dry tonnes Bio-Pellets Biofuels Bioethanol Biobased Chemicals Furniture from Oil Palm Lumber Wood Plastic Composite Plywood Current Focus at POIC Lahad Datu: Bio-refinery Bio-fuels Bio-pellets Biochemicals Empty Fruit Bunches Particle Board / Moulded Particle Board MDF Pulp & paper Finished Paper Products 2.3 million dry tonnes Compost/fertilizer Fibre Animal Feed from Oil Palm Fronds PALM-BASED BIOMASS MOBILIZATION MODEL 10

11 PALM-BASED BIOMASS MOBILIZATION MODEL 2 Models: 1. POIC Biomass Collection and Processing Centre model. 2. Biomass Joint Venture cluster model. POIC BIOMASS COLLECTION AND PROCESSING CENTRE MODEL POIC Lahad Datu/Govt Invest in infrastructural development of the centre Govt as Facilitator: Sabah State Govt initiative, Malaysia Biomass Feedstock* from palm oil mills, plantations & other sources Biomass Collection & Processing Centre Other Biomass End users Biomass Investor (Purchaser & User) 11

12 (Option for capital investment) 08/09/2015 DISTRIBUTION PATTERN OF PALM OIL MILLS TO POIC BIOMASS COLLECTION CENTRE AND SUB CENTRES Note: a) Distance roughly to scale. b) 37 mills within 50 km radius of POIC c) 85 mills within 100 km radius of POIC. d) 113 mills within 150 km radius of POIC Legend Palm Oil Mills 50km Radius POIC Main Collection Centre 100km Radius Collection sub centres 150km Radius BIOMASS JOINT VENTURE CLUSTER MODEL Biomass Owners (Mills, Plantations) Contribution of biomass* [* To start with Empty Fruit Bunches (EFB)] JV Cluster (Board of Director) [Management Team] Govt as Facilitator: Agensi Inovasi Malaysia (Prime Minister s Dept, Malaysia) Govt Agencies for support & advice (e.g POIC Lahad Datu) Biomass Downstream Investments (biopellet, bioethanol, bio-chemicals etc) 12

13 WHAT DOES A BIOMASS JV CLUSTER LOOK LIKE Mill owner #1 Biomass supply: 120,000 MT 20% stake 10% JV stake Pellets Capacity: 100,000 MT Feedstock required: 100,000 MT Mill owner #2 Mill owner #3 Biomass supply: 240,000 MT Portfolio JV Biomass supply: 600,000 MT (Dry) 40% stake 40% stake Capacity: 100,000 MT Feedstock required: 500,000 MT Biomass supply: 240,000 MT 15% JV stake through value of biomass Bioethanol 90% Partner stake 85% Partner stake Partner #1 Partner #2 Source: Agensi Inovasi Malaysia (AIM), 2013 CONCLUDING REMARKS 1. Sabah is the largest oil palm growing State in Malaysia, producing large amount of palm oil and palm biomass for downstream industries. 2. POIC Lahad Datu offers a wide range of investment opportunities in palm oil and palm-based biomass downstream industries, especially in the biochemical sector as the major focus. 3. POIC Lahad Datu provides the needed policy support, basic and specialized infrastructure. 4. A key present focus of POIC is in determining the most efficient way to aggregate large amounts of biomass as feedstock for downstreaming. 13

14 COME AND DISCOVER POIC YOUR GLOBAL INVESTMENT HUB. We invite individuals and corporations to explore the various business opportunities in POIC especially in Palm oil downstream activities, Oil, Gas & Petrochemical, Manufacturing, Ship Building, Education, Commercial Development, etc For more information please contact : POIC Sabah Sdn Bhd 17th Floor, Wisma Perindustrian, Jalan Istiadat, Teluk Likas Kota Kinabalu Tel : (6088) / Fax: (6088) / Webpage: 14