Sarawak a Hotspot for Palm Planters

KUCHING: Sarawak, which is opening up large tracts of land for oil palm cultivation, has emerged as a “hotspot’’ for plantation investors.

With land for large scale agriculture projects in Peninsular Malaysia becoming scarce, established plantation companies from the peninsula are pouring into Sarawak to seek both state and native customary rights (NCR) land in a move to expand their estates.

Big conglomerates like Sime Darby Bhd and IOI Corp Bhd are among the several new investors in the state’s plantation industry, according to Sarawak Land Development Minister Datuk Dr James Masing.

He said the state government had approved more than 720,000 hectares (ha) of NCR land for oil palm projects to be undertaken by Sarawak, Sabah and peninsula-based plantation companies under the new development model.

Datuk James Masing … ‘The outlook for the oil palm industry is very good.

The approved land in 63 areas more than doubled the total 350,000ha recorded in 2008.

The new development model involves joint ventures between NCR landowners and plantation companies, which provide project funding.

The state-owned Land Custody Development Authority acts as the managing agent to protect the landowners’ interests in these projects.

“There are many more applications involving some 300,000ha of NCR land which are yet to be approved,’’ Dr Masing told StarBiz.

He said each NCR joint-venture project would cover a land size of 5,000ha to 20,000ha, of which 65% to 70% of the area was plantable.

It costs between RM7,000 and RM12,000 to develop one hectare of oil palm estate in Sarawak compared with RM6,000 and RM10,000 in the peninsula.

Sarawak is endowed with some 1.5 million ha of NCR land, largely idle or under-developed in the inaccessible interiors.

Most of the land is yet to be surveyed and is without titles.

Dr Masing said his ministry was slow to cope with the strong demand from investors and NCR landowners as it was bogged down by bureautic red tapes and manpower constraints.

He said it now took at least three years for a joint-venture agreement to be signed between the investors and landowners from the day of the submission of a development proposal.

“The time taken to create a landbank is at least two years. This is too long,’’ he lamented.

Dr Masing said the ministry was looking into ways to cut down red tape, streamline the procedures to appoint investors and create landbank as well as beef up manpower requirements, particularly in landbank creation.

His target is to reduce the time taken for project approval and joint-venture agreement signing to one year from at least three years now.

Dr Masing said because of the ministry’s shortcomings, there would be a shortfall in achieving the state government’s target of one million ha of planted oil palm estates by 2010.

Up to June 2009, Sarawak’s total planted oil palm area was 830,000ha (up from 780,000ha at Dec-2008), with the private sector plantations contributing 78%.

The balance comes from government agencies, like the Sarawak Land Consolidation and Rehabilitation Authority (48,000ha), Felcra (over 50,000ha), NCR new model development (50,000ha) and smallholders (10ha to 200ha).

The northern region along the Bintulu-Miri corridor maintains its lead, accounting for 54% of total planted areas. Sarawak’s biggest oil palm planters include Rimbunan Hijau Ta Ann, Samling, Tabung Haji and Boustead Group.

“The outlook for the oil palm industry is very good. I think the current crude palm oil (CPO) prices of between RM2,200 and RM2,500 per tonne are sustainable in the next few years,’’ Dr Masing said.

Source : The Star by Jack Wong


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