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Great Potential for Biomass Industries in Sandakan – Phoong

Group picture together with the Minister Datuk Phoong Jin Zhe, Sandakan MP Vivian Wong, Datuk Anthony Lau and officers from MIDE and DIDR.

SANDAKAN : – Datuk   Phoong   Jin   Zhe recently visited Sandakan Bricks Sdn Bhd as part of his ongoing initiative to visit 50 local factories.

The Minister   of   Industrial   Development   and Entrepreneurship Sabah said this initiative aims to better understand  the  challenges  faced  by  Sabahan  manufacturers  and  explore potential solutions for sustainable industrial growth.

During  the  visit,  the  minister  was  briefed  on  the  company’s  operations, particularly their use of Palm Kernel Shell (PKS), sourced from local mills at a significantly reduced price, thanks to the Sabah State Government’s newly implemented biomass policy.

Sandakan Bricks Sdn Bhd currently produces around 3  million  bricks  per month, with 50% of its  production exported to Brunei.

PKS  plays  a  crucial  role  in  brick  manufacturing  by  generating  the  high- temperature heat necessary for production—temperatures higher than those achievable by other biomass materials, such as wood.

Datuk  Anthony  Lau,  owner  of  Sandakan  Bricks  Sdn  Bhd,  expressed  his appreciation   for   the   state   government’s   efforts   in   making   PKS   more accessible  to  local  manufacturers.

“Before  the  policy  was  introduced,  my partner and I were seriously considering halting the brick factory’s operations due to the high cost of PKS.”

“However, thanks to the reduced costs resulting from  the  implementation  of  the  biomass  policy,  we  are  not  only  able  to continue  operations  but  are  now  considering  expanding  by  building  a charcoal factory, ” he added.

This expansion could create an additional 20-30 jobs here in Sandakan,” said Datuk Lau.

The Sabah State Government’s biomass policy sets a 7.5% state sales tax on raw  biomass  material,  including  PKS,  when  exported  out  of  Sabah.

This encourages local mills to retain PKS within the state, reducing the price of PKS for local consumption by up to 40%.

This cost reduction enables local manufacturers to scale their operations, improve competitiveness, and grow sustainably.

Earlier  this  year,  Next  Green  Global  Berhad  signed  an  MOU  with  Sawit Kinabalu  to  invest  in  and  establish  a  Green  Technology  Park  (GTP)  in Sandakan.

This investment, driven by the biomass policy, will use palm oil biomass, such as empty fruit bunches (EFB), to produce green products like pulp and paper, creating more job opportunities and business prospects in the region.

“ I  am  pleased  to  see  that  the  biomass  policy  has  not  only  attracted investment   into   Sandakan   but   has  also   positively   impacted  our   local manufacturers,”  said  Phoong.

“Sandakan  has  great  potential  for  biomass industries  to  flourish,  and  I  will  continue  working  to  ensure  that  Sabah’s biomass sector has the tools and resources needed to thrive.”

The ministry will continue collaborating with investors and relevant agencies to  attract   more   investments   into  Sandakan,   benefitting   both  the   local economy and the people of the region.

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