Latest news with #MPOBPalmOilTechnologyTransferProgramme
New Straits Times
4 days ago
- Business
- New Straits Times
Ministry to engage with oleochemical firms over SST imposed on palm kernel oil
BANGI: Plantation and Commodities Ministry will engage directly with industry players to ensure Malaysia's oleochemical sector remain competitive following changes to the sales and service tax (SST). Its minister Datuk Seri Johari Abdul Ghani said the changes had sparked concern among industry players, with some expressing negative feedback over the potential impact on operating costs and Malaysia's competitiveness in the global market. "We want to identify which specific areas are affected. Because SST is a domestic system, I have told the ministry not to react immediately to the complaints. "Instead, we must engage with the industry and understand the real situation," he told reporters at MPOB Palm Oil Technology Transfer Programme (TOT) 2025. Beginning July 1, palm kernel oil - a key input for oleochemical production - will be subjected to a five per cent sales tax. Johari said raw materials meant for export are not subject to SST, but acknowledged the need to assess if certain components of the local value chain are unduly impacted. He said policymaking should be based on insights from those directly involved in the industry, not external voices. "The reality is, no one likes paying tax and that is normal. But we need a functioning tax system to sustain the economy. "At the same time, we must evaluate its impact on national competitiveness, and that is what the ministry will be focusing on," he added. CIMB Securities recently said Malaysia's oleochemical sector could face increased input costs as palm kernel oil will now be subjected to SST. The firm said the revised tax also applies to refined, bleached and deodorised palm kernel oil and palm kernel shell, which have been reclassified under the expanded SST framework, affecting 4,800 Harmonised System Codes. "The five per cent sales tax could erode the competitiveness of Malaysia's oleochemical industry by increasing raw material costs, although some of the additional cost may be passed on to buyers," it said in a note. The oleochemical sector contributed 24 per cent of the export value of Malaysia's palm oil products, amounting to RM27.5 billion in 2024.
New Straits Times
4 days ago
- Business
- New Straits Times
Govt urges closer industry ties with MPOB to boost palm oil R&D
Previous Next BANGI: The government is inviting industry players to collaborate closely with the Malaysian Palm Oil Board (MPOB) to advance research and development (R&D) in strategic areas of the palm oil industry. Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani said enhanced collaboration with MPOB would lead to the commercialisation of more innovations, benefiting both entrepreneurs and the agency. "When entrepreneurs are confident in their R&D, about 70 per cent of it can be commercialised," he told reporters at the MPOB Palm Oil Technology Transfer Programme (TOT) 2025, here today. "When that happens, they benefit, and so does MPOB, which can earn royalties for endorsing these innovations," he added. In his speech, Johari said one of MPOB's initiatives is to collaborate with Kuala Lumpur Kepong Bhd's subsidiary KL-Kepong Industrial Holdings Sdn Bhd, SALCRA in Sarawak and the Johor State Agriculture Corp to commercialise animal feed technology. He said this initiative has the potential to significantly reduce import dependency and ensure the resilience of the local supply chain. Johari added that MPOB will explore research into developing eco-friendly palm-based products to replace conventional, non-sustainable alternatives. He said palm-based transformer insulating oil is currently being considered by Tenaga Nasional Bhd as a replacement for petroleum-based transformer oil in the country's power substation network. "Palm-based transformer oil has market potential estimated to reach a value of US$287 million by 2030," he said. To date, the commercialisation of MPOB technologies has generated more than RM5.9 billion in market value, contributing to operational efficiency and product value enhancement across the palm oil sector. "I am confident that the MPOB TOT Programme will benefit industry players and all attendees by providing an opportunity to interact with technology inventors and research officers.
