R&D issues in commodity sector should be addressed intensively, says Bernard Dompok

PETALING JAYA, Jan 17 (Bernama) -- Research and development (R&D) issues related to the production of new and niche value added products in the commodities sector should be addressed intensively to ensure long-term resilience of the sector, says Plantation Industries and Commodities Minister Tan Sri Bernard Dompok.

He said the industry has to transform itself from being merely a producer of semi-processed products into a manufacture of new value-added products with a market niche of its own.

"The emphasis on the production of value-added products are highlighted under the National Policy 2012-2020, where the export of commodity products are expected to reach RM242.6 billion," he said in a luncheon speech at the 14th Malaysia Strategic Outlook Conference 2012 here today.

In line with the policy, Dompok said he expected commodity products to remain as a pillar of the Malaysian economy in years to come through the perspective of generating exports earnings and domestic employment.

"The government will continue to pursue the approach towards product innovation not only in the food but also non-food sectors," he added.

Dompok said new business opportunities would open up for entrepreneurs in Malaysia owing to commercialisation efforts.

"Major challenges posed in the upstream sector is centered on increasing crop yield as there will be no further expansion of planted areas because Malaysia has made a commitment to preserve at least 50 per cent of its forest covering.

"The planted area by the commodity sector in 2010 was 5.9 million hectares and is envisioned to increase by only 1.6 per cent, annually, to 6.9 million hectares by 2020.

"As such, it is pertinent that we focus on increasing yield on existing planted areas via the production of better yielding planting materials, replanting programmes and improvements in agricultural practices," he said.

Export of commodity-based products between January and October 2011 was valued at RM118.2 billion, up 28.1 per cent, compared with the same period in 2010.

Commodity-based products that recorded increased exports during the ten-month period included rubber products (RM27.3 billion, +28.2 per cent), cocoa products (RM3.5 billion, +1.4 per cent) and pepper products (RM224 million, +42.3 per cent).

In the case of timber products, Dompok said the crisis in Europe resulted in exports declining to RM16.5 billion from RM17 billion exported in the same period in 2010.

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