SAMLING EXPANDS INTO THE BIOMASS INDUSTRY WITH THE OPERATION OF TREEONE MEGAPELLET PLANT IN BINTULU
Samling’s four-year journey into the biomass arena has finally borne fruit after years of intensive study followed by months of delays caused by the Covid-19 pandemic. But the unrelenting perseverance and determination of the Samling team to see through this dream has finally prevailed.
Born of a desire to make full use of upstream wood resources from the company’s natural forest concessions and forest plantations, the TreeOne Megapellet plant in Bintulu began inception as an idea from our downstream team based in Miri.
The team at Samling subsidiary TreeOne Megapellet Sdn Bhd comprised Yap Fui Fook, General Manager (Downstream Manufacturing), Lim Song Kuan, General Manager (Finance & Special Projects), Zion Kong Yik Seng, Marketing Manager, and Yew Ee Hui, Factory Manager.
“We had to figure out how to maximise the use of our forest plantations, which are primarily of the acacia and eucalyptus species, as most were reaching maturity. There was also the issue of wood residue from logging and wood processing activities. How could we increase our utilization of such residue?
“First, we had to study the suitability of the acacia and eucalyptus species and whether wood pellets produced from this species could meet international standards as well as the market potential for our wood pellets,” said Yap.
BEGAN IN 2019
After months of careful study, during which time efforts were also made to source potential clients, construction work for the wood pellet plant in Bintulu began in 2019.
The decision to locate the plant in Bintulu was perhaps the easiest one given the port facilities available there as well as the storage capacity and wood pellet bulk loading capabilities.
With the forest plantations in Sarawak providing raw materials, the port, storage and loading facilities provided at the Bintulu Port ensured that Samling was able to provide end-to-end logistics for its wood pellet production.
It was vital that the team identified and sourced the right technology and machinery primarily the dryer & pelletiser systems, to ensure that the wood pellets produced could meet the industrial specifications as required by mature wood pellet-consuming countries.
Rotex Line & Andritz Line
This resulted in the emergence of two operating lines – the first utilising Chinese technology and machinery known as the Rotex Line, and the second utilising European technology and machinery known as the Andritz Line.
Covid-19 Pandemic Struck
After careful study, everything had been put in place. But just as factory construction and machinery installation were picking up pace, the Covid-19 pandemic struck which resulted in delays to the completion and commissioning of the two lines.
“It was a bit worrying, because we had already locked in a major Japanese company as an offtake of our production and shipment was due to begin in 2024,” said Lim, adding that Samling CEO Lawrence Chia was instrumental in locking in the Japanese firm, which is a major independent power producer in Japan.
Thankfully, despite all the challenges, the Rotex Line was commissioned and began operations in February 2022 with a full target capacity of 4,000 metric tonnes (MT) of wood pellets a month.
According to Zion, the plant’s current production is to meet spot market shipments to Korea.
“However, with the European Andritz Line Production beginning operation in June 2022, we expect to start bulk shipments before end of the year", he said, adding that the following year in 2023 will be used to increase production gradually in order to meet the off take agreement with the Japanese company by 2024.
“The team is looking at reaching a production capacity of 10,000 MTs a month in 2022. We were very fortunate because the operationality of both lines came at an opportune time as the price of wood pellets had increased by roughly 40% as compared to 2021" said Zion.
The wood pellet plant represents Samling’s first foray into the biomass industry, itself an industry very much in its infancy as far as Malaysia is concerned. With over 80% of global energy is still sourced from fossil fuels such as natural gas, coal and fuel oil, biomass energy contributes an insignificant amount to the country’s total energy supply.
LABOUR & SKILL LEVEL ISSUES
In spite of the initial and qualified success of TreeOne, challenges remain in the form of labour issues and skill levels of the local workforce.
Because there are no available courses for the skills required for the biomass energy industry, training is largely done “on-the-job”, which means retention of workers and regular work attendance is vital in order to build up a skilled workforce.
“Unfortunately, there is an issue with retention as far as the local workforce is concerned. We have a high turnover rate because we are competing with other sectors for manpower such as the Industrial hub in Samalaju.
“As far as Samling is concerned, it is imperative that we provide training for the local workforce because we see the biomass industry as one with plenty of potential.
“It would be of great benefit to locals if they were able to gain early training so that they are well prepared and in demand when the industry expands,” said factory manager Yew.
Biomass is an energy for the future and is coming more and more to be seen as a “greener” form of energy due to its zero CO2 emission. While there is great potential for biomass energy from oil palm waste as well, the logistics that are involved mean that much more study and planning is still required.
Samling realises that there is still a long way to go before their foray into the biomass industry can begin to bear real fruit. “We will take it one step at a time and our initial aim of fully maximising our wood resources has been achieved. Of course, we would like to expand into the palm oil sector as well where waste from palm oil production can also be utilized and converted into biomass energy.
“That is the next level we are aiming at. For now, we are just happy and proud to have stepped into the biomass industry and at the same time, to contribute in helping the country transition to biomass fuel in a bigger way,” said Lim.
“We also hope that with better marketing and publicity, more people and especially students will come to learn of biomass energy and that this will lead to greater awareness and interest in the industry,” added Yap.