PETALING JAYA: The Palm Oil Industrial Cluster (POIC) in Lahad Datu, Sabah is a strategic long-term structural enabler for the state’s plantation ecosystem, strengthening logistics efficiency, policy-aligned downstream development and future value retention, says BIMB Research.
POIC Lahad Datu is an industrial park set up to boost the downstream palm oil processing, logistics and manufacturing activities.
It serves as a 4,400-acre hub for biomass, biorefineries and shipping, taking advantage of its location near the Brunei, Indonesia, Malaysia, the Philippines-East Asean Growth Area (BIMP-EAGA) and major palm oil plantations.
Based on a recent visit to POIC Lahad Datu, BIMB Research said for plantation companies with operational exposure in East Sabah, POIC would strengthen structural competitiveness by anchoring export infrastructure closer to feedstock.
It would also improve cargo aggregation and provide a scalable platform for downstream and biomass-related pathways.
From an investment perspective, the research house said POIC management highlighted that its development is execution-led and investor-driven, with capital deployment and land release calibrated to tenant demand rather than front-loaded expansion.
“This approach supports capital discipline and improves the sustainability of long-term returns, albeit with benefits accruing progressively rather than in step changes,” it added.
At the sector level, POIC reinforces Sabah’s role within Malaysia’s broader palm oil value chain by aligning infrastructure development with sustainability and biomass policy objectives.
Over time, this enhances supply-chain resilience, environmental, social and governance positioning and optionality for higher value-added participation, particularly for upstream-focused planters with strong Sabah and Sarawak footprints.
While benefits will accrue unevenly across companies, BIMB Research noted that POIC represented a positive structural backdrop supporting long-term growth, and strategic positioning for the plantation sector.
Meanwhile, BIMB Research has reiterated an “overweight” call on the plantation sector, with an unchanged crude palm oil price forecast averaging RM4,200 per tonne in 2026.
It also remained “positive” on upstream plantation players, which would benefit from structurally supportive industry dynamics and improving operational leverage while remaining selective on integrated players given the differing downstream recovery profiles.
The research house’s top “buy” pick remained Hap Seng Plantations Holdings Bhd
with a target price of RM2.50 per share.
