KOTA KINABALU: Sabah is set to earn less from the palm oil sector for the second half of this year due to increasing labour costs as well as volatile crude palm oil (CPO) prices.
Chief Minister Datuk Seri Hajiji Noor said the industry was facing tough times because of the rise in wages as well as higher fertiliser and operating costs.
He added this situation was worsened by the weekly fluctuation in CPO prices, something which is beyond the control of industry players.
“At this time with CPO prices ranging between RM3,500 and RM4,000 per metric tonne, it will result in less income for Sabah compared to the earlier part of 2022.
“Hence, it is vital that the board of directors and management teams of government-linked companies (GLCs) involved in the palm oil industry carefully monitor matters related to operational cost and staff productivity,” he said when chairing the 137th Sabah Softwoods Bhd board meeting at his office in Menara Kinabalu here yesterday.
On the company, the Chief Minister said Sabah Softwoods has performed well in the first two quarters of this year.
“I am proud after being informed that Sabah Softwoods’ accounts from early this year to now have shown increment in profits due to good CPO prices, although the production of oil palm fresh fruit bunches did not meet targets.
“I want the board of directors and management team to find ways and means to resolve the shortage of labour as well as logistical challenges that have impeded the production of oil palm fresh fruit bunches,” he said.
Hajiji, who is also Sabah Finance Minister, was optimistic that Sabah Softwoods, which has recorded higher income and profit this year, will be able to pay higher dividends to shareholders besides providing more benefits to its staff in terms of wages and bonuses.
He also wanted the board and management of the GLC to strive to perform better in future as well as move forward as a company by using all the resources available more proactively.
Hajiji also congratulated Sabah Softwoods on its 50th anniversary which will be celebrated next year, and expressed the hope that the company will continue to contribute to the state.
Earlier, Hajiji launched the 50th anniversary logo, accompanied by Sabah Softwoods chief executive officer Datuk Mohd Daud Tampokong and Yayasan Sabah director Datuk Ghulamhaidar Khan Bahadar.