From 1965 to 1967, in addition to bringing to completion our programmes for planting, roads and buildings, we were also very preoccupied with the erection of our factory. At that time, the only company which could build a standard turn-key palm oil mill on contract, was Messrs Stork of Amsterdam.
CDC in Tawau had already commissioned them to build their factory and it had been opened – the first palm oil mill in East Malaysia – the previous year. The Stork’s erection team arrived on their estate, built a standard palm oil mill to a tried and tested design, and departed once it was commissioned.
I was keen that we should follow their example and get Storks to install one of their off-the-peg plants on Tungud. I felt that our management team had enough to worry about without getting involved in all the problems of erecting a factory ourselves. It was not to be, however.
It was decided in London that we would build our own factory to a Plantations Group design. This was, I grumbled, typical of Plantations Group. Not only did they choose a flood-liable, leech-infested swamp in the most inaccessible area they could find for our first project in Sabah, now they wanted to complicate matters further by asking us to build the factory!
The chairman, David Martin, explained their thinking to us with his usual tact and forbearance. Unilever’s engineers had, he said, been involved throughout the 1950s in experimental work at a mill at Mongana, in what was then Belgian Congo. This had resulted in several innovative improvements in the extraction process and in the design of palm oil mill machinery.
It was felt, correctly in the light of subsequent political events in Congo, that much of this work – written–up in what came to be known as the Mongana Report – might be lost after Congo got independence. The Board had decided therefore that as many as possible of the findings at Mongana would be incorporated into the Tungud factory.
In several ways it would be a departure from past designs and it was necessary therefore that we should build it ourselves. Unilever hoped that the Tungud Mill with its many processing improvements could become the first of the next generation of palm oil factories throughout the industry, and that it might result in some improvement in the quality of the palm oil exported.
John MacDonald, the man they selected to do the work at our end, had operating experience in Unilever palm oil factories in Nigeria and Cameroons. He was an extremely competent engineer, as he had already demonstrated to us by erecting the Tungud bridge.
In view of the remote situation of the estate, he was faced with a formidable task. The lead times were of course horrendous. The steel-work for the buildings came from Japan, the boilers from UK, the turbines from Germany, the presses from France, and the centrifuges from Westphalia in Sweden.
From the date of designing and ordering these items, to the time they were assembled in Europe, shipped to the East, unloaded in Sandakan, put on a scow to be taken up the river, and finally transported by tractor from the riverside to the factory site, could be as much as three years. We made great use of network analyses at both ends of the operation to ensure that each major item of plant was on site at the time it was needed, but not too long beforehand.
It was a complex and time-consuming business. As MacDonald’s right-hand man we were able to recruit the services of a young Chinese mechanical engineer, Lau Chung Fung, who had worked for Shell in Miri. After the construction was completed, he took over as Chief Engineer. He and his wife Elsie were popular figures in the community.
The company was very fortunate in the calibre of the local engineers we were able to recruit within Malaysia. My own view is that, in general, they were technically superior to many of the expatriate engineers we recruited for our plantations in other countries.
When Lau moved back to West Malaysia, he was replaced by Peter Yee, a brilliant engineer who was to become in due course the Technical Director of the local company. Yee was sent to Europe to study automation techniques in some of the most modern Unilever factories and, on his return, was able to introduce a degree of automation to our process systems both at Kluang and Pamol Sabah.
As it happened I was being unfair to our Engineering Department in London when I complained about the cost of the factory. It was finally completed within the original estimated budget. It was indeed more expensive than an off-the-peg standard factory.
One reason for this was that, with their long experience of building and running mills in remote parts of Africa, UPI Engineering Group were conscious of the necessity of building-in sufficient stand-by units right at the outset. This avoided the long wait for spare parts to be sent out from Europe whenever a breakdown occurred.
When I was the Chairman of UPI in London many years later, Ho Sui Teng, then the GM of Tungud, reported the achievement of an astonishing record. The factory had milled a million tons of bunches over 20 years without a single day being lost to breakdowns, other than planned stoppages for maintenance. I doubt if many palm oil factories in the world could make that claim.
The factory was finally opened on target, on Nov 15, 1967. The event was widely reported in the Malaysian Press. The opening ceremony was attended by Lord and Lady Cole, Sir Michael Walker, the British High Commissioner from Kuala Lumpur, and many of our friends and colleagues from the Sabah plantation industry as well as by representatives of the state government.
With the opening of the factory and the planting up of 10,000 acres of oil palm, we had now completed the original development. Lord Cole was delighted to learn that, in spite of the many vicissitudes encountered, we had done it well within the original Capital Grant.
While congratulating us on our achievement, he reminded us that, now that we had completed the first phase of the development within the budget, the next thing we had to do was to show that we could produce a return on the shareholders’ investment.
This proved, however, to be a much harder task than any of us anticipated.
This is the second part of an edited chapter from the book published in 2007. It can be purchased from the Incorporated Society of Planters; email: email@example.com