Plantations & Agriculture
From The Report: Malaysia 2012
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Malaysia’s agricultural sector continues to be dominated by the export-oriented rubber and palm oil sectors, the latter of which has achieved primacy in recent years. Palm oil accounts for as much as 8% of Malaysia’s GDP alone, and the recent listing of major plantations owner Felda raised $3.1bn and earned cash payments for upwards of 100,000 families. The sector, however, is facing the challenge of transitioning from raw, small-scale agricultural production to value-added and technology-driven agribusiness. At the same time, concerns over food security are leading some to question the dominance of commercial over staple crops. This chapter features interviews with Bernard Giluk Dompok, Minister of Plantation Industries and Commodities, and Sabri Ahmad, CEO & Group President, Felda Global Ventures Holding (FGV).

Articles from this Chapter

Overview

Climbing the value chain: Far-reaching development plans are expected to result in steady expansion in the coming years
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Over the past few decades the plantations and agriculture sector has become a major contributor to economic growth in Malaysia. In 2011 the industry made up around 7.3% of GDP and employed around 11.5% of the workforce, according to the Malaysia Investment Development Authority (MIDA). Major commercial crops include palm oil, rubber, timber, cocoa, tobacco and pepper. For the past two decades palm oil and rubber have been Malaysia’s top agricultural exports, and in recent years the palm oil…

Analysis

Scaling up: Boosting productivity in rural areas
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A local labour shortage has had serious impacts on the agriculture sector. Just under 12% of the country’s total population is employed in the agricultural industry in some capacity, according to statistics from the Malaysia Investment Development Authority, with a great majority of these employees working as labourers in the palm oil, rubber, timber and cocoa segments. While this number is high for a country at Malaysia’s relatively advanced stage of development, this figure has been falling…

Interview

OBG talks to Bernard Giluk Dompok, Minister of Plantation Industries and Commodities
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Interview: Bernard Giluk Dompok How do you rate Malaysia’s regional competitiveness in the alternative fuels market, and what efforts are in place to increase its market share? BERNARDS GILUK DOMPOK: In March 2006 the government formed the National Biofuel Policy, which calls for the use of environmentally friendly, sustainable and viable energy sources to reduce dependency on fossil fuels. It also aims to enhance the well-being of all stakeholders in the agriculture and commodity-based industries…

Interview

OBG talks to Sabri Ahmad, CEO & Group President, Felda Global Ventures Holding(FGV)
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Interview: Sabri Ahmad What is the explanation for such high investor interest in plantation companies in 2012, and what will be the key value drivers going forward? SABRI AHMAD: In my view, there are three main reasons. Plantation companies supply commodities for food production. Food is a recession-proof business. We all know that during recessions, people will first sacrifice spending on investments in the house and purchase less discretionary luxury goods, whereas food cannot be easily sacrificed.…

Analysis

Gaining traction: The rubber industry is on the move
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Rubber production in Malaysia is set to double by 2020, provided the government’s ambitious development plans for the industry come to fruition. In 2011 the country produced nearly 1m tonnes of rubber, according to statistics from the Malaysian Rubber Board (MRB). Under the Economic Transformation Programme (ETP), production is expected to reach 2m tonnes per annum by the end of the decade, boosting the sector’s contribution to gross national income (GNI) to RM52.9bn ($17.06bn), up from RM18.5bn…

Analysis

Towards sustainability: Providing for the nation’s long-term food security
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Encouraging farmers to make better use of technology is perhaps the greatest challenge facing Malaysia’s agriculture authorities. Boosting technology take-up is considered integral to ensuring that Malaysia is food secure for the foreseeable future. Under the National Farm Mechanisation and Automation Plan (NFMAP), which was launched in January 2012 by the Ministry of Agriculture and Agro-based Industry (MOA), the state plans to implement a series of initiatives aimed at addressing a lack of…