Kenaf farmers can expect to double their income

2008/08/22

Kenaf farmers can expect to double their income
BERNAMA

KOTA BARU, Fri.:

Kenaf farmers in the East Coast Economic Region (ECER) will double their income to about RM1,500 from RM750 a month previously with the launching of a Kenaf centre for collection, processing, packaging and distribution (CPPC) today.

“Today's event is significant as it brings the East Coast Economic Region (ECER) a step closer to poverty eradication,” said ECER Development Council chief executive officer Datuk Jebasingam Issace John at the launch of the centre by Prime Minister Datuk Seri Abdullah Ahmad Badawi.

The centre is a collaborative effort between Symphony Advance Sdn Bhd (SASB) and South Koreas Samsung Cheil Industries Incorporated to develop and export Kenaf polymer composites.

Kenaf is a plant whose stem produces a coarse fibre on the outer layer and a finer one in the core. The plant can grow to 1.5-3.5 metres and has a long history of cultivation for its fibre in India, Bangladesh, Thailand, parts of Africa and to a small extent, South-East Europe.

Present were Plantation Industries and Commodities Minister Datuk Peter Chin Fah Kui, Second Finance Minister Tan Sri Nor Mohamed Yakcop, Minister in the Prime Minister’s Department Tan Sri Amirsham A. Aziz, Chief Secretary to the Government Tan Sri Mohd Sidek Hassan and Petronas President and Chief Executive Officer Tan Sri Mohd Hassan Marican.

Kelantan Deputy Menteri Besar Ahmad Yaacob and Terengganu Menteri Besar Datuk Ahmad Said also attended the event.

At the same event, SASB was acknowledged as an ECER investor which will develop and expand the kenaf industry through a Shareholders Agreement with Majlis Amanah Rakyat (MARA).

Jebasingam said given that Kenaf is a hardy, non-labour intensive crop, farmers can supplement their income by participating in integrated activities such as growing corn, breeding fish or rearing livestock.

“The self-sustenance capability of the kenaf farm can be described through this example. The farmed corn can be utilised as animal feed while animal droppings can be recycled as fertilizer for the kenaf crop,” he said.

He said these modern, integrated and sustainable economic activities would create about 400 new jobs, contract farming, entrepreneurial opportunities, management of small-scale kenaf processing centres and feedlot systems.

“Due to the short maturity cycle of Kenaf of 100 days, farmers can harvest up to several times a year. It additionally helps ECER companies climb up the value chain, explore R&D and pitches Malaysias exports competitively,” he added.

Kenaf has been introduced as a farm crop under the ECER because of the fibrous plants huge potential. The plant can be processed into paper, clothing, building material, car accessories and bio-composites.

Under ECER, 10,000 hectares will be planted with kenaf in Bachok and Pasir Puteh in Kelantan and Setiu and Marang in Terengganu to increase the income of 10,000 tobacco farmers and to create more jobs.

As one of ECERs pioneer Kenaf companies, SASB is sourcing its initial Kenaf feedstock from the National Tobacco Board, the body tasked with encouraging tobacco farmers to switch to Kenaf farming in response to post-Afta liberalisation which will make Malaysias tobacco farming less competitive.

The company has also applied for 4,000 hectares of land in Kelantan to grow Kenaf.

“Kenaf powder is used in composite materials and we forecast the demand for kenaf worldwide to be huge, especially in composite materials,” said SASB managing director Iman Shah Ismail.

“This is because Kenaf is an environmentally friendly industrial plant and an organic material recognised by the Kyoto Protocol to mitigate global warming.

“When Kenaf is used in composite materials, companies can enjoy special tax incentives when it is exported to the European Union countries and the United States,” he said.

The increase in crude oil price had also resulted in the price hike of polypropylene and polyethylene. As such, the company predicts the demand for Kenaf as a substitute and composite material will increase.

Iman said SASB had invested up to RM3 million todate and would continue to invest as the size of SASBs investment was scalable, subject to the kenaf supply.

“There are already plans for more CPPCs. Our plan is not to build one big CPPC but many optimally-sized CPPCs near the kenaf farms,” he said.

According to Principia Partners, a market consultancy specialising in polymers, plastics additives and related markets, “Polymer composites produced from natural fibre are growing at significant double-digit rates, representing one of the major growth areas for plastics additives today.

“The market for these composites is projected to nearly triple in size during the next decade and will increase demand for the nearly US$100 million additives segment of this market,” he said.

The primary driving force for these new materials is economics since natural fibres are currently priced at one-third or less of the cost of fibreglass.

Compared to natural wood, polymer composites are more resistant to wear and tear and particularly to moisture.

SASBs core business is in mid-stream and downstream Kenaf processes and products. It is a part of the AqilQisti Group of companies, with operations in media, technology, agriculture and aquaculture industries.

Samsung Cheil Industries Incorporated is Koreas leading producer of fashion, chemicals and electronic chemical materials. Its major products are synthetic resins such as Acrylonitrile Butadiene Styrene (ABS), Polystyrene (PS) and electronic chemical materials for semiconductor and digital display.