KUALA LUMPUR: The Malaysian Indian Entrepreneur Cooperative Ltd, which was founded in 2010, is strengthening its income growth by investing in the palm oil industry.
According to its chairman, Madhu Marimuthu, the cooperative was targeting to invest about RM20mil to RM30mil through joint investment with members.
“For starters, we are looking at about 2,000 acres of land and it would be either in Malaysia or Indonesia,” he said, adding that it planned to venture into the industry within a year.
Madhu explained the investment was part of the cooperative’s mid- and long-term plans.
“We see the palm oil industry as a sustainable business for a long period of time with an average return of between 12 and 15%,” he said at a forum entitled “Investing in palm oil: Opportunities and networking” organised by the co-operative on Thursday.
The forum panelists included palm oil industry expert M.R. Chandran as well as Rabobank International country business director for Malaysia Kao Chee Ming, Malaysia Palm Oil Promotion Council deputy chief executive officer Dr Kalyana Sundram and Chellam Plantation Group managing director Venkata Chellam.
The three-hour forum, among others, allowed the attendees to engage with experts in the palm oil industry on issues such as investing in the palm oil industry, the related risk and opportunities as well as networking opportunities.
The panelists agreed that land limitation, lack of human capital and management capabilities were the main challenges facing the industry now. They noted the industry has a lot of opportunities but the risks are also high. Despite the challenges, Madhu remains optimistic on the cooperative’s plan to invest in the industry due the increase in demand for vegetable oils and their lack of supply. “The main risks in the industry is a good management team and the work force, thus we want to mitigate the risks through partnerships,” he said.
Madhu explained the cooperative had already talked with a state government to acquire the land.
“Some of our board members already have the expertise in this industry as well as interested parties who are keen to have a joint venture with us,” he said.
The cooperative has almost 100 members and plans to invest in properties, Ar-Rahnu pawn shop franchising, initial public offering shares, venture capital funds as well as investing in the palm oil industry.
There are almost 836 registered cooperatives in the state, and some of them had ventured into small-scale oil palm plantation, grocery shop business or the services sector.
Source : The Star