Golden Hope eyes local ally for palm oil distribution

REPORTS FROM THE MPOB INTERNATIONAL PALM OIL CONGRESS (PIPOC) 2005

Golden Hope Plantations Berhad, one of the top Malaysian firms in oil palm plantations and refinery business, is considering marketing and distribution of palm oils in India.

"India is a major market and we do not wish to lose it to a low-cost producer, that is, Indonesia. We thus, are preparing a marketing and distribution business plan for the market and will collaborate with an Indian partner," said Dato Sabri Ahmed, group chief executive, on the sidelines of the Malaysian Palm Oil Board (MPOB) International Palm Oil Congress (PIPOC) 2005.

Ahmed said, "We have been exporting cargoes, largely on freight on board basis. But now, we intend to set up a storage base in the south Indian ports such as Kakinada (in Andhra Pradesh), Chennai (in Tamil Nadu). With the storage base in place, we can venture into marketing and distribution business."

He, however, did not divulge any further information or the Indian partner's details, saying, "The feasibility study is in its final stages. We will sign the deal with the partner soon and introduce our brand for business clients."

In 2004-05, the group's turnover was 3.34 billion Malaysian ringgits (approx. US $1 billion) versus 2.80 billion ringgits in 2003-04. Apart from India, the group's other major edible oils markets are South Africa, the Netherlands and Pakistan.

The group has been keen to set up refineries in the overseas markets and has already set up one in South Africa. Ahmed said, "We were eyeing one in India also, but there are already various multinationals which have gone that path. Thus, we decided to go only for marketing and distribution.

Ahmed, who is also the chairman of the Malaysian Palm Oil Association said, "The Malaysian palm oil sector is fighting labour shortage, limited availability of land, smear campaigns and competition from low-cost producer" (that is, Indonesia).

Towards this, the sector would require certain strategies like productivity increase, investment in research and development, focus on marketing and distribution, introduction of value-added products, maintain high-quality standards, cut down dependence on labour and cooperate with Indonesia for upliftment of the sector.

In 2004, Malaysian oil palm plantations were estimated at 3.9 million hectare, producing 14 million tonne of palm oils.

(The correspondent's trip was sponsored by Malaysian Palm Oil Promotion Council)