By Zan Azlee
Whenever I think of start-ups and new entrepreneurial endeavours, the first thing that comes to mind are youths planning to start a skateboarding company, or a couple of rock t-shirt clad designers setting up a creative concept studio. And when I think of the agricultural industry, the first thing that comes to mind is my 70 year old Uncle Rahmat in Parit Pecah, Muar, helping to tend to my father’s kebun filled with durian, bananas and some palm oil.
And never shall the two meet… until I was asked to moderate PEMANDU’s Industry Speak panel discussion recently at Silver Spoon in Publika on the issue of ‘Sharing secrets on the business of agriculture’. The main objective of the panel discussion was to provide an insight of what it takes to get involved in the agricultural industry and how new players could see this as a viable business to delve into.
From left to right: Haji Ibrahim Saleh, Loi Tuan Ee, Zan Azlee (moderator), Shahnas Oli Mohamed and HS Wong.
There were four people on the panel which consisted of Loi Tuan Ee, managing director of The Holstein Milk Co., HS Wong, director and founder of DQ Farm, Shahnas Oli Mohamed, managing director of Natural Wellness Group of Companies, Haji Ibrahim Saleh, head of secretariat for delivery management office – Ministry of Agriculture and Agro-based Industries.
Each of them were chosen for unique and specific reasons which could contribute to a more holistic discussion. Wong, for example, made a name for himself as a corporate bigwig before friends in the industry he was in started suffering from what he calls ‘CEO disease’ (this disease consisted of heart attacks, high blood pressure, etc.), which eventually led him to the agricultural industry, specifically the organic food market. Starting DQ Farm, his operation focuses on producing organic food such as chicken and produce which are healthy and good for human consumption.
Loi, whose The Holstein Milk Co. produces the well-known Farm Fresh dairy products, also runs a ship that gives high importance to quality. And to ensure this quality, he needs to make sure that there is a set standard of procedures that is consistent throughout the company. This is especially important since The Holstein Milk Co. is a complete end to end company that sees them being involved in the farming right up to the distribution.
The lone female in the group, Shahnas Oli Mohamed, of Natural Wellness Group of Companies, also knows of quality too well. She specialises in natural drugs of which she exports to the international market, largely to the Middle-East region, hence has to follow strict international standards. And it wouldn’t be an all-rounded discussion if there wasn’t a representative from the Ministry of Agriculture and Agro-based Industries, Haji Ibrahim Saleh.
It can’t be denied that the agricultural sector factors in quite low in Malaysia’s GDP, only contributing about 7% of its total (palm oil and estate based industries do not fall under agriculture, in case you were wondering). This is a huge drop from the 1970s when it contributed 32%. However, judging the high standards that has been set by those in the industry, it was clear that those involved are big players. Hence, it can be intimidating for new players to break in.
That’s where Loi says the existing industry players need to play a role. Although his company is self-sufficient from production to distribution, he gives back to the industry by encouraging contract farming, whereby he engages independent dairy farmers at a premium price to help them sustain their operations and at a high quality.
“I prefer to use the term ‘synergy farming’ rather than ‘contract farming’ because it’s methods like this that create a win-win situation and encourages the growth and development of the industry,” agrees Haji Ibrahim.
Audience from various industrial backgrounds.
And it was obvious from the floor as well that many were interested in finding out how to penetrate into the industry. It isn’t as clear as the technology sector where all kinds of incubator programmes, grants and funding, as well as conferences are held on a regular and high profile basis. And this is where Haji Ibrahim and Shahnas were in unison in their beliefs that to maintain the high standards of the industry, entry barriers should remain high.
“If you have to commit yourselves, then it means you have to be serious about it and not just see agriculture as a quick way to do business,” says Haji Ibrahim.
“As much as I tell people to just start and do something, I also strongly believe that if you have a higher stake at risk, it means you will also be more motivated and have a higher drive to make sure you do it right,” concludes Shahnas.
So the agricultural industry might not be as easy as it seems for someone new to delve in. One needs to be determined, committed and serious to be a player. With that being said, this is the main reason why a committed decision to delve into the agricultural industry means that success is almost guaranteed and one will be ensured of a solid support system in the form of existing big players who are in it for the long run.