LOW profile plantation company Tanah Emas Corp Bhd is set to become one of the leading providers of green waste fertilisers in the oil palm sector in the country as well as in the region with the acquisition of a 51% stake in bio-technology firm Gagnar Bio-Tech (M) Sdn Bhd.
According to sources, the acquisition of the oil palm waste management technology based on green waste will further enhance Tanah Emas' business operations in the country and open more markets for it.
“At present, oil palm plantations use compound fertilisers. With the acquisition of this technology, which manufactures fertilisers using green waste only from empty fruit bunch and palm oil mill effluent, there is a huge potential market for the company to tap into, locally as well as regionally.
“Currently, there are 400 oil palm mills in Malaysia and with the implementation of this technology, Tanah Emas - if it secures the deal - is expected to churn out pre-tax profit of about RM700,000 per mill. The company is also looking at Indonesia as a potential market,” the sources told StarBiz.
The sources added that Tanah Emas was looking into China especially Beijing, Guangdong and Shenzhen to start manufacturing the green waste fertilisers.
Among the benefits of using green waste fertilisers is that it improves top-soil structure, balances the soil pH and reduces soil salinity, provides all essential nutrients and increases soil microbial activity.
Compared with other generic organic fertilisers, the green waste organic fertilisers had a higher quality in terms of consistency and unlike organic animal waste fertilisers, it did not contain high heavy metal content, the sources added.
Tanah Emas in a statement to the KLSE yesterday said it bought a 51% stake in Gagnar from vendor Yap Yue Nan for RM3.185mil cash and the assumption of liabilities in Gagnar amounting to RM6.44mil.
The proposed acquisition would be financed by the company's internally generated funds.
The liabilities of RM6.44mil to be assumed comprise RM3mil for the subscription of 3 million shares in Gagnar's subsidiary Hoest (S.E.A.) Sdn Bhd by Gagnar, RM2mil for the subscription of 2 million shares in Hoest (S.E.A.) by the minority shareholders of Hoest (S.E.A.) and RM1.44mil for the repayment of advance from a shareholder of Gagnar.
The rest of Cagnar's shares are owned by local businessmen. Gagnar currently owns a 60% stake in Hoest (S.E.A.), which in turn has a 60%-owned subsidiary in China called Hoest (Lian Yun Gang Corp) Pte Ltd.
The China operations are involved in the manufacturing of organic fertilisers for vegetable farming using padi and wheat stalks to compost.
Hoest (S.E.A.) has a paid-up capital of RM5mil. It is involved in the manufacturing of organic green waste fertilisers and has a manufacturing plant in Lundu, Sarawak. Its manufacturing processes conform to the highest quality Australian Standard, AS 4454-1999. Its products are sold under the brand Greenlife.
Tanah Emas at present has about 6,830ha of oil palm plantation and an oil palm mill in Sandakan, Sabah.