Palm oil project pays off for schools


Steady income: This oil palm estate in Gunung Besout, Sungkai, belonging to Semangat Suwa Sdn Bhd will be managed by Langkap 2012 Plantation Sdn Bhd over 30 years. Under the deal with Langkap 2012 Plantation, Semangat Suwa will receive annual payments of RM1.1mil for the first five years and RM5.1mil for the next 25 years. Seen here is Langkap 2012 Plantation managing director Lean Ah Too.

Nine schools in Perak to benefit over 30 years.

SLIGHTLY more than three years after planting works commenced on a 1,012ha-piece of land in Perak belonging to nine Chinese independent schools, it is now producing 160 tonnes of palm oil a month.

The yield, although a mere 3% of full capacity, is promising – given that just 202ha of the total area planted with oil palm can be harvested at the moment.

According to Langkap 2012 Plantation Sdn Bhd managing director Lean Ah Too, young trees typically produce fewer fruits.

“The fruits are also of lower grade. We need to wait for the trees to be at least five to six years old before their yield and quality become more consistent.

“But not to worry, we are on the right track,” said Lean, who recently took The Star on a tour of the vast oil palm plantation located some 90km south of Ipoh.

30-year payoff

The story of the schools’ journey towards self-sufficiency dates back to 2010 when the Perak government allocated the land in Gunung Besout, Sungkai, to Semangat Suwa Sdn Bhd – a company set up by the board of governors of SM Shen Jai, SM Yuk Choy and SM Poi Lam (all in Ipoh), SM Nam Hwa (Sitiawan), SM Yik Ching (Pantai Remis), SM Pei Yuan (Kampar), SM Hua Lian (Taiping), SM Sam Min (Teluk Intan) and SM Tsung Wah (Kuala Kangsar).

Semangat Suwa chairman Datuk Alan Chuah Chin Lai says the money from the oil palm venture will go to the nine schools, to pay for maintenance, utility bills and student scholarships.
Semangat Suwa chairman Datuk Alan Chuah Chin Lai says the money from the oil palm venture will go to the nine schools, to pay for maintenance, utility bills and student scholarships.
 

In 2012, Semangat Suwa entered a deal with Lean’s former company Sawit Langkap Sdn Bhd, allowing Sawit Langkap to cultivate oil palm on its land over a period of 30 years.

In return, Semangat Suwa would receive fixed annual payments of RM1.1mil for the first five years and RM5.1mil for the next 25 years.

Lean explained that even though the business partnership between Semangat Suwa and Sawit Langkap had broken up, he was still bound by the contract with Semangat Suwa and continued to honour the deal through his own company Langkap 2012 Plantation.

“Langkap 2012 Plantation will fulfil Sawit Langkap’s part of the agreement,” he promised.

Growing pains

Despite plunging crude palm oil prices and rising operational costs due to the Goods and Services Tax (GST) and the weakening of the ringgit, the 61-year-old planter who has over three decades of experience behind him is not concerned.

“I’m not too worried about the price of crude palm oil as our harvests are still small. Until the country’s market conditions improve, we just have to persevere,” Lean said.

Planting could only be carried out on 80% of the land because the remaining terrain is rocky while certain sections are too high, making accessibility difficult.

Lean, who spent over RM10mil in land clearing and planting works, has also run into unexpected problems such as wild boars from nearby forests invading the plantation and wrecking the oil palms.

“From the very beginning, it was not a money-making deal for me, nor was it for my former partner and all the people who helped make all this a reality.

Perak MCA chief Datuk Dr Mah Hang Soon, who initiated the plantation deal, is helping Semangat Suwa apply for tax waiver on revenue from its Gunung Besout venture.
Perak MCA chief Datuk Dr Mah Hang Soon, who initiated the plantation deal, is helping Semangat Suwa apply for tax waiver on revenue from its Gunung Besout venture.
 

“We knew it was going to be a heavy burden but it was a choice we made because of our social responsibility towards Chinese education and our community.

“It is very important for us to preserve our Chinese culture and heritage through education,” said Lean, who does not discount the possibility of having to fork out his own money to make the payments to Semangat Suwa.

Much appreciated

Semangat Suwa chairman Datuk Alan Chuah Chin Lai, in thanking all those who have helped pave the way for the nine schools to be self-sufficient, said the sight of the land planted with oil palm was truly one to behold.

The money generated from the venture, he added, would help the schools a lot.

“We have received money from the venture for three years now. The money is equally distributed among the nine schools and goes towards their maintenance, utility bills and student scholarships.

“With the assistance accorded us by our state government as well as the country’s many Chinese associations, we target to move our accounts into the black two years from now,” he said.

Perak MCA chief Datuk Dr Mah Hang Soon, who initiated the deal between Semangat Suwa and Sawit Langkap and personally saw the deal through, said Chinese independent schools produced many good students.

“These students of multi-ethnicity have contributed greatly towards the nation’s human capital,” he said.

“I am thankful to the various parties, like Lean, who were willing to take up the laborious effort. Their sacrifices and good deeds will be appreciated for generations to come,” said Dr Mah, who also thanked the state government for making the project possible.

Dr Mah added that the MCA was in the midst of helping Semangat Suwa apply for tax waiver so that more money could go to the schools.

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Business , palm oil , oil palm

   

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