- At the Sarawak State Assembly
KUCHING: The state government will set up a special purpose vehicle (SPV) to identify commercially viable agriculture businesses for investment purposes.
Deputy Chief Minister Datuk Amar Douglas Uggah said this was in line with the state’s new direction to have agriculture businesses developed and managed by corporate entities.
“By giving the corporate sector a bigger role in developing and managing commercial agriculture, we can ensure commercial viability while reducing the financial burden on the government,” he told the state assembly in his winding-up speech yesterday.
Uggah, who is Modernisation of Agriculture, Native Land and Regional Development Minister, said the proposed SPV would bea new corporate entity created under an existing state statutory body.
He said the new body would subsequently form a subsidiary company to manage and operate agriculture businesses.
“The SPV may finance the business either from its own resources or it may form joint ventures with suitable private partners.
“A key feature of the SPV business model is that it will divest itself of its equity in the venture once the business becomes successful and achieves sound financial footing.
“At that point, the equity belonging to the SPV would be offered at par value to cooperatives or business organisations formed by the participating farmers and landowners,” he said.
He added that the state government would provide a seed grant or venture capital of RM100mil to enable the SPV to function and operate.
He said the funds would be used by the SPV as investment capital to set up new agriculture businesses.
Uggah also said the state government planned to set up the Sarawak Agriculture Products Export Corporation to manage agriculture exports.
He said a dedicated agency was needed for this in view of the multi-faceted and complex nature of exporting agriculture products.
“The corporation is expected to be the gateway for the export of all agriculture products from the state.
“It will make greater use of information and communication technologies in linking producers with buyers.
“With the establishment of the corporation and application of ICT, agriculture products from corporate entities, entrepreneurs and smallholders can have better access to overseas markets,” he said.