FOR plantation conglomerate Kuala Lumpur Kepong Bhd (KLK), the 61st Merdeka Day celebration under the new Pakatan Harapan government represents great hope to all Malaysians.
According to KLK chief executive officer Tan Sri Lee Oi Hian, Malaysia is a multiracial country with a rich cultural heritage, harmony and racial integration, although this has eroded in the last decade.
Hence, the new administration brings fresh hope to the country with its sincere and energetic team driven by justice and the rule of law.
“With the necessary checks and balances being reconstructed, our nation’s confidence in the future will be renewed,” Lee notes.
As for KLK, he says the group will complement the new government’s vision by making more investments, developing skill sets in its human talents and living up to its social responsibility to society.
The KLK Group is one of Malaysia’s leading and most iconic plantation-based multinational companies with a history of over 100 years.
Established in 1906 under the name Kuala Lumpur Rubber Company Ltd (KLRC), the entity was incorporated in London and listed on the London Stock Exchange a year later.
Lee’s father and KLK founder chairman, the late Tan Sri Lee Loy Seng, had the foresight to gain control of KLRC in 1970 – which was by then renamed to Kuala Lumpur-Kepong Amalgamated Limited (KLKA) – and brought the listing back to Malaysia.
“He (Loy Seng) walked the talk by personally visiting all the estates, staying with the managers, getting to know their families and building a solid foundation for us to grow.
“Today, we are fortunate to have successfully invested in Indonesia with hectarages slightly more than in Malaysia and built downstream global oleochemicals businesses,” adds Lee.
To date, KLK has a market capitalisation of about RM26.4bil on Bursa Malaysia.
Through various strategic acquisitions and sound management, the group’s plantation land bank now stands close to 270,000ha sprawling across Malaysia, Indonesia and Liberia.
Since the 1990s, the group has diversified into resource-based manufacturing (oleochemicals, derivatives and specialty chemicals) and vertically integrated its upstream and downstream businesses.
It has expanded its manufacturing operations through organic growth, joint ventures and acquisitions in Malaysia, China, Switzerland, Germany, the Netherlands, Belgium and Indonesia, resulting in internationally scaled oleochemicals operations.
The 1990s also saw the group capitalising on the strategic location of its land bank in Peninsular Malaysia by branching into property development.
According to Lee, the decade-old oil palm plantation sector in Malaysia has had a tremendous impact on the country’s economy, contributing export earnings in excess of RM70bil for palm products.
The sector is also a huge multiplier, generating many supporting industries and its widespread sharing of the wealth generation.
For example, smallholders – whether directly or indirectly through government agencies such as Federal Land Development Authority (Felda) – form about 50% of the local plantation industry.
The country’s economy was built on rubber and oil palm, and has since expanded to include downstream industries such as specialty fats, oleochemicals and gloves.
Given the dynamics and diversity of the oil palm sector, Lee says there are several challenges such as the almost stagnant yields, rising wages and high dependence on foreign labours that threatens the competitiveness of the industry.
“We greatly need an increase of at least 20% in both the yields and labour productivity nationwide,” he adds.
He also notes that the sector has reached a stage where it has “to change or be changed” and “there are no two ways about it”.
“It can be done and has to be done, and time is not on our side.”
On how KLK has managed to overcome its challenges so far, he says the company has been fortunate to have the support of a loyal team with integrity, which is “like a family with many colleagues serving for over 30 years”.
“They live and breathe the KLK DNA,” adds Lee.
Furthermore, almost all the company’s estate workers are earning more than the minimum wage with free benefits in housing, medical and other basic amenities.
At the same time, KLK must prepare itself to be ahead of the curve in attracting both local and foreign workers by enabling them to earn much more with less effort.
“The focus is on using in-field machines to eliminate the tiring task of bringing out the (palm fresh fruit) bunches, which tend to weigh 20 kg each.
“We now have a host of innovative machines with impressive results of near doubling our per man day productivity.
“There is no single magic bullet but as every task is being carefully rethought, the combined outcome is encouraging,” adds Lee.
Similarly, the oil yields, which are much below the planting materials’ potential, can be significantly increased through detailed management in execution, lessening crop loss and walking the fields.
Hence, KLK’s journey to achieve six tonnes of oil per hectare and 20% reduction in labour is ongoing, and the company aims to reach those targets in three years’ time.
For new planters keen to emulate the success of KLK, Lee says: “Being a successful plantation manager requires one to be a Jack of all trades in labour handling, have knowledge in agronomy, machines, resource allocation and planning, innovation and interest in this challenging but highly respectable career.
“It is important to have a compassionate heart, humility, love for people and joy for their development.
“While it may seem like a lot, it is truly a fulfilling role when one has the right attitude to make it work,” he concludes.
More stories: Star Special - National Day 2018
Already a subscriber? Log in
Get 20% OFF The Star Digital Access
Cancel anytime. Ad-free. Unlimited access with perks.
