What role do plantation industries play in Malaysia’s Economic Transformation Programme (ETP)?
AYOM: The plantation industry is one of the biggest sectors in Malaysia’s economy. It contributes substantially to Malaysia’s export revenue. As far as the Economic Transformation Programme (ETP) is concerned, there are great prospects for future expansion. Growth in production and value by 100% is possible. It is a great source for employment, and provides opportunities for further economic growth.
What role does the pepper industry play in employment?
AYOM: Pepper is a very much a smallholder crop, but it provides employment for 67,000 people. This includes owners, operators, part-time farmers, and seasonal labourers. Currently, pepper production is basically based in Sarawak. We are expanding to other states such as Johor, Perak, and Sabah. Currently, 95% of the pepper production in Malaysia is from rural areas in Sarawak. These rural areas are very far from the market, making it impossible to plant perishables. Having a product that is storable, so farmers can wait to sell at a desired time or price, is important. It is a very rural crop and it provides sustainable living for the people in rural areas.
Who are the largest export partners for the Malaysian Pepper Board? What volumes do you expect to see in the coming year?
AYOM: Our largest export market is Japan. Korea, Taiwan, and Europe are also large export partners of ours. In the last five years, the Chinese market has grown substantially. It has the potential to be a large prospect for us. For future growth, we are focusing on the ASEAN region, and the Far East. We are looking at the internal markets in Malaysia as well, to increase our domestic consumption. We want to bring much more value addition to Malaysia. Currently we are using about 8,000 tons of our own production. At retail level, that is worth about RM500m ($164m). We hope to increase this substantially by 2020.
How do price fluctuations affect people in the pepper industry?
AYOM: The price of pepper is subject to the fundamental of supply and demand. We have been working together with other pepper producing countries through the International Pepper Community (IPC), which is headquartered in Jakarta. We have explored ideas on how to adjust to unfavorable market conditions. Internally, we have our own systems to help farmers. To provide more marketing options, we have developed a program called the Pepper Ownership and Storage Scheme, where farmers can store pepper at our premises. They can wait for better prices, or they can use this storage for security and safety. Farmers also have the option to lock in a price for delivery later on. By working together with Indonesia, Vietnam, Brazil, India, Sri Lanka, and other members of the IPC, we hope that we can cushion farmers from industry price fluctuations.
What research and development initiatives is the Malaysian Pepper Board currently involved in?
AYOM: The Malaysian Pepper Board was set up in 2006. We are focusing on research and development initiatives, and ways to utilize pepper in non-traditional methods. We are coming up with breeding programs with the aim of producing varieties of pepper that are much more disease resistant and possess other attributes such as pungency, aroma, and so on.
What kinds of investment opportunities are there into downstream pepper industries?
AYOM: If you look at the figures for our domestic consumption, we consumed 500 tons a year twenty years ago. Today, it has snowballed to about 8,000 tons. There are investments into downstream industries. We would like to see a higher value investment in pepper, as well as other products that contain pepper in the food industry. The government aspires to make Malaysia a halal food hub for the region, and we can benefit from this. This can help the pepper industry attract investments, create employment, and add value. We cannot be dependent on raw material exports. We will be exporting finished products that contain pepper.
We are hoping to produce 40,000 tons of pepper by 2020. Currently, we produce about 25,000 tons. We hope to consume half of this amount domestically, in the food and manufacturing industries.
What are your projections on the future growth and expansion of the pepper industry?
AYOM: We are hoping to produce 40,000 tons of pepper by 2020. Currently, we produce about 25,000 tons. We hope to consume half of this amount domestically, in the food and manufacturing industries. This is our goal for 2020 and we expect foreign investment to come into the food manufacturing and pharmaceutical industries. We are very keen to develop pepper extracts for pharmaceutical products and cosmetics. These are areas that have yet to be explored in Malaysia.
What geographic areas are you targeting for FDI?
AYOM: We will work with any credible entities that can come up with innovative ideas for the pepper industry. We welcome investors and innovators who can come up with novel ideas on uses of pepper.
What competitive advantages does the Malaysian Pepper Board have to meet these growth projections?
AYOM: In terms of competitive advantages, we have been leveraging our reliability as a supplier. We also have ISO-certified grading system for quality control. This system is being continuously fortified and enriched to meet increasing quality parameters demanded by consumers through the use of the latest equipment and cutting-edge technology. We have a good reputation in the market. We would also like to be known as an area where innovation and creativity can be used to spur industry advancement.