How much economic activity does the pepper industry contribute to Malaysia’s GDP?
AYOM: Pepper has been associated with Malaysia for quite a number of years, more than a century in fact. It has provided stable income for 67,000 people in the rural areas of Sarawak and some in Johor. At the same time, in terms of exports, it has been earning the country close to 1bn ringgit ($305m) in the last five years. If you look at domestic consumption, in terms of value addition, the contribution comes to something like half a billion ringgit per year. So over the last five years, pepper has provided the economy with about 3.5bn ringgit ($1.1bn) worth of economic activities.
How supportive has the government been of the pepper industry? What are your long-term production targets?
AYOM: The Malaysian government has been providing good support for the industry. Production was under the Department of Agriculture some time ago but now they have set up the Malaysian Pepper Board to support the industry as a complete body and to look after the industry from production and growing, until marketing and research. We have built some reputation over the years in the international market, in terms of our quality as well as reliability as a supplier. We are hoping that the government will be asking us to look for bigger areas to grow pepper and our aim is to produce about 40,000 tonnes by the year 2020. That's our target.
How much land area is currently use to grow pepper? How much additional land will you require to meet your 2020 production targets? How much additional manpower will be required?
AYOM: Under the current level of production, we have about 14,700 hectares. We are trying to get people into planting more to reach 20,000 hectares by the year 2020. That's an increase of about 20% in terms of hectares. That means that there are increasing employment opportunities for another 20% and that is only in the production sector, but in the industry sector it could be much more than that. As the industry sector grows, as the value addition grows, we will require more people to work in the food factories and flavour industries, and also the packaging industries.
What are your expectations for exports of pepper for 2013? How much do you hope to export by 2020?
AYOM: If I go by our performance in the first part of this year, there has been an increase of exports on a year-on-year basis of 22%. That means that last year we were exporting around 245m ringgit ($75m) worth of pepper, so this year we could hit the 300m ($92m) ringgit mark worth of pepper exports. By the year 2020, we will be targeting an export of value of 600m ringgit ($183m).
What other goals do you have for exports going forward?
We are hoping that the government will be asking us to look for bigger areas to grow pepper and our aim is to produce about 40,000 tonnes by the year 2020. That's our target.
AYOM: As with any other primary commodity, our aim is not just to export raw pepper. Our aim is to use the pepper domestically and turn it into something more value added. We are even working towards national branding of all the commodities, including pepper. There has been some brand-led initiative for pepper. Prior to this, all the Malaysian pepper, exports of Malaysian pepper, have been branded as Sarawak pepper. But we are also revisiting that branding strategy. My vision is that Malaysian pepper must go into generating more value chain activities and towards even micro-branding or regional branding of Malaysian pepper, where certain regions can produce this kind of pepper and certain regions can produce that kind of pepper. That should be the way.
Where is there opportunity for downstream investment in the pepper industry?
AYOM: Pepper is an ingredient in a lot of food ingredients and it can be used as a preservative, and of course there are other characteristics of pepper which can be explored. The main source of investment now will be in the food industry for flavourings and condiments. I think that Malaysia aspiring to be the halal food hub of Asia will be beneficial in terms of the domestic consumption of pepper for its food industry. So there are opportunities for ancillary investment in ancillary industries like packaging, advertising, and also transportation. These are the areas where I think the pepper industry will contribute in terms of investment. Of course, there is also food manufacturing, setting up food factories which use pepper and other ingredients as well, but mainly it will be the food and flavouring industries.
What are the main challenges facing Malaysia’s pepper industry in its push toward the 2020 goals?
AYOM: One of the major concerns for agricultural producers nowadays is the quest or even the requirement by consumers for cleaner and safer products to consume, to use in their food preparations and so on. The government is of course interested in quite a lot of this. At the Malaysian Pepper Board, we're interested in a lot of new equipment, we are working on new development and procedures to monitor quality, and we also have programs to monitor quality at the farm level as well as the export level. The other issues that we face, of course, is the competition for land use, even though pepper may not use so much land. The third issue would be the aging population of the current pepper farmers. Our challenge is to attract younger people to get involved in the growing of pepper. These people, because they are better educated, can probably absorb technology faster and also be amenable to new management techniques.