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13. April 2006

MALAYSIA: Sarawak To Work With Chinese Investors On Rubber Industry

Source: Bernama News Agency, 13 Apr 2006

The Sarawak government will work with investors from
China and Peninsular Malaysia to develop large-scale
rubber estates and set up rubber processing factories
estimated at a total of US$50 million (RM185 million)
in the state soon.

The proposed collaboration was cemented on 13 Apr.
following the signing of a memorandum of understanding
(MoU) in Kuching between the state government, which
was represented by the Sarawak Agriculture Department,
and China-based Guangdong Agribusiness Group
Corporation and the Titi Latex group of companies.

The event was witnessed by Deputy Chief Minister and
State Modernisation of Agriculture Minister Tan Sri Dr
George Chan and China's Agriculture Ministry chief
economist Zhu Xiuyan.

Dr Chan said the move would enable Sarawak's rubber
industry to be revamped by consolidating the 53
mini-rubber estates, with a total area of 10,448
hectares, into bigger and more viable agricultural
units.

Under the Seventh and Eighth Malaysia Plan from 1996
to 2005, such smallholdings had benefited 2,068 farm
families.

"The injection of capital by Guangdong Agribusiness
and Titi Latex will come as a boost to the ministry's
efforts to further tap the potential of the state's
rubber industry as well as the development of the
downstream processing sector," he said at a press
conference.

Although the increasing world demand in natural rubber
and soaring rubber prices had created new
opportunities and provided a conducive environment for
the industry's commercialisation, Dr Chan said there
was a need to ensure that it was more sustainable and
competitive.

Established in 1951 with current total assets of
US$1.7 billion (RM6.2 billion), Guangdong Agribusiness
is expected to help in the transfer of technological
know-how and improve the income of rubber smallholders
in Sarawak.

The group had expanded its business overseas and
teamed up with Titi Latex, its Malaysian joint-venture
partner, to invest in rubber processing plants in
Thailand, Vietnam and Peninsular Malaysia.

Dr Chan said the collaboration would involve the
setting up of a Standard Malaysian Rubber (SMR)
factory in Kuching in the initial stage for the
production of processed rubber for exports.

The initial project was expected to be followed by the
setting up of a latex concentrate plant, involving an
average of between 3,000 and 5,000 hectares, and a
glove factory as part of the industry's value-adding
activities, he said.

He added that the venture was also in line with the
national policy to sustain the production of natural
rubber at about 750,000 tonnes per year from 1.2
million hectares of rubber areas.

Meanwhile, Zhu said the state government's initiatives
to attract foreign investors to commercialise the
industry would be a win-win situation for the parties
involved.

Guangdong's joint ventures in Malaysia included its
existing glove factory in Muar, Johor, which is
producing four million to five million pieces of
gloves per month at present, and an SMR factory in
Kedah.


(Syed Rashid Ali, Karachi, Pakistan)

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