13 May 2002 (Business Times) - NOVAGREEN Industries Corp of thePhilippines is banking on its proposed collaboration with Malaysia’sINDEXgain Sdn Bhd to expand its oil palm plantation business in Mindanao.Its chief operating officer, Albert Magallanes, said the company and thePhilippines stand to gain from this collaboration, especially withMalaysia’s proven expertise in the oil palm industry.“While we are able to expand our business in the oil palm sector, thiswill be a stepping stone for the development of the industry, which willalso boost the Philippine economy, especially Mindanao’s,” he toldBusiness Times in Kuala Lumpur recently.Magallanes was in Kuala Lumpur to meet the trade counsellor at thePhilippine embassy, Glenn G. Penaranda, to discuss the proposedcollaboration with INDEXgain to develop 10,000ha of oil palm plantation inTalakag, Mindanao.Novagreen, a tuna fish exporter, and INDEXgain, an authorised procuratorof a specialised project funding loan syndicated house, signed amemorandum of agreement (MOA) on December 7 last year to develop a US$60million (US$1 = RM3.80) oil palm plantation in Talakag.“We are in the second stage of negotiations, which is on funding for theproject,” Magallanes said, adding that it will be the largest oil palmplantation in Mindanao if it takes off.At present, the largest oil palm plantation in Mindanao, covering 6,800ha,is being developed by Kumpulan Guthrie Bhd.“We expect no fewer than 6,000 workers, including skilled ones, to work inour oil palm plantation,” Magallanes said.But what is important, he added, is that it will be an integrated estate,which will lead to the development of a township. “All operations,including those of government and non-governmental agencies, will becentralised in one area, equipped with social facilities.”Magallanes said there is increasing interest from growers to offer theirland for consolidation into the oil palm plantation.Novagreen president and chief executive officer Racquel S. Simon said sheis confident that the project will be a success through the joint venturewith a Malaysian group.Furthermore, she said, Magallanes’ nine years of experience as manager ofan oil palm plantation in Kalimantan is a plus point for Novagreen toprosper in this sector.Besides Talakag, Novagreen and INDEXgain plan to develop other areas withoil palm which include Arakan, Agusan, Saranggani and North Davao.Including Talakag, investments for the projects are expected to be withinrange of US$234 million.Novagreen and INDEXgain, which had completed their due diligence on theproject will submit a report to INDEXgain's principal company, based inLienchtenstein, Switzerland for loan approval.INDEXgain executive director Jumahat Subaree said the companies arecurrently fine-tuning the report."We will leave for Lienchtenstein on May 29 to submit the comprehensivereport," he said.He reiterated that INDEXgain is not a joint venture partner withNovagreen, merely facilitating syndicated loan for the project.But the company will provide management skill in handling oil palmplantation."A reserach centre will also be developed in the area to create a pool ofoil palm managers. We hope that the local filipinos will manage the oilpalm in future," he said.Jumahat said its collaboration with Novagreen will provide an opportunityfor other Malaysian companies to invest in Mindanao.For instance, he said the company is bringing along with them a Malaysianarchitect to design affordable houses for the workers, as well asgovernment and public buildings.KACArchitect, INDEXgain's associate company, is helping to help design thehouses and buildings in the area.Its principal, Khairil Anwar Halim said the company is looking at building1,500 units of affordable houses of bungalows and semi-detached houses."Initially, we are looking at between US$7 million and US$8 millioninfrastructure investment," he said.

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