MARKET DEVELOPMENT
08-03-2002
INDEXgain eyes US$60m oil palm plantation project
8 March,2002 (Business Times) - LITTLE-known INDEXgain Sdn Bhd is set toinvest in an oil palm plantation in the province of Talakag, Mindanao, amove that will change the livelihood of between 200 and 300 families inthe southern island of the Philippines.The company, an authorised procurator of a specialised project fundingloan syndicated house, had entered into a memorandum of understanding(MOU) with Novagreen Industries Corp, a firm basically engaged in tunaexports, on December 7 last year.The signing of the MOU will pave the way for the implementation of a US$60million (US$1 = RM3.80) oil palm plantation, covering some 10,000ha, inTalakag.INDEXgain executive director Jumahat Subaree said the company is awaitingclearance pertaining to land matters before conducting a due diligence.“We have now progressed in most matters, except for the land clearance.Once we get the clearance, we will be able to start due diligence, whichtakes about three months. Then we can start to implement the project,probably in July or August,†he said in an interview with Business Times.Jumahat said INDEXgain has syndicated offshore funding from its principalcompany, based in Liechtenstein. A letter of intent was issued by itsprincipal on December 21 last year on their interest in studying the loanapplication for the project.“At this stage, Novagreen has basically completed the documentation inpreparation for the due diligence.“As long as the land matters are not overcome, we cannot proceed furtherwith the loan syndication,†he said.Jumahat said the company is seeking the assistance of Philippine PresidentGloria Macapagal Arroyo to issue letters to the relevant authorities forland approval.He said the villagers in the concerned areas stand to benefit from theplantation project as it will improve their livelihood.“At present, the smalholders are each given about 5 acres of land tocultivate corn for their own consumption. This is not economically viable.There is also a lot of idle land in the area.“It will be better if they consolidate their land and integrate activitiesranging from ranching to oil palm plantation within the area,†he said.Jumahat said the company is also mulling the possibility of emulating theFederal Land Consolidation and Rehabilitation Authority’s land scheme forthe plantation project.“We intend to build a township, equipped with proper amenities such asschools and clinics for the smallholders,†he said.Noting that this is in line with the “Prosper Thy Neighbours†concept,Jumahat said such a move will help reduce the many problems faced by thepeople of Mindanao, such as unemployment.“If we can improve the economy of Mindanao, we can help settle problemssuch as illegal immigrants in Sabah and job security. If the economy ofMindanao improves, illegal immigrants in Sabah will want to go back toMindanao as there will be jobs available back home,†he said.Arroyo, during her visit to Malaysia last year, had called on Malaysiansto venture into the oil palm plantation sector.The Philippine President witnessed the signing of a MOU for the project inTakalag, along with five other MOUs with different proponents to developoil palm plantations worth a total of US$234 million during the 10thMindanao Business Conference in Cotabato in September last year.Other areas which interest INDEXgain are Arakan, Agusan, Saranggani andNorth Davao.However, Jumahat said the company is currently focusing on developing oilpalm plantations in Takalag.He said the company has identified and surveyed potential plantations. Theareas considered for funding are Takalag and Arakan, while Agusan,Seranggi and North Davao are ready but not under consideration forfunding.INDEXgain was established about a year ago to provide consultancyservices, including project funding and refinancing.
