29/01/07 (The Star)  -  FELDA Agricultural Services Sdn Bhd (FAS), a unit of Felda Holdings Bhd, plans to strengthen its position as the market leader in the production of oil palm hybrid seeds and clones (or ramets) in Malaysia and regionally.

It currently has a dominant 30% share in the local seeds market and will intensify ramet production to cater to a broad section of the high-growth oil palm sector.

FAS also plans to embark on the research and development (R&D) for and breeding of medicinal plants like tongkat ali, herbs, and fruits like bananas for commercialisation.

Executive director and chief executive officer S. Palaniappan told StarBiz that FAS' main thrust would remain in oil palm breeding, but it would continuously diversify into agriculture-based areas.

FAS is a unique R&D outfit set up by the Felda group mainly to specialise in plant breeding, tissue culture, agronomy and crop protection. 

It also provides technical advisory services and produces planting materials, fertilisers and rat baits for the Felda group as well as private plantation houses and smallholders nationwide.

Palaniappan said: “Our major revenue earners are oil palm yields, seeds and fertilisers. 

“We anticipate 2006 performance to be better than 2005's pre-tax profit of RM47.6mil and turnover of RM256.7mil.” 

 
S. Palaniappan
He said FAS was a profitable unit due to its successful oil palm breeding programme. The Felda group allows the company to manage 12,434ha of land for test trials.

Unknown to many, FAS has a longer history in oil palm R&D and breeding than Malaysian Palm Oil Board (MPOB), spanning almost four decades.

Of the total land bank, 11,711ha are dedicated to oil palm crops while the remainder are for tropical fruits, herbs, timber, cocoa, coffee and nursery. 

On oil palm breeding, Palaniappan said: “I believe our Felda Yangambis seeds remain the major source of planting materials in private oil palm plantations and constitute 30% of market requirements.

To date, the biotechnology lab near the Felda headquarters in Jalan Gurney, Kuala Lumpur is able to produce 250,000 ramets per year. 

Production will soon be bolstered with FAS' new biotechnology centre in Bandar Enstek, Negri Sembilan, which will be launched tomorrow. 

Although FAS' objective was to look after the interest of the Felda group, he said, the intensive nature of FAS' breeding programme had enabled the company to market 75% to 80% of its total seed production to outside clients, who preferred to plant them in their own nurseries.

“This is an indication of the high acceptance of our planting materials within the oil palm fraternity,” he added. 

FAS supplies about five to six million seeds annually to Felda's replanting programme nationwide.

The seed is sold at RM1.30 each, but ramets are more expensive at RM25 due the high cost of technology involved but will be compensated by the more than 20% increase in oil yield.

With the new biotechnology centre, Palaniappan said ramet production would hit one million by 2010 from 250,000 currently. “We are targeting to produce three million ramets eventually but the scaling up will take some time,” he added.

In terms of oil palm yields, FAS' fields have become the benchmark within the Felda group. The average yield of FAS field is about 26 tonnes per hectare, which is higher than the national average.

Palaniappan said FAS had two fertiliser plants in Kuantan, Pahang, and Lahad Datu, Sabah, with a total production of 250,000 tonnes per year.

On crop protection, the company has been successful in commercialising its BUTIK S brand of rat baits.

“We are also waiting for the Pesticide Board's approval for our first bio-pesticide product, which we plan to commercialise,” he added. This is a joint venture with the MPOB.