Boustead-KLK unit spreads roots to Indonesia

KUALA LUMPUR: SEED producer Applied Agricultural Resources Sdn Bhd (AAR), an equally-owned unit of Boustead Holdings Bhd and Kuala Lumpur Kepong Bhd (KLK), has spread its roots to produce oil palm seeds in Indonesia.

"We'll cater to the increased demand for high-yielding seeds there as farmers plant up their greenfields and replant unproductive areas," said Boustead deputy chairman and group managing director Tan Sri Lodin Wok Kamaruddin (pic).

PT AAR Nusantara, which will undertake seed breeding in Medan, is a joint venture between AAR, Kuala Lumpur Kepong Plantation Holding Bhd and Indonesian government-linked company PT Perkebunan Nusantara II.

In a typical seed garden, hundreds of mother palms are planted to produce the desired hybrid seeds. There, agronomists climb up the matured mother palms, and place plastic bags over the chosen flowering bunches. They then seal it tightly and hand puff the desired male pollens into the bag, one by one.

Lodin said in an interview with Business Times that the plastic bag cover is meant to prevent weevils from reaching the nice-smelling female flowers and accidentally pollinating it with other unwanted male pollens.

When these fertilised bunches become fruitlets, they are harvested and prepared for germination, he said. "Over the years, KLK and our group have invested heavily in oil palm breeding and cloning. This has enabled us to improve the seeds for higher yields. Our semi-clonal seed production technology ensures clients get consistent quality in every seed they buy from AAR," he added.

To safeguard intellectual property rights of its planting materials from competitors, Lodin said AAR and University of Nottingham Malaysia Campus had come up with markers to identify the genetic make-up of their seeds, seedlings and ramets.

In Indonesia, AAR's semi-clonal seeds command a premium of RM3.50.

Asked on business outlook for the year, he replied that AAR aims to sell ten million seeds after having sold 8.5 million last year. In 2009, it bred and sold 7.2 million oil palm seeds.

Lodin noted that AAR is the pioneer from Malaysia to carry out seed breeding in Indonesia. "We're setting aside RM10 million for this venture in the next five years. Although Boustead recently sold its estate in Sumatera, AAR takes a long term view on Indonesia. There's bright prospects of sustained seed sales there as AAR's hybrids have an edge over that of the other seed companies there," he said.

Lodin explained that the distinctive features that separate AAR from its rivals are its super oily fruits and smaller sized oil palm trees that allow for high-density planting.

AAR's hybrids have proven track records of producing more than 35 tonnes of fresh fruit bunches with 23 per cent oil extraction rate. That works out to be about nine tonnes of oil per hectare in a year, or three times higher than Indonesia's average yield.

Another compelling feature of the AAR's hybrids is its dwarf stature, which allows for higher density planting. "Clients who buy our seeds can plant up 148 trees in one hectare compared with the current standard of 136. That will translate to about 10 per cent more oil per hectare," he said.

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