Saturday, January 23, 2010

Food & Beverages Industry in the Eastern Region


Malaysia with its rich tropical and agricultural resources combined with the diverse cultures including Malay, Chinese and Indian; have resulted in a fascinating range of processed food with an Asian twist. Today’ lifestyle changes have led to the increase in the demand for convenience and health food.

Potential of Food & Beverages Industries in The East Coast Region of Malaysia

The huge potential of food & beverages industry development in Malaysia has prompted our government in giving their serious attention to develop the sector. Under the Industrial Master Plan 3 (IMP3), F&B was highlighted for promotion as well as seven (7) key of the strategic trusts for food processing are introduced;

IMP3: Strategic Thrusts for Food Processing

Ensuring the availability of the supply raw materials;
Expanding and diversifying food processing activities and promoting the growth of the targeted areas;
Enhancing sectoral linkages and support services;
Intensifying research and development;
Enhancing competitiveness and increasing export;
Strengthening human resource development; and
Strengthening the institutional support and delivery system

Initiatives under the East Coast Economic Region (ECER)

Based on its potential, the ECER Master Plan aims to enlarge the food processing industry (food and beverages) due to the advantageous geographical orientation, considerable labor pool especially in the rural areas, strong resource endowment, strong potential for property development and competitive wage rates compared to the West Coast State. Key initiatives devised are as follows;

Agriculture Clusters Key Analysis

Crop-Base Clusters
Livestock, Based Clusters
Fish-Based Clusters
· Fruit & vegetables
· Highland agriculture / floriculture
· Herbs
· Kenaf
· Beef
· Mutton
· Poultry
· Breeder animals
· Animals feed production
· Marine capture fisheries
· Brackwishwater aquaculture
· Freshwater aquaculture

Crop Based Cluster

Crop Based Cluster

Initiatives & Location
· Fruit & vegetables
-Permanent Food Production Park (TKPM): Fruits-Lanchang, Ulu Jelai & Ulu Tembeling
-Citrus Valley-Durian Mentangau, Dungun
-Integrated Park, Rompin
· Highland agriculture/ floriculture

-Permanent Food Production Park (TKPM):
Vegetables & Floriculture- Lojing
· Herbs

-Herbal Park & Satelite Farm- Gua Musang, Lanchang, Raub, Dungun & Jeli
-Herbal & Biotechnology Center of Excellence (COE)- UDM
· Kenaf
-Kenaf Plantation & Animal Feed Production Industry- Bachok, Pasir Putih, Besut, Setiu & Marang.

Livestock Based Cluster
Initiatives & Location
· Cattle Industry
-Cattle Research & Innovation Center- Muadzam Shah
-Cattle Multiplier farm- Ulu Lepar, Tanah Merah, Ulu Tersat
-Livestock Feed industry- Bachok, Ulu Lepar, Ulu Tersat
-Cattle Integration In Pineapple Plantation- Rompin, Pekan
-Beef Valley, Dairy Farming- Kuala Krai, Pasir Putih, Marang, Lipis, Bera & Rompin
· Goat Industry
-Goat Research & Innovation Center- Kuala Berang
-Goat Multiplier & Commercial Farm - Telaga Papan, Kuala Berang
-Goat Integration in Rubber Plantation- Besut & Hulu Terengganu
Intensive Goat farming- Machang
· Poultry Industry
-Fully Integrated Poultry & Processing Park- Gua Musang
-Poultry Processing Industry & Day-Old-Chick Production- Gambang, Chendering
-Poultry Feed Production Industry- Gebeng, Kuantan

Fish Based Cluster
Fish Based Cluster
Initiatives & Location
· Marine Fish Cluster
-Integrated Fisheries Park- Tok Bali-Kelantan
-Fish processing Park- Kuantan
-Collection Processing & Packaging Center (CPCC)
–Kuala Kemaman, Pengkalan Kubor, Bachok
· Freshwater & Marine Fish Aquaculture Cluster
-Freshwater Fish Hatchery & Marketing Center- Raub, Pahang
-Marine Fish & Shrimp Hatchery and Marketing Center- Kuala Pahang
-Integrated Tilapia Production Park- Tasik Kenyir & Tasik Pergau
-Integrated Shrimp production Park- Setiu

The developments of the agriculture or food industry in the East Coast Region in Malaysia are clustered by location in order to spur the development as well as ensuring its success. The clusters devised are as follow:

Agro Based Industry Cluster

Pasir Mas- Food processing (Crops, Beef & Poultry based)
Tok Bali- Fish processing, Integrated Fisheries Park
Bachok- Fish processing
Gua Musang- Herbs/ Biotechnology Industry & food processing (Beef & poultry Based)
Kuala Krai- Food processing (Beef & poultry based)
Chendering- Food processing (fish & poultry based)
Kuala Kemaman- Food processing (fish based)
Gambang- Food processing (crops, poultry & beef based)
Kuantan- Fish processing park

Agro Based Industry Cluster
Agro based Industry Cluster
Initiatives & Location
· Development of Incubation of Centers for Micro food Processors
- Kota Bharu & Specialty Food
- Kuantan- Traditional & Specialty food

Collection, Processing & Packaging Center (CPCC) and Collection & Marketing Center (CMC)

CPCC/CMC Centers
Initiatives and location
· Fruits & Vegetables CPCC
-Lojing -Kuantan
-Jerantut -Rompin
-Kota bharu -Lanchang
· Fisheries CPCC
-Pengkalan Kubor
-Kuala Kemaman
· Herbal CPCC
-Gua Musang
· Kenaf CPCC
· Livestock CMC
-Felda Chiku
-Felda Jerangau
-Felda Chini

The Incentives Offered Under ECER

New fiscal incentives include under ECER are:
i. Income tax exemption up to 10 years;
ii. Investment tax allowance (ITA) amounting to 100% of qualifying capital expenditure for 5 years;
iii. Stamp duty exemption;
iv. Import duty and sales tax exemption

Under the ECER Masterplan, Halal F&B sector are identified to be developed via Halal Parks in Kelantan (Pasir Mas) and Pahang (Gambang). The objective of Halal Park is to participate in Malaysian’s vision ‘To be the Global Halal Hub or Halal Center for the World’ and to take advantage of rising global halal products and market development.

The components of the Halal Park included;
· Industrial site
· Incubator centers
· Logistic and distribution center
· SMIs development center
· Research and development center
· Land and infrastructure development for industrial park
· Marketing and promotion

Strength and Weaknesses: ECER as F&B Producer

The key strengths of ECER for the developments of F&B industries are;
Strong resources endowment
Considerable labor pool especially in the rural areas and among females
Competitive wage rates compared to the West Coast States
Strong potential for property development
Lower cost of living
Good education system and other basic community services
Advantageous geographical orientation

The potential of F&B industry in the ECER is boost by the growing population with rising income in Malaysia, where the demand for food consumption, animal feed and industrial usage has increase. Abundance of available land had also made the East Coast region a cheaper alternative for the food and beverages industry or agriculture itself. In addition, incentives offered by the ECER Master Plan are expected to influence the investor for capital injection in the industry.

The drawback of East Coast Region of Malaysia includes slow rate of capital accumulation in all aspect of the industry especially in term of inward investment. Traditional methods of farming are stilll being used by the farmer, and quick expansion of the industry is impossible without the modernization of machine and farming technology.

Ministry of Agriculture and Agro-based Industry (MOA) had further stated additional challenges in this industry which are;
Increase in food prices;
Increase cost of production inputs or raw material;
Land constraint;
Old and unskilled workforce;
Unavailability and low quality of seedlings;
Unavailability of agriculture infrastructure;
Less commercialization of R&D and innovation.

Several ways have been identified to reselve the challenges including:
Developing larger labor pool as well as skill capacities;
Implementing mechanization and automation in the sector for more effective and efficient work task;
Encouraging private sector participation;
Adoption of modern technology and k-economy driven to boost this industry abroad.
Enhancement of the support system for instance R&D, marketing strategies, special incentives and funding to assist the sector to be more competitive.
Introduction and development of the agro-tourism industry as additional income attraction to the industry.

Contribution: Mohd. Khodri, Practical 02/2009

No comments:

Post a Comment