Plantation Industries and Commodities Minister Tan Sri Bernard Giluk Dompok launched on May 17 an innovative oil palm planting investment scheme, East West One Planter’s Scheme (EWOPS), which opens up opportunities for investors to enjoy a fixed-term interest in an oil palm plantation and to reap the upside potential of palm oil without having to manage the plantation. It is a safe investment programme in Malaysia that provides another alternative investment channel. It is also seen as an attractive diversification of one’s financial portfolio.
The East West One Planter’s Scheme is the brainchild of Sabah-based East West One Consortium Bhd. Its Chief Executive Officer, Dr Jessie Tang, was present at the official launch to unveil details of the investment scheme.
Today, palm oil is the most cost-efficient and widely traded edible oil on the global edible oils and fats market. It has been consumed as food for 5,000 years and is currently being used as an ingredient in food as well as non-food industries. More recently, it has been tapped for use in bio-fuel production. As the world market for oils and fats grows, it has raised expectations that palm oil production would be profitable as a long-term investment.
The investment programme has a guaranteed return of fixed dividends, which are paid quarterly, in addition to a 100 per cent capital refund upon maturity. The returns range from 8% in the first five years to as high as 16 per cent in the Premier category, with average annual returns of 8%, 9% and 10% depending on the category invested.
Types of Investment
According to East West One Consortium’s Tang, there are four categories of Planters Blocks under this scheme: Premier, Gold, Silver and Bronze. They entitle the planter to enjoy monthly returns for a term of six to eight years, depending on the category invested. The company has established a total of 37,981 Planters Blocks of which 495 come under the Premier category, priced at RM58,888 each. There are 1,486 Blocks under the Gold category and 12,000 Blocks under the silver category, priced at RM28,888 and RM10,000 respectively. The 24,000 Blocks under the Bronze category are priced at RM5,000 each. The Gold category is for a six-year investment period only, while the others are for eight years.
Q: How safe is EWOPS?
A: East West One Consortium passed stringent vetting by the Companies Commission of Malaysia, which was very particular indeed in wanting the
mechanics to be in place to ensure investor interest was well taken care of. Furthermore, we have engaged the services of a Trustee (TMF Trustee), which will, among its many duties, pay the quarterly dividends to the Planters. The international acclaimed audit firm Crowe Horwarth has been retained to audit our accounts, while an independent consultant will conduct a review of our plantation operations twice a year. “
The management team will seek to limit investment risks through effective resource management, close supervision and effective cost-control. However, palm oil prices are hovering at a record levels and international market demand is on the rise. The industry is further protected by the government, which has strongly indicated that under depressed conditions due to oversupply of CPO, the excess supply would be used for bio-diesel.
Q: What does the future hold?
A: The outlook for oil palm is promising. The company has begun planting and aims to finish the entire scheme in 2015. We are searching for more land to add to our landbank. This will be made through acquisitions and if suitable land comes our way, or we will be pleased to develop it on a joint-venture basis. And for a plantation of our size, it makes economic sense to develop a 60-tonne per hour mill of our own. This will be a first for the district and will be a boon for smallholders in and around the area.
Q: What has taken place so far?
A: While waiting for approvals, a nursery was set up and we have enough seedlings to plant in our first phase of 3,714 acres. Planting has since begun with some 10,000 one-year-old seedlings bought from the Sawit Kinabalu Group. These will mature and be ready for first harvesting by 2014. In the meantime, 4,000 acres that come under the second phase are being cleared and planting should commence before the year-end. Our own nursery will have sufficient seedlings for planting by then.”
Q: What is the company operation and marketing like?
A: The company headquarters is in Kota Kinabalu, but there also offices in Kuala Lumpur, Penang and Melaka. New offices will open in Sibu, Johor Baru and Kota Baru very soon. To serve investors, there are more than 100 Planters Consultants, who will explain the mechanics of EWOPS and its benefits to investors.
EWOPS benefits investors by offering a safe, secure and innovative concept of investment. This is a platform that enables anyone to be a proud, temporary partner in the oil palm planting industry. Best of all, one gets to enjoy being a Planter and earn good returns for between six and eight years, without having to spend huge sums of money (with returns being generated only after three years normally) and without the hassle of having to manage a plantation.
Q: Who are the major stakeholders?
A: East West One Consortium was registered in 2004 for the purpose of developing agricultural land for the cultivation of oil palm. The principal shareholders are Datuk Seri Panglima Tham Nyip Shen (Chairman), Dr Jessie Tang (Chief Executive Officer) and Datuk Peter Khoo (Managing Director).
The key people involved in East West One Consortium have vast experience in the business. Our stakeholders as well as management team come with a great deal of expertise and experience to ensure the success of this scheme. Tham was a former Deputy Chief Minister in Sabah and his family is involved in a 10,000-acre oil palm plantation and an oil palm mill in Keningau. Khoo’s family is involved in rubber and oil palm, while Tang is a director in a Sabah company that is involved in a rubber plantation development.