Minimal impact from Boustead Plantation’s commercial crop deal
KUCHING: Boustead Plantations Bhd (Boustead Plantation) signed a document of understanding (DoU), via subsidiary Boustead Agro Plantations Sdn Bhd, with Pertubuhan Peladang Kawasan Hulu Langat (PPKKL) to cooperate in the development of a commercial crop project, namely the planting of chilli and ginger.
This represents the group’s first venture into other crops as well as being a potential environmental, social and governance (ESG) venture via cooperation with a government body and local community.
Boustead Plantations, under their “Reinventing Boustead” framework, has outlined the integration of sustainability as well as ESG principles into its business.
Currently, the group is involved in the upstream and midstream of CPO production, cultivating palm oil and refining CPO for commercial sale. This DoU represents their first venture into other commercial crops via a technical cooperation with members of PPKKL.
The DoU entails the development of a commercial crop project, namely chilli and ginger, seemingly on the group’s existing land. The project aims to assist the government in addressing issues with food security as well as developing technologically integrated farming practices such as smart fertiliser application via the integration of Internet of Things.
Lembaga Pertubuhan Peladang, of which PPKKL is a branch of, is a government institution established to improve farmers’ economic and social standing via improving the skills and knowledge of members and presenting a more integrated community.
Established under the Akta Pertubuhan Peladang 1973 (Akta 109), PPKKL’s role in this is to provide technical expertise as well as guidance and training to ensure the success of the venture.
“Overall, we think the DoU will have minimal impact on the group,” commented Kenanga Investment Bank Bhd (Kenanga Research).
“The land utilised by the project is expected to be a small portion of the group’s land bank in the area and the project seems to be more of an early step towards achieving goals under their ESG framework via engaging with local communities through the training and guidance.
“We do not expect any major effects on earnings as investment into the project is expected to be minimal.
“While the collaboration with PPKKL is an encouraging step towards their longterm sustainability goals, the project seems to be the group’s experimenting with other crops rather than an indicator of a major change.”