Investment potential in kenaf

Investment potential in kenaf
8 July, 2004

The two government task forces set up to assist government-linked companies (GLCs) have identified a fibre crop called kenaf as one of the new sources of growth for investments by these companies.

Kenaf, or hibiscus cannabinus, can be processed into fibreboard and animal feed.

Datuk Mustapa Mohamed, who jointly chairs the two task forces — on investments and new sources of growth — with Finance Minister II Tan Sri Nor Mohamed Yakcop, said the GLCs are excited at the prospects of investing in kenaf cultivation.

“Besides biotechnology and the information and communications technology, where there are dedicated GLCs involved in promoting these sectors, we are looking at kenaf cultivation.  The Government has spent RM5 million on technical research on this new crop, which has a lot of potential,” he told Business Times in Kuala Lumpur.

China, Bangladesh, Thailand and Myanmar contribute 95% of global kenaf production. Global production totals three million tonnes a year.

The Veterinary Research Institute, Malaysian Agriculture Research Development Institute and Universiti Putra Malaysia have set up a Kenaf Technical Group to jointly study the shrub as a high-protein animal feed, especially for dairy goats.

The Government had allocated RM2 million for kenaf research under the Seventh Malaysia Plan (1996-2000) and RM3.2 million for the same purpose under the Eighth Malaysia Plan (2001-2005).

First cultivation of the crop in Malaysia can be expected as early as 2005.

Studies carried out on cows in Japan showed that those fed with kenaf produced up to 45% more milk than others.

Kenaf would make quality animal feed because its protein content is between 22% and 25% compared with cut-grass, which contains only 12%.  The shrub, which grows to a height of 1.75m in just a month, is also able to produce very strong and long strands of fibre.

Besides fibreboard for housing construction, kenaf can also be used to make car seats, paddings and trimmings, and various grades of paper from newsprint to bond paper.

Globally, kenaf fetches between RM700 and RM1,200 a tonne.

At present, Matsushita Electric Works and Mieco Chipboard Bhd have formed a joint venture to produce kenaf fibre-oriented board in Semambu, Pahang.

Mustapa, who is the Minister in the Prime Minister’s Department in charge of national planning, said the two taskforces have been looking at how the GLCs can be synergised to tap the potential of the new sources of growth.

“This is it. We have an idea on a product, and because it was not presented to the right people before, it did not progress beyond the idea stage. With the two committees, we believe that GLCs can be brought together for synergy and get involved in the areas of growth,” he added.