COLLABORATION BETWEEN BORNEO ECO FOOD SDN BHD (SUBSIDIARY OF BORNEO OIL BERHAD) AND SOFTWISE SDN BHD FOR THE DEVELOPMENT AND MANAGEMENT OF SUSTAINABLE SUPPLY OF GRAIN MAIZE AS ANIMAL FEED FROM LOCAL COMMUNITIES
There are certain global events that will change the world forever. Some may call these Disruptions.
One such event was 9/11 that completely changed the global financial world forever and the second world changing event is undeniably the COVID-19 (C-19) global pandemic.
C19 affected the entire world by being the first event in history to cause a global shutdown of economies causing major disruption to global supply chains and other domino effects across all aspects of business.
One lesson that was learnt during C-19 is the importance of crucial food supply chains involving FOOD production, supply and distribution (logistics) networks and at the same time, C19 highlighted intrinsic weaknesses within the State and National systems whereby Malaysia is very much dependent on imported goods.
Today, global events have overtaken C-19 and events such as the war in Ukraine and global weather patterns have made Food Security an item of UTMOST PRIORITY that can no longer be ignored.
During C-19, Borneo Oil Bhd Group (“BOB”), the owner of the SugarBun Franchise and Pezzo Licensor realised how very valuable it’s F&B and logistics divisions are.
It was during this period that it’s star product, Sabasco Chilli Sauce was introduced into the market with an overwhelming response.
This unexpected and overwhelming demand for Sabasco locally and internationally brought to light the various issues pertaining to supply of raw materials and logistics arising in moving produce from farm to the market given the size and poor infrastructure in Sabah.
BOB recognised that, like it’s Sabasco Chilli Sauce, there are many niche products from indigenous local produce that can be developed commercially for global markets but at the same time, issues like mobilising farmers and logistic challenges had to be resolved.
In addition to this, BOB group had also unwaveringly decided to ensure all of the Group’s businesses are conducted with the highest adherence and commitment towards Environmental, Social and Governance (“ESG”) principles.
In this regard, the group also decided to ensure that all produce used for it’s businesses are sourced and farmed in sustainable and regenerative ways so as to reduce the group’s overall carbon footprint.
Through it’s US based associate, Verde Resources, Inc. (“Verde”), various methods were introduced into the group’s plantation and farming arm, Borneo Eco Food Sdn Bhd so as to ensure the feedstock for all the Group’s business needs are procured using sustainable and regenerative methods, with a long term aim to position itself at the forefront of carbon farming in Borneo.
As the saying goes, “like attracts like” and so as providence would have it, a like minded ally, in the form of Softwise Sdn Bhd (“SW”), a logistics and trading company, was simultaneously working parallelly to develop agropeuneurs and engage rural farmers to breach the logistic divide between rural producers and city markets through it’s Shared Services and Outsourcing (‘SSO”) business model.
Like BOB, C-19 shutdown had shown SW how important food supply chains were and it was during that time that they had started to garner local attention through their various endeavours such as Kaki Kaki Kampong (KKK) and their involvement with Koperasi Wawasan Rakyat (“KOWR”), a registered cooperative formed with the aim to develop rural communities through agriculture by providing training, seedlings, logistics and other support to these communities.
Through KOWR, SW started it’s grain maize planting scheme involving rural communities and small holders in June 2021 to produce high quality fresh grain maize using non gmo maize and sustainable farming methods without chemicals. The response was overwelmingly good but as more farming partners requested to participate in the scheme, more resources were required for the expanding scheme.
Malaysia relies on 100% imported grain corn for animal feed from countries like Brazil and Argentina. Despite various government initiatives to develop grain maize for animal feed, Malaysia is yet to achieve any form of notable self sufficiency. This is a paradox given the overall land mass and unutilised lands especially in East Malaysia.
A reason for the failure of the government’s efforts to develop the local Grain Maize industry is that the success of any industry depends on a proper and efficient market system. This means stable pricing and guaranteed offtake to give farmers and small holders the confidence to invest their time and resources into a particular crop.
The value of Malaysia’s annual grain maize imports is almost RM6.2 Billion per annum equivalent to 4.06 million Metric tonnes and in Sabah, to the tune of RM500 Million per year.
This complete reliance on imported maize subjects Malaysia to the constant risks of currency fluctuations and high logistics cost.
The government recently announced plans to reduce the national livestock feed imports by 30% by the year 2030 through it’s Grain Corn Industry Development Project.
This means that Malaysia needs to produce at least 1.2 million metric tons of grain corn by 2030 to fulfil this aspiration.
This is pertinent given the fact that CHICKEN is the most consumed meat in Malaysia. In fact Malaysia has one of the highest per capita consumption rates for chicken.
SugarBun’s top selling item is indeed it’s Broasted Chicken and as such, BOB is very aware and concerned about the drastic increase in chicken prices PLUS the news reports of chicken shortage.
In early 2022, BOB and SW began to explore how they could collaborate with each other to develop a sustainable long term local supply of grain maize to be used for the local poultry and animal feed industry. In addition, to use regenerative carbon farming methods aimed at becoming a leader in carbon farming while at the same time, creating opportunities for rural communities in order to uplift the living standards and eradicate poverty in Sabah.
This collaboration is aimed at increasing the production of grain maize in Sabah through community empowerment in a sustainable manner with an aim to contribute towards the State’s Food Security Agenda.
This private initiative is like a small scale ANT HILL system of interconnectivity between rural communities, small holders and corporations to develop an integrated grain maize production system enabled by a guaranteed offtake scheme.
Currently, the existing annual demand for grain maize in Sabah is estimated to be 300,000 MT and in Sarawak 150,000 MT. This collaboration will focus on developing the upstream and downstream portions of this industry in order to meet the local demand as a small step towards Sabah becoming self sufficient.
The vast land area and fertile soil in Sabah are indeed a great blessing for the people. Sabah can indeed become the Food Basket for Malaysia in a sustainable and regenerative manner which is already deeply ingrained in the local agrarian culture and beliefs.
Our Corporate Vision for Sabah is to work towards shared prosperity and SELF SUFFICIENCY. Building Communities as the building blocks towards a better Sabah for our children, and our children’s children.