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One man's fortune in oil palm seedlings

Publication Date : 16-07-2014


Tan Kim Tun turns his passion for working the land into a successful oil palm seedling business


He has always been a man of the soil. With the sun burning the nape of his neck, Tan Kim Tun goes about his daily rounds in his oil palm nursery. The seedlings need to be fertilised and watered regularly, while pests and weeds need to be destroyed.

Nothing matters more to Tan than producing seedlings of top-notch quality for his customers. In the oil palm industry, diseased crops can cost losses worth fortunes. Tan is fully aware that all it takes for customers to turn away from him is just one diseased plant.

“In our business, the customers must always be kept happy and satisfied. Thus, we always ensure that we provide the best quality oil palm because we want them to continue patronising us,” Tan points out.

Tan started out three decades ago with 1.2ha of land. He produces oil palm seedlings that are gestated for nearly 10 months at the nurseries before they are sold for field planting.

Today, Tan’s company TK Tani Enterprise (TK Tani), based in Asahan, Johor, and Jasin, Malacca, is one of the major suppliers of oil palm seedlings.

“We supply an average of 20,000 to 35,000 seedlings a month to nearby smallholders, estate owners and even government schemes like Felcra and Felda,” says Tan.

What began as a small family business has now grown into a successful enterprise, covering 12ha of land with 12 full-time workers and a few contract labourers.

His success began with his parents, says 60-year-old Tan.

“My parents were rubber tappers. So, I was inclined towards agriculture. I was really interested, so I went on to work as a rubber estate supervisor.

“Then, I received a government scholarship from the Farmers Organisation Board (LPP) to study agriculture. Upon graduation, I worked for them for five years before moving on to the National Farmers Organisation (Nafas) for 16 years.

“It was only after that did I start my own business venture, armed with all the knowledge and experience I had gained,” Tan explains.

But what ultimately propelled him into the industry was, well, the industry itself. Tan says he saw the sustainability of the palm oil industry and the bright prospects it promised and decided to go forward with his business plans.

According to the Malaysian Palm Oil Board’s (MPOB) website, “the oil palm industry forms the economic backbone of Malaysia”. Oil palm plantations cover nearly three quarters of the country’s agricultural land and the oil palm industry is expected to contribute 200 billion ringgit (US$62.58 milion) to Malaysia’s export value by 2020.

Setting up TK Tani also gave the father-of-three the opportunity to provide employment to his brothers, who handle the production arm of the business.

“Women villagers who live around the nursery work for us on a contract basis. There isn’t any fixed working hours. They come in when they can to do weeding and bag the seedlings for extra income.

“So, not only does my oil palm business have a bright future, it also creates employment opportunities for the local community,” he says.

Tan was also instrumental in the founding of the Malaysian Oil Palm Nurseries Association (Mopna), in collaboration with the MPOB, in 2008. Mopna, which is one of MPOB’s board members, plays a vital role in ensuring all its members market quality-grade seedlings.

Tan, who was recently elected Mopna’s president adds that the association is also a platform for its members to be updated and educated by MPOB. Members are also encouraged to obtain the Codes of Good Nursery Practice for Oil Palm Nurseries (CoPN).

Of course, it is never smooth sailing when you set up your own business, and Tan faces challenges such as managing the cost of seeds which need to be purchased from reputable producers such as Sime Darby and Felda Agricultural Services.

Tan also has to manage his spending on fertilisers as well as labour. With perseverance and adherence to high standards, Tan says he has been able to build a successful business.

He stresses on the importance of building a long-lasting relationship with his clients.

“We always assure them that we are here to stay, that we are not a one-off nursery. They are assured that we are always there should they run into any problems.

“For example, we provide free advice for the smallholders on matters such as which fertilisers to use and planting methods. As for the big estates, our consultants will advise them.

“This is how we ensure our clients are happy. It’s not a matter of selling seedlings. There must be follow-up services,” says Tan.

Many of Tan’s clients are returning customers and he believes they will refer new customers to him.

For those who desire to venture into this industry, Tan has a word of caution: he says that although his seedling business is sustainable, it is not an instant cash cow.

“Many people, when they enter into this field, expect to get rich very quickly. But oil palm has a very long gestation period. Not only that, you need to endure the heat, rain and the long hours.

“Unfortunately, they can’t wait. So, my advice is one needs the passion for agriculture and the patience to withstand the long hours. It is a very hot and tedious job,” Tan cautions.


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