Agriculture NKEA Fact Sheet

The Agriculture NKEA focuses on transforming a traditionally small-scale, production-based

sector into a large-scale agribusiness industry that contributes to economic growth and
sustainability. This transformation is based on an integrated and market-centric model that
comprises four key themes: capitalising on competitive advantages, tapping premium
markets, aligning food security objectives with increasing GNI, and participating in the
regional agricultural value chain. Sixteen Entry Point Projects have been identified to spur
growth in this sector.

List of Entry Point Projects (EPPs)

EPP 1: High-Value Herbal Products

This EPP looks at improving the product quality and marketing efforts of dietary and herbal
supplements to tap the global demand for high-value herbal supplements and remedies.
This will be achieved by ensuring that there is sufficient supply of raw materials for research
and development (R&D) and clinical trials before production takes place. Additionally, the
Ministry of Agriculture (MoA) has established the Herbal Development Office to map the
strategic direction, policies and regulations required to spur this industry’s growth.

The initial phase of this EPP is focused on ensuring the supply of five main herbs - Tongkat
Ali, Misai Kucing, Hempedu Bumi, Dukung Anak and Kacip Fatimah.

Investments in this EPP are targeted at both the upstream and downstream segments of the
industry, with The East Coast Economic Region Development Council currently managing
upstream initiatives ensuring raw material supply. Production of raw materials will however
be carried out throughout the country, with Herbal Cultivation Parks to be established in
Chegar Perah, Pahang; and Pasir Raja and Durian Mentangau, Terengganu. These parks will
supplement ongoing cultivation at 11 herbal clusters set up by the Department of
Agriculture located in Perlis, Kedah, Pulau Pinang, Perak, Johor, Selangor and Negeri
Sembilan. Activities at these clusters centre on contract farming and the formation of model
farms.

To further support this EPP’s upstream efforts, the MoA has overseen the establishment of
five R&D clusters, which focus on discovery, crop production and agronomy, standardisation
and product development, toxicology/pre-clinical and clinical studies, and processing
technology. Among developments that have emerged from this initiative include the
expected production of three prototypes from the NKEA Research Grant scheme for
commercialisation.

Downstream initiatives for this EPP are currently undertaken by eight anchor companies
appointed by the MoA, comprising Aning Resources Sdn Bhd, Biotropics Malaysia Bhd,
Bioalpha International Sdn Bhd, Nova Laboratories Sdn Bhd, Natureceuticals Sdn Bhd,
Natural Wellness Biotech (M) Sdn Bhd, The Mitomasa Sdn Bhd and Phyto Biznet Sdn Bhd.
These companies will spearhead the marketing and branding of nutraceuticals and botanical
drugs with scientifically-backed claims, ensuring Malaysian herbal products comply with
international health standards.

This EPP has also expanded by incorporating two Business Opportunities from the
Agriculture NKEA. These comprise Business Opportunity 1: Nutraceutical Products, to
include other targeted herbs on the nutraceuticals list; and Business Opportunity 2: Foreign
Distributor, aimed at establishing a nutraceutical distributor abroad.

EPP Lead

Herbal Development Office in Ministry of Agriculture

EPP Champions:
 Biotropics Malaysia Bhd
 Novalab Sdn Bhd
 Aning Resources Sdn Bhd
 Natural Wellness Sdn Bhd
 Natureceuticals Sdn Bhd
 Bioalpha International Sdn Bhd
 Phyto Biznets Sdn Bhd
 The Mitomasa Sdn Bhd
 Eastern Corridor Economic Regional Development Corporation

EPP 2: Edible Bird’s Nest Swiftlet Farming

Led by the Department of Veterinary Services (DVS), this EPP strives to increase upstream
production of edible bird’s nests (EBN). This will be achieved by building an additional 2,000
new farms yearly and six collection centres while guiding the industry towards developing
downstream, value-added products. Four anchor companies; Golden Silver Processing Sdn
Bhd, PT Swift Marketing Sdn Bhd, Yanming Resources Sdn Bhd and Duta Sialin Biotechnology
Sdn Bhd, have already committed investments to developing processing capacities for these
products.

The EPP also intends to regulate the industry and improve traceability by registering EBN
premises, incorporating traceability systems, enforcing Good Animal Husbandry Practices
(GAHP) and Good Manufacturing Practices.

EPP Lead
Department of Veterinary Services (DVS)

EPP Champions:
 Golden Silver Processing Sdn Bhd
 PT Swift Marketing Sdn Bhd
 Yanming Resources Sdn Bhd
 Duta Sialin Biotechnology Sdn Bhd

EPP 3: Mini-Estate Farming for Seaweed

This EPP, driven by Department of Fisheries (DoF), aims to transform the seaweed farming
industry into a high-yielding commercial-scale business by clustering farms under the
seaweed mini-estate initiative. Through this initiative, total production of seaweed is
expected to rise from 13,500 metric tonnes in 2010 to 150,000 metric tonnes in 2020.

Measures under this EPP place emphasis on improving downstream infrastructure and
research and development (R&D) efforts to process dry seaweed into high-value products
(e.g. semi-refined carrageenan and alkaline-treated chips), as well as exploring further uses
of seaweed. In line with this, this EPP’s project team has targeted the production of 8,640
MT of alkaline treatment chips and semi-refined.

Other efforts undertaken for this EPP include plans by the Sabah State Government to
gazette another 3,000 ha of land for seaweed production. Meanwhile, three universities,
The National University of Malaysia (UKM), Universiti Malaysia Sabah (UMS) and Universiti
Sains Malaysia (USM), are in the midst of commercialising eight seaweed products.

EPP Lead

Department of Fisheries

EPP Champions:
 Pertubuhan Peladang Kawasan Semporna
 Avanova Group Sdn Bhd
 Perdana Seaweed Farm
 SALS Agriculture
 NIZH Goodwill Sdn Bhd
 VC United Sdn Bhd
 Madesjaya Sdn Bhd
 Sebangkat Reef Eco-Plant
 UMS Link Sdn Bhd
 Ko-Nelayan Negeri Sabah
 Kluster Look Butun
 Kluster Gelam-Gelam
 Kluster Koperasi Bajau Laut
 Kluster Kuala Merotai
 Permata Sekitar Sdn Bhd

EPP 4: Integrated Cage Farming

By integrating cage farming, this EPP seeks to increase the production of high-value fish
species (e.g. sea bass, grouper, tilapia and lobster) to account for 28% of total aquaculture
production by 2020. The Department of Fisheries (DoF) will also identify anchor companies
to train, set standard operating procedures and guidelines for the industry, helping to create
an integrated approach for large-scale production – from hatchery to processing.

EPP Lead

Department of Fisheries (DoF)

EPP Champions:
 Pegagau Specialty Farming Sdn Bhd
 Y.S Inno Fisheries Sdn Bhd
 Trapia Malaysia Sdn Bhd
 Plentiful Harvest Sdn Bhd
 Prima Bumisetia Sdn Bhd
 Darvel Bay Hybrid Aquaculture Sdn Bhd
 Organic Aquaculture Sdn Bhd
 Lobster Aqua Technologies Sdn Bhd

EPP 5: Cattle Integration in Oil Palm Estates

This EPP, led by the Department of Veterinary Services (DVS), focuses on integrating and
rearing an additional 300,000 heads of cattle in large oil palm plantations by 2020. The
integration will be implemented by estate owners through a cattle breeding and rotational
grazing programme, in compliance with Good Animal Husbandry Practices (GAHP).
Two programmes were incorporated to support this effort: A feed programme to increase
the supply of locally developed feed to address the rising cost of production; and a breeding
programme through artificial insemination to fast-track the breeding of good quality cattle.

In 2012, DVS and PEMANDU identified the need to integrate cattle-rearing, representing the
upstream segment of beef production, with the downstream, production segment.
Following this, EPP Livestock: Full Value Chain was developed to incentivise downstream
players to move upstream and vice versa through collaboration with players under EPP 12:
Expansion of Cattle in Feedlots and EPP 16: Overseas Acquisition/Joint Venture of Cattle
Farms.

For 2013, this EPP targets the integration of 17,300 more heads of cattle in palm oil
plantations, with 5,400 cattle to undergo artificial insemination. The feed programme,
meanwhile, is expected to increase production of complete feed to 35,500 MT.

EPP Lead

Department of Veterinary Services

EPP Champions:
 FELCRA
 Espek Livestock Sdn Bhd
 Laka Temin Silaj Sdn Bhd
 Ladang Rakyat Terengganu Sdn Bhd
 Pertubuhan Peladang Negeri Pahang
 Narajaya Enterprise
 Aqil Berjaya Enterprise
 Kulim Livestock Sdn Bhd
 YPJ Plantation Sdn Bhd
 Pertubuhan Peladang Negeri Johor
 FELDA Plantation
 Johor Corporation
 Felda Farm Products Sdn Bhd
 Sawit Kinabalu Sdn Bhd
 Ladang Dafa Sdn Bhd
 Rimbunan Hijau Sdn Bhd
 Sarawak Land Consolidation and Rehabilitation Authority
 Sarawak Plantation Agriculture Development Sdn Bhd
 Nurinfra Mutiara Feedmill Sdn Bhd
 Nakasia Dagangan Sdn Bhd
 Kris Biotech Sdn Bhd
 Palm-Gen Sdn Bhd
 Falcon Livestock Sdn Bhd
 VAM Incorporated
 Ar-Raudhah Bio-tech Farm

EPP 6: Replicating Integrated Zone for Aquaculture Model (IZAQs) to Tap Market for
Premium Shrimp

Led by the Department of Fisheries (DoF), this EPP focuses on improving the production of
fully-certified export quality shrimp for premium markets by establishing an Integrated Zone
for Aquaculture Models (IZAQs). IZAQs comprise networks of industrial scale and land-based
aquaculture zones, with each zone, equipped with integrated infrastructure consisting
hatcheries, grow-out areas, a processing plant and feed mills, championed by an anchor
company.

Smallholders and SMEs are expected to participate in this project through contract farming
or profit-sharing agreements with anchor companies. By 2020, this EPP targets for the
establishment of 10,000 ha of IZAQs, while the total production from anchor companies that
have completed construction of their IZAQ is expected to reach 23,000 MT at the end of
2013.

EPP Lead

Department of Fisheries

EPP Champions:
 JEFI Aquatech Resources Sdn Bhd
 Hannan Corporation Sdn Bhd
 Pegagau Speciality Farming Sdn Bhd
 Blue Archipelago Bhd
 LKPP Corporation Sdn Bhd
 Sunlight InnoSeafood Sdn Bhd
 Asia Aquaculture Sdn Bhd
 QL Aquamarine Sdn Bhd
 KB Aquaculture Sdn Bhd
 BioDesaru Sdn Bhd
EPP 7: Premium Fruits and Vegetables

Led by the Department of Agriculture (DoA), this EPP aims to export local premium fruits
and vegetables to the Middle East and Europe, which import more than 50% of the global
production of higher quality local fruits and vegetables that comply with food safety
standards.

The DoA has identified 3,000 farmers who will be placed under anchor companies that will
manage the integrated supply chain model, gain market access and export the produce. Six
high-value non-seasonal tropical fruits (rock melon, starfruit, papaya, banana, pineapple and
jackfruit) and three high-value highland vegetables (lettuce, tomato and capsicum) have
been identified as target produce for this EPP.

Among other initiatives undertaken through this EPP include:

 Leveraging existing Permanent Food Production Zones (Taman Kekal Pengeluaran
Makanan – TKPM) to boost the production of the identified fruits and vegetables. To
support this effort, the DoA will collaborate with more states to raise the value of
premium fruits produced to at least RM40 million in more TKPMs. This will be
achieved by establishing an additional 1,000 ha of land to be used as production
zones. Additionally, one-stop centres will be established in respective states to
expedite land approval for stakeholders who wish to obtain premium fruit and
vegetable farmland.

This EPP has also expanded by incorporating Business Opportunity 9: Packaged Fruit
Production such as Jackfruit. This involves establishing minimal processing operations to
export ready-to-eat fresh jackfruit, juice and vacuum-fried chips to markets such as China.

On its part, the Ministry of Agriculture has targeted to increase the total export value of
Malaysian premium fruits and vegetables to RM400 million. This will be achieved by
strengthening ties with Malaysia’s existing trading partners to create more markets for the
country’s fruit and vegetables.

This EPP also works in synergy with the Rural Development National Key Result Area under
the Government Transformation Programme. Under this effort, the DoA is collaborating
with the Ministry of Rural and Regional Development to provide land for private companies
to expand while increasing the income of rural communities under the NKRA’s 21 st Century
Village initiative.1

EPP Lead

Department of Agriculture (DoA)

EPP Champions:

1
The 21st Century Village initiative aims to transform the liveability of rural areas and
develop villages into agriculture-driven economies.
 Exotic Star Sdn Bhd
 K.C Kwang & Sons Sdn Bhd
 JTP Trading Sdn Bhd
 Fresh Momentum Sdn Bhd
 Pertubuhan Peladang Negeri Pahang (PASFA)
 Far-East Import Export Sdn Bhd

EPP 8: Food Park

This EPP, driven by the Ministry of Agriculture (MoA), aims to consolidate the local
processed food industry by developing an integrated food park facility. The food park will
produce ready-to-eat packaged food by SMEs.

The packaged food will be marketed and distributed by anchor companies who will also
obtain product certification, package, brand, market, manage suppliers and help develop
small fragmented players through apprenticeship training.

EPP Lead

Ministry of Agriculture – Agro-based Industry Division

EPP Champions:
 Rukun Saksama Sdn Bhd
 Duria Resources Sdn Bhd
 Pertubuhan Peladang Negeri Johor
 Sunlight Inno Seafood Sdn Bhd

EPP 9: Fragrant Rice Varieties in Non-Irrigated Areas

This EPP focuses on planting fragrant rice (e.g. Jasmine or Basmati-type) on rain-fed areas to
increase the average national paddy yield, reducing Malaysia’s dependence on imported
rice. Initiatives under this EPP also seek to produce premium organic rice, with anchor
companies appointed to undertake the planting and commercialisation of fragrant rice
varieties developed by MARDI (Malaysia Agricultural Research & Development Institute).

As at June 2013, this EPP’s anchor companies have planted 297 ha of the 750 ha of fragrant
rice varieties targeted by MARDI for planting to increase total production to 2,500 ha.
MARDI will also identify more anchor companies to commercialise the fragrant rice varieties
produced while supporting the existing four players in their production and marketing
efforts. Additionally, MARDI will continue R&D efforts to produce new fragrant rice varieties
and agronomic packaging to support the commercialisation of these products.
EPP Lead

Malaysia Agricultural Research and Development Institute (MARDI)

EPP Champions:
 Infoculture Sdn Bhd
 Paddytech Resources Sdn Bhd
 Bionic Agro Sdn Bhd
 Birinbaru Enterprise

EPP 10: Strengthening Productivity of Paddy Farming in MADA

Led by MADA (Muda Agricultural Development Authority), this EPP aims to establish
Malaysia’s long-term food security and increase the income of paddy farmers. This will be
achieved by adopting the estate farming approach under a single management in the Muda
vicinity in Kedah, introducing a land amalgamation scheme for 50,000 ha (51% of the total
96,558 ha) of paddy fields by 2020.

The adoption of technologies will also be intensified across the production chain of the
paddy and rice industry, such as the introduction of new seed varieties, use of new nano
fertilisers, improved irrigation, and larger scale farm mechanisation. These initiatives aim to
raise the paddy yield from 5 MT per ha to 8 MT per ha by 2020.

The Muda granary area accounts for 37.1% of national rice production and 24.1% of the
total rice cultivation area in Malaysia. Together with rice industry regulator BERNAS, MADA
is finalising the establishment of a special purpose vehicle (SPV) to implement initiatives to
streamline the whole value chain of the industry, from seed production to the sale of rice.

In 2013, MADA aims to amalgamate another 5,000 ha of land in the Muda area, bringing the
total to 15,000 ha of land amalgamated under the estate farming model. A central
management is expected to manage the amalgamated land to increase the income of
participants by 5%. Meanwhile, the construction of infrastructure for seven irrigation blocks
will begin at Tambun Tulang, Pendang, Kepala Batas, Kubang Sepat, Pengkalan Kundur and
Tajar.

EPP Lead
 Muda Agricultural Development Authority (MADA)

EPP 11: Strengthening Productivity of Paddy Farming in Other Granaries

The estate farming approach, demonstrated in EPP 10: Strengthening Productivity of Paddy
Farming in MADA, will be replicated in seven other granaries in Malaysia to increase the
national productivity of paddy, as well as to ensure a steady income for farmers who plan to
exit paddy farming. The scheme will also be implemented in an identified area of 5,100 ha of
land in Batang Lupar and 5,000 ha in Kota Belud. This initiative will ensure that flood
mitigation and water management systems up to the tertiary level are put in place.

To improve productivity, this EPP, driven by the Ministry of Agriculture’s (MoA) Paddy and
Rice Division, will establish a research and development (R&D) programme to study the
drought tolerance and pest/disease resistance of rice crops to improve the yield of
Sarawak’s traditional rice varieties.

In 2013, this EPP aims to amalgamate another 5,400 ha in the seven IADAs (Integrated
Agricultural Development Authority), as well as in Kota Belud and Batang Lupur, Sarawak.
Following the model by MADA, each IADA will facilitate the farmer’s co-operatives to move
into downstream production to generate better returns for the farmers.

EPP Lead

Ministry of Agriculture – Paddy and Rice Division

EPP Champions:
 Kemubu Agricultural Development Authority (KADA)
 IADA Barat Laut
 IADA Seberang Perak
 IADA Kemasin-Semarak
 IADA Kerian Sg Manik
 IADA Pulau Pinang
 IADA KETARA
 Ministry of Modernisation of Agriculture, Sarawak (MOMA)
 Ministry of Agriculture and Food-based Industries, Sabah (MAFI)

EPP 12: Expansion of Cattle in Feedlots

This EPP aims to establish 300 satellite farms to support anchor companies involved in
feedlot operations, with the aim of improving the national self-sufficiency level for beef.
Anchor companies are tasked with overseeing operations of the entire value chain involved
in providing feedlot services while managing the integration and consolidation of
downstream processes.

Improvements are made in the downstream process through the enforcement of abattoir
certification, cold-chain delivery of chilled cuts, promotional exercises to create market
awareness of imported buffalo meat versus beef, and the development of other beef by-
products.

In 2013, this EPP targets to place another 20,000 heads of cattle on feedlots in existing
satellite farms.
This EPP, led by the Department of Veterinary Services (DVS), collaborates with EPP 5: Cattle
Integration in Oil Pam Estates and EPP 16: Overseas Acquisition/Joint Venture of Cattle
Farms to establish a fully integrated livestock value chain.

EPP Lead
Department of Veterinary Services

EPP Champion
 FELDA Gedung Makanan Negara

EPP 13: Dairy Clusters

This EPP aims to reduce Malaysia’s dependence on imported fresh milk by forming dairy
clusters under anchor companies to produce milk on a large-scale basis.

Anchor companies will oversee all aspects of the dairy cluster operations, from production
to marketing. Individual farms will be engaged by anchor companies, with a deal to
guarantee purchases at a pre-determined price. Steps will also be taken to upgrade existing
cold-chain milk facilities to ensure that milk quality is maintained during shipment from
farm to marketplace.

Among targets set for this EPP include:

 Identifying another anchor company to spearhead the development of dairy clusters
in the northern and eastern regions.
 Ensuring that existing clusters achieve their respective targeted milk production of
15 million litres in 2013, with existing anchor companies targeting to increase the
average milk production per cow per location in their clusters to 15 litres per
lactation per day from the current 10-11 litres.

EPP Lead

Department of Veterinary Services

EPP Champions:

 Evergreen Livestock Sdn Bhd

 Allied Dairy Sdn Bhd
 Golden Difference Sdn Bhd

EPP 14: Seed Industry Development

This EPP will review production methods of high-quality seeds and genetic material by using
Marker-Assisted Selection (MAS) technology. The MAS technology was introduced by
MARDI’s Centre for Market Discovery and Validation (CMDV) in 2011 to help select seeds
with desired traits, thus significantly reducing the number of breeding years and guesswork
required to develop high-quality progeny.

A National Seed Council was established to oversee the development of the local seed
industry and reduce Malaysia’s dependence on imported seeds and breeding material.
Anchor companies will spearhead the growth of this industry by expanding production to
cater for both domestic and export markets.

The CMDV will begin developing markers for selected commodities covering disease
resistance in tilapia, drought tolerance in rice, papaya dieback resistance, bacterial heart rot
resistance in pineapple, milk production in Sahiwal and Sahiwal-crossed cattle. These
markers will be available to the industry so that seeds with desired markers will be selected
for planting or breeding. The Ministry of Agriculture (MoA) will also implement an incentive
scheme to aid local seed players to further develop high-quality seeds locally.

EPP Lead

Ministry of Agriculture – Industry Support Division

EPP Champions:
 RB Biotech Sdn Bhd
 Green World Genetics Sdn Bhd

EPP 16: Overseas Acquisition/Joint Venture of Cattle Farms

This EPP, led by the Department of Veterinary Services (DVS), aims to secure a consistent
and affordable source of live animals required for breeding, placement in feedlots, and dairy
operations over the next decade. This initiative was expanded to review potential areas in
agriculture that could raise additional revenue for the country.

This EPP is the last component of the EPP Livestock: Full Value Chain with two other
livestock EPPs (EPP 5: Cattle Integration in Oil Pam Estates and EPP 12: Expansion of Cattle
in Feedlots) to achieve a sustainable local beef industry.

Participating companies of this EPP will also be given first rights to supply live animals to
companies under the livestock EPPs. For example, if the Government needs to procure
cattle for companies under EPP 5, participating companies under EPP 16 will be offered the
first bid to supply the cattle.

The DVS will continue monitoring the anchor companies under this EPP while incorporating
the feedlots into EPP Livestock: Full Value Chain to ensure a complete integration of the
value chain. The target is to achieve RM60 million in revenue generated from this project in
2013.

EPP Lead
Department of Veterinary Services

EPP Champions:

 SEDC Sarawak
 Ternakan Kamran Sdn Bhd
 Bumi Yadanar Sdn Bhd
 Huzaifah Farm Sdn Bhd

EPP 17: Pasar Komuniti (PAKAR)

This EPP, driven by the Federal Agriculture Marketing Authority (FAMA), targets to
transform and modernise various markets, as well as integrate local markets such as Pasar
Tani, Pasar Malam, Pasar Minggu, and Pasar Tamu into a much larger market known as
Pasar Komuniti (PAKAR), which will be equipped with amenities to facilitate cleanliness and
help traders increase their revenue.

FAMA is working with other relevant Government agencies to monitor the PAKARs, and is
currently identifying suitable sites and engaging market traders to establish the markets.

In addition to PAKARs, the project team is also evaluating the possibility of another type of
market, Pasar Karavan, to further increase the country’s GNI.

This EPP was moved from the Wholesale and Retail NKEA in 2012 and is expected to boost
the revenue of traders by up to 30%.

EPP Lead

Federal Agriculture Marketing Authority (FAMA)

Agriculture NKEA key contact:

NKEA-Agriculture@pemandu.gov.my