Special Feature
This is a video report about
World Business: A couple of
years ago, with surging
demand for biofuel from
Europe and riding crude oil
prices, investors rushed to
build plants to turn palm oil
into biodiesel. But with
falling oil prices and
changing opinions towards
biofuel many of those
projects were put on hold.
To adapt, biofuel producers
now have to be a little more
creative.
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| Hovid to plant oil palms in Colombia |
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| author : Business Times |
Date :10 June 2010 |
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By Ooi Tee Ching
Published: 2010/06/10
PHARMACEUTICAL company Hovid Bhd (7213), via subsidiary Agrovid SA, plans to invest RM3 million over five years to plant oil palms in Colombia.
"It wasn't an overnight decision. We thought about it as early as 10 years ago," Hovid managing director David Ho told Business Times in a telephone interview from Ipoh.
"We ventured into Colombia to sell drugs - the legal ones," Ho said with a laugh. "We're selling over-the-counter medicine."
Over the years, three successive Colombian ambassadors to Malaysia have persistently presented investment opportunities in Colombia's agriculture to Hovid.
"After numerous visits and walkabouts in rural Colombia, we made our decision. Contrary to news of Colombia being a crime-infested place, I actually find it a safe place," Ho said.
In mid-2008, Hovid bought two parcels of agriculture land measuring 3,299ha in Alto Manacacias, Puerto Gaitan, for RM3.6 million from a local, named Cecilia Rosas De Bustos.
"This (investment) is a long-term move to secure adequate supply of palm oil phytonutrients for our health supplement business," Ho added.
Hovid subsidiary Carotech Bhd extracts and sells palm oil phytonutrients such as tocotrienols, lycopene and co-enzyme Q10 for use in medical tests, health supplements and anti-ageing cosmecueticals.
After extracting phytonutrients from virgin palm oil via molecullar distillation, scientists are left with another product called methyl ester.
Ho explained that methyl ester is essentially biodiesel. "From virgin palm oil, we get the phytonutrients for medical use, and what's left can be used for fuel."
Agrovid is also planning to sell biodiesel there.
Colombia is already mandating 5 per cent of its national diesel usage to incorporate biodiesel.
"Fuel usage there was never subsidised. So it is easier for the Colombian government to implement its B5 mandate," Ho said.
Two years have passed since Hovid bought the plots of soyafields in Colombia.
Asked why Agrovid was slow to replant the soya crop with oil palms, Ho said that land transfer technicalities took longer than he had initially estimated.
"Colombian land laws are structured in such a way that they are suited for small- to medium-sized farmers," he said. "It is coming around now. We hope to forge ahead with our plans by the end of this year."
Ho expressed optimism about planting oil palms in Colombia. It is, after all, the fifth largest palm oil producing country in the world.
Agrovid is more likely to source oil palm seedlings from Latin America instead of shipping hybrids from Malaysia.
"We're not necessarily looking to plant DXP hybrids. Our priority is to source for oil palms that can produce high concentrates of tocotrienols," he said.
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