TSH Resources
Malaysia has in recent years been very conscious of the environment, sustainability and the development of green technology. The Government is investing a lot of human capital and economic capital in the development of this sector. As one of the leading companies in green sustainability in plantations and energy sources in Malaysia, can you give us an insight into how it all started, and what are the challenges you have to overcome in order for the country and its industries to develop in a sustainable way?
I think that we do our part as a member of the industry. I would not claim that we are leaders in green energy and green environment. We are just doing our bit. We started with green energy in 2006 by running a 12 MW plant and we were able to connect to the grid.
A few projects are now certified under CDM. We are not a pioneer, but we are placing a fair bit of effort on the environment. We have a biomass power plant and we also have biogas. We have 2 more registered under CDM. We have a few projects now. The 12 MW biomass project has been running for quite some time now.
TSH Resources’ core business is plantations. Can you give us a brief overview of where the industry is heading and what are the new opportunities arising for companies exploiting plantations such as palm oil?
I think it is a fairly open competition, but we do realize that for us to be a successful plantation company, acquiring strategically located land is one thing, but to be able to come up with human resources development, systematic management and to be able to come up with a sustainable business, that is the core of the whole thing. The industry started in Malaysia maybe 40 years ago in a bigger way, but in Indonesia or other areas where new plantations are opened up every year, you need new people and a systematic way of management. That becomes a challenge. The whole objective concerns how to manage those factors and how to sustain the business in the long-term.
As far as the business is concerned, I think it is a good business to be in. we are fairly optimistic with the explosion in the population and the growth of the middle class especially in Asia and India. I think the potential is there. Another aspect of development is the fact that people are more conscious of the environment.
How are you transferring know-how from one country to another? For example you have plantations in Indonesia. Are you taking human capital from Malaysia and taking them to Indonesia, or are you training the people depending on where your plantations are?
When we started in Indonesia, we were very short of human capital. Malaysia is so much more established. Slowly but surely we had to develop our own human capital, so we cannot depend so much on Malaysian human capital. The Indonesians would not want too many Malaysians to be involved in the Indonesian business, so I think we are in line with what Indonesia is trying to do. We have a training school in Indonesia to develop human capital.
TSH has numerous rewards for corporate social responsibility (CSR), mainly for educating its staff. What motivates you to give something back to the community?
When we expanded our business in Indonesia we wanted to help the community as well, especially within the province and district. We would like to provide opportunities for locals to take part in staff level and higher level skills, so as we progress we can also upgrade. This is important. We are prepared to improve the living standards of the community around the plantation. We are adding decent facilities and we build proper housing. We cannot only develop our business per se and ignore the community. You have this huge gap regarding prosperity. They will also benefit from our development if we bring them in. We believe that we have to work with the community closely, especially for Indonesia.
We start with houses and medical care first, and subsequently we provide child care. As the plantation develops, we need to build schools. Our main aim is to build the company with the community. We do not believe in building our company in isolation. We believe that we have to bring the community in to be part and parcel of the development. The infrastructure is definitely financed by us. We believe in retaining the talent in the long-term. They have to be physically part of you. Human resources are difficult to come by, so we believe in a long-term approach. That is what we are doing.
Knowledge is power. Moving on to a different type of investment, I would like to talk about new technology and research and development (R&D). I imagine you invest a lot of your time and money in R&D and technology. What kinds of R&D and investment in technology are you doing right now?
For the plantations, it would be improving yields and biotech. You want to be more productive. We have been working on this for the past 6 to 7 years in order to improve productivity in the longer term. We are looking at high yielding tissue culture material.
How do you view foreign investment in green technology at the moment in Malaysia? We are seeing more and more American capital coming into Malaysia. How do you view the future and the US and Malaysia working together in terms of green energy?
I do not know about America specifically, but I think there are 2 or 3 solar power energy projects to be implemented. I think the Government is also doing what it can to provide attractive tariffs. I believe this is a step in the right direction for the good of the environment. But I do not think it is going to be so massive because green might not be as feasible in Malaysia, but maybe solar could be an option.
How were the beginnings of the company, and how have things changed until now? Where are you taking the company?
We started in the cocoa business, not the palm oil business. We started in 1986. We only got involved in palm oil in 1997. So in terms of the palm oil business, we are pretty new. We have expanded from Sabah since then and we have gone into Indonesia. We have been in Indonesia since 2003. We are a pretty young company in the palm oil industry, but we believe in research, innovation and investment in technology. For a pretty young company like TSH, we have invested over 25 million in tissue culture. Most people have been in the industry for 50 to 100 years, but I think we are the first ones involved in this. We also have our own training school and we believe in developing talent.
How is the business going?
We diversified in the 1990s. We developed in the market and we have a good brand, but unfortunately we have been affected for the past 2 to 3 years, especially after the financial crisis in Europe and the US. The brand is doing OK and we are diversifying in the market. We hope that next year and the year after will be a better time for us. We have been affected by the crisis in the US and Europe. That is why we have redirected our focus on Asia. We cannot be too dependent on Europe.
What are your dreams and motivations for the next 5years? Where do you want to see TSH Resources in the next 5 years?
We will continue to work hard, but I also think that we have to keep ensuring that the community is part of us. Of course, we continue to work very hard. Hopefully things will happen at a faster pace. I think we will accelerate our growth. I think we will want to expand more into the plantation business, but at the same time we will take the community into consideration.
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