Sinergi CEO positioned to be a major fertiliser producer

PETALING JAYA: Sinergi Perdana Sdn Bhd, a government-initiated agricultural consortium, is poised to be one of the country's major fertiliser producers in the near future, said chief executive officer Mohd Zaid Jalil.

To start with, the company will finalise two major acquisitions by first quarter of 2012.

He told StarBiz Sinergi Perdana was confident to complete the acquisition of premium compound fertiliser company, Diversatech (M) Sdn Bhd and also taking over a major stake in government agencies-owned Konsortium Baja Nasional Sdn Bhd before end-March.

He said: “The two acquisitions will enable Sinergi Perdana to establish a platform to venture into large-scale fertiliser business.”

According to sources, the total investment costs for both acquisitions could be in the range of RM30mil to RM40mil.

Oil palm estates use up 2.23 million tonnes of fertiliser in Malaysia every year, from a total annual consumption of five million tonnes, according to analysts/

Zaid pointed out that Sinergi Perdana also planned to have about 40% to 50% share of the total local fertiliser market estimated at five million tonnes annually and worth about RM10bil.

Set up in June last year, Sinergi Perdana is a consortium represented by the Federal Land and Development Authority (Felda), Federal Land Consolidation and Rehabilitation Authority (Felcra) and Rubber Industry Smallholders' Development Authority (Risda) with an intended RM300mil paid-up capital.

Zaid said: “Given the strength of our stakeholders, Sinergi Perdana will be able to produce and supply the bulk of its fertilier output to the three national plantation agencies.

“We also see strong opportunities to supply to other government agencies and government-linked companies, which were involved in large-scale plantation and agriculture operations.”

On Konsortium Baja Nasional, Zaid said the outfit would be an ideal “fertiliser vehicle” for Sinergi Perdana, once the deal is completed.Going forward, he said Sinergi Perdana would focus extensively on increasing the existing production capacity via the setting up of additional compound fertiliser facilities with an estimated total investments of RM100mil.


“We hope to leverage on the strengths and expertise of our stakeholders to realise this objective.

“Therefore, we plan to increase Diversatech's production to 300,000 tonnes per annum from the existing 15,000 tonnes within the next three to five years,” added Zaid.

Of the country's total annual fertiliser consumption of five million tonnes, market analysts said oil palm plantation companies took up about 2.23 million tonnes, government bodies like Felda, Felcra, Salcra and Risda about 1.07 million tonnes, the National Farmers Organisation, the body responsible for the distribution of subsidised fertiliser, about 270,000 tonnes and the smallholders, 630,000 tonnes.

In Malaysia, fertilisers currently represent about 60% to 70% of oil palm planters' total production cost of RM1,100 to RM2,000 a tonne.

In another development, Sinergi Perdana would also venture into compound rubber manufacturing business via its proposed acquisition of Hose & Hose Sdn Bhd.

He said the plant produced rubber hose products and other rubber products, mainly for exports in almost 15 countries.

“We are in the midst of securing the deal,” he said, adding that the venture via the rubber compound plant would provide the gateway for Sinergi Perdana's foray into overseas markets.

Apart from the two areas of business, Sinergi Perdana would also focus its efforts to develop renewable energy (RE) initiatives, with the primary aim of fostering efficient operations in the palm oil industry.

Zaid said the company had recently inked an MoU with General Electric (GE) to undertake this initiative. He pointed out that “the MoU will enable SinergiPerdana and GE to explore the potential to develop RE initiative involving the generation of power from palm oil mill effluents for both captive power and commercial, on grid application.”

The collaboration would also look at the prospective development of a waste-water treatment solution as well as the solid waste gasification to power application. Under the agreement, the two parties will work together to review the outcome of the preliminary feasibility studies and cooperate with each other to determine the most effective implementation solutions that will be co-beneficial and aligned with the Government's efforts to establish Malaysia as a sustainable and green economic powerhouse.

Zaid sees 2012 as an exciting phase for Sinergi Perdana to operate its maiden proposed ventures in fertiliser, compound rubber and RE-related projects.

By HANIM ADNAN
nem@thestar.com.my