I currently own two pieces of land:
a.) Industrial Land in Sungai Buloh, Selangor (1 acre)
b.) Agricultural Land in Kluang, Johor (24 acre)
- half of the land is already planted with palm oil

I am having a dilemma, I live in Klang Valley but I do not have sufficient funds to build a factory on the Sungai Buloh land and I am reluctant to migrate to Kluang to manage the palm oil estate. What should I do? Sell the industrial land and concentrate on palm oil? Sell the agriculture land and invest on the industrial land? Acquire a loan to build a factory? Or sell both lands and focus on other investments?

Given the current political uncertainty after the 8th of March 2008 elections and the future of palm oil, which is the best choice?

Please advise me on my next move. Thanks.

This post has been edited by ConfusedCreep: Apr 1 2008, 05:06 PM

Question for you:

1) Do you have any expertise to run/operate a factory? Or are you already in some business where you need or will need a factory to work from.

2) How much do you know about oil palm cultivation?

If your answer is in the negative zone to both, perhaps you may want to consider

1) lease the land to someone else who needs to build their factory
2) either lease the land to some 3rd party farmer or get someone to help oversee contractors to work on oil palm crops. I know many ppl doing this while they work on their regular job/ ohter investment/businesses.

Negative to both questions.


Good suggestion but will have a hard time finding interested parties due to the political uncertainty in Selangor.

3rd party farmers will take a huge sum of profit. Any estimates?

u sounds like a secondary school kid which inheritated the land from ur ancestors.

an acre of industrial land in sungai buloh, does not sounds too tempting. but, 24 acres of palm estates sounds pretty good. if the trees are about 3 to 6 years, why not just keep it since acre can normally fetch about 1 tonne of fruits and can easily sell up to rm 650 a tonne based on monthly basis, so 24 acres will generate u rm 15,000 profit. but, the weird thing is u wanna sell it or lease it.

ask experienced people around u rather than talking rubbishes here.

You must also consider that half of the land is still empty. Besides, RM15k is not the net profit.

That's what I am currently doing right now. And if you think I am talking rubbish here, I am not. I am trying to be serious here and I am open to opinions, not flames by you.

This post has been edited by ConfusedCreep: Apr 1 2008, 01:08 PM

...........edited

This post has been edited by imu11: Apr 1 2008, 06:19 PM

ConfusedCreep,

(a) -> Even if you build the factory, you are not certain that you can make money.

(b) is profitable and cash flow positive. Focus on that.

<< the future of palm oil,>>

Palm oil is always profitable. It is just a question of whether you make MORE or LESS money. People has to eat. And, Palm oil is the cheapest vegetable oil around.

You should migrate to Kluang and focus on the Palm Oil plantation. You can hire people but you need to supervise / monitor them so that they do not steal from you.

One hundred acres gives you around 15K to 20K of monthly income. So, 24 acres is 3.5K to 5K per month when fully planted and produce fruit.

How old is the tree?? Is it producing fruit yet?? Do you have the money to plant the rest?? I think bank only loan about 30% of the value of the land. This is just a guess. The lands may worth around 20K to 30K per acres. So, you are talking about 480K to 720K. 30% of that is around 150K to 200K.

Summary, forget factory. Focus on palm oil.

Dreamer

What tpl66 said was true.
He's quite familiar with oil palm business.
The prices he mentioned is also quite current.

Of course, RM15k is not net. After deducting labour, transportation, fertilizer etc. RM10k plus minus.

BUT another thing to consider, if you don't have a trading license, you can't deal directly with the oil factory. If you need to deal through a middle man, obviously you don't get market rate.

Yes, half of the land has been planted with palm oil(still young) and have been producing fruit. How much money do I need to plant the rest? I am opting for the cheapest planting method possible.


Now, I am confused. 3.5k to 5k per month (as dreamer101 mentioned) or 10k+- per month (as scorgio mentioned)?

ConfusedCreep,

1) I am speaking in net income while other is talking in gross income.

2) My number is at least 3 to 4 years old. So, the profit might a lot higher now.

<<I am opting for the cheapest planting method possible.>>

3) Do not do that. That is penny wise pound foolish. You will be collecting from the tree for the next 20 to 25 years Every small improvement yields a lot of $$$.

4) Suffer and tolerate for 2 to 3 years. Then, you have enough cash flow / income to enjoy the rest of your life.

Dreamer

I agree with the rest here try to focus on the palm oil estate. are there any other agriculture land adjacent to your land? you never know when your neighbours is in trouble and in need of the money they might sell the land off to you and you can expand it to 40, 60 acres.

plus oil palm plantation is fully supported by Malaysian government now **especially if you are bumi**, future of palm oil?? Malaysia is biggest exporter of oil palm, the government invest heavily in this industry, so what do you think?

my dad also already ask me whether I want to buy a 20 acres of land to plant oil palm too in sabah. sadly I only have enough money to ngam ngam buy the land(land is still cheap in sabah, around 6-10k per acre, depends on development of the land), not enough money to buy raw material to plant the tree yet.

do you know how many people wish to have oil palm estate...? consider yourself lucky man...

Buying more land is not in my agenda right now as I don't even have any experience managing palm oil estates.


Yes, Malaysian government is is encouraging palm oil plantations but 2 factors must be looked at. (I am a non-bumi)
1.) Will small farmers like me be capitalized by big palm oil companies
2.) Will palm oil industry collapse in the next 3-4 years when the plantations in Indonesia are ready to produce yield. A similar situation happened to rubber plantations not so long ago.

If you buy the land in Sabah, are you willing to migrate there to manage the estate and leave your family and friends? (if you are from Peninsular Malaysia) Or are your going to lease 3rd party farmers to do the job for you?

Yes, I admit I am lucky as I inherited the lands. Nonetheless, I have the responsibility to complete the tasks my late dad was unable to finish and to take good care of my other family members. If managing palm oil estates is not worth the risk and is unreliable, selling it off and do other investments may be the best option, right?

This post has been edited by ConfusedCreep: Apr 2 2008, 11:44 AM

ok, this thread is getting alive now. Creepyconfused, what i meant in my previous post is u will need to seek advices from someone close to u and have a good investment brain too.

the price i told u is last updated on april, if u said a full 24 acres can only generate 4-5 k after all the charges, that is bullshit.

ok, i never realised that u mentioned only half are planted with palm tree, (perhaps u had edited after i posted),

palm oil farmer are taking a chunck of profit now cause the cpo is in bubbling, which the price too high without a good reason. eventually, the winner will still on the refinery side.

so, since u just planted, it will take u appx 24 months to grow fruits, which also depends on which crop u use (crop, is a complicated business, will chat about it next time)

But, what u said, COMPETITION FROM INDONESIA WILL MAKE AN IMPACT, is true. Thus, u and i can never predict what will the plantation industry will happen after 3 years.

Lastly, i would like to emphasize that our Government did very little into encouraing palm plantation and also refinery sector. dont forget, they tax u rm 40 out from a tonne of fruit u sell...

U do not need license to sell the fruits, unless YOU ARE A COLLECTOR. If u sell the fruits to the middle man (collector), they will charge u about rm 3 - rm5 a tonne.

so, basically, in johor, u can easily get good contacts from the refinery factory to buy ur fruits, but TRANSPORTATION IS A BIG OBSTACLES for many farmers.

Finally, if you have nice and good palm fruit, YOU DONT NEED TO WORRY THERE WILL BE NO BUYER.


I GIVE THE ABOVE ADVICES AND OPINIONS BECAUSE I AM IN THE PALM OIL REFINERY SECTOR.

well, experience can be learn, no? you can also log in to this oil palm forum( I forgot the exact url) to ask real oil palm cultivators how to manage the estates.

that is the risk you have to bear, don't tell me there's no risk if you are going to open the factory in selangor. you have to compare the risk, write it on a piece of paper what is the SWOT analysis in these 2 businesses. which have more pros, which have more cons.

yes ofcourse I am willing to, I am already staying here in UK without family and friends for more than 2 years now. sabah and peninsular is only one sea away. and your distance between johor and selangor is even reachable via motor vehicle.

that's what I am saying, analize the strenght and weakness of palm oil business compare with your factory business. which one will bring more profit, and less risk. and not to force yourself to run the oil palm business because of the burden of carryng the responsibility. heck if you can run microsoft company, why should you bother about running oil palm estates?


my observation is that you are still very young, like most young adults out there I believe you dislike agriculture business aka farmer because it sounds like low class,owning a factory sounds cool and high class, am I right? and you are reluctant to leave your friends in Klang valley because you still want to enjoy life in big city. am I right?

If you are poor and given this opportunity, you wouldn't ask this queation in the 1st place, as I said before, treasure what you have.

So nice to convert your pounds into land.

I reckon West Malaysians cannot buy land and properties in East Malaysia, or was there, a change of ruling?

this is a total bullshit, show me the prove that the government support it fully. they support and invest nothing, BUT IN GOOD TAXING THE PRIVATE PLANTATION OWNER AND REFINERY FACTORY.

dont talk about felda and GH, there belongs to the bumi.

chinese use all the best efforts to profit legally from palm.

TO BUY LAND IN SABAH ? U MEAN RESERVE LAND ? i think most are grabbed by bumi at cheap cheap price .... if chinese wanna buy, i think the undertable will cost more than the price of the land.

keep your vulgar words to yourself, you have serious attitude problem. go and get anger management.

All,

People cannot eat Rubber. Palm oil is the lowest cost producing vegetable oil. Population is increasing and fastest growing economy are China and India that need a lot of foods. So, palm oil's price may be lower but it is still higher than the cost of producing it. So, you will still be profitable in the future.

Dreamer

I found a good news on Malaysian palm oil.

Palm Oil Rallies for First Time in Five Days on Indian Demand
http://www.bloomberg.com/apps/news?pid=206...9Ag&refer=india

This means that we can expect higher demand for palm oil in the future, which may surplus the added supply int the next few years by Indonesia?

do i have attitude problem ? yes, indeed i am, which i also believe i am free to talk and also give correct information instead of crapping. asi i said, give me a firm prove regarding ur FULL GOVERNMENT SUPPORT. i am not a bumi, that is why i can tell u all the truth in the real business world...

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Added on April 2, 2008, 9:42 pmdreamer, palm oil, is not just for cooking oil. if u said cooking oil, it can be extracted from many other sources, bean, sunflower, etc, but, it will eventually how they promote it.

palm oil, bought by many importer, is not mainly for cooking oil, but, we extract a component in the oil to make something else ( is not a good ideal to say which component in the oil that extracted ), but, that is the reason.

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Added on April 2, 2008, 9:44 pmas i said, the cpo price is bubbling, u can never predict the commodity price, if u and i can, we will be second WARREN BUFFET. palm oil is a commodity that different from steel, cause palm is recycleble.

This post has been edited by tpl66: Apr 2 2008, 09:45 PM