Production of OPF Hay Feed Pellet

Production of OPF Hay Feed Pellet

Project Cost: MYR168 million

Amount Invested : –

Amount Required : –

Knowledge / Experience Required: finance; internationalisation

Proposed Investor’s Role: part-time; others (Business Partner)

Industry: agriculture; manufacturing; industry products

Project Stage: start-up

Information Memorandum:

This proposal focuses on the production of pelleted livestock feeds from oil palm fronds targeted for the local and overseas market. In specific, this initiative seeks for processing and marketing of livestock hay feeds based on oil palm fronds (OPF), palm kernel cake (PKC) and Kenaf.

Abundant supply of agro-industry wastes in Malaysia particularly from oil palm industry has created interest in turning the waste product into animal feeds. Currently, Malaysia is still the leader in oil palm production, which produced approximately 18.77 million metric tons (on a dry matter basis) of oil palm fronds since 1994. Oil palm fronds can be used as a substitute for grasses in cases where forage of fodder is a limiting factor. The recommended level of oil palm fronds in the total mixed rations ( on dry matter basis) are 50% for beef cattle and 30% for dairy cattle and goats.

Livestock hay feeds based on oil palm fronds (OPF) have tremendous export potential with established markets in Japan, South Korea and Taiwan. Worldwide annual gross turnover of products in this category amounted to more than 30 million metric tons (worth in excess of USD3 billion). In order to capture a portion of this overseas markets, we propose to build a state-of-the-art-factory that will have a capacity of producing up to 18,000 metric tons of OPF pellets per year. Total expenditures are estimated to be about RM3.74 million. In addition, a pre-operational expenditures is of RM1.5 is needed to sustain at least 12 months operation primarily for the purchase of raw materials (OPF), start-up and payment of salaries. The total project investment shall be about RM5.24 million for the next 5 year.

Our projected cash flow analysis indicated that the investment would yield an encouraging Internal Rate of Return (IRR) of about 22%. Furthermore, this project is considered to be an economically viable venture because production breakeven point (9,400 metric tons per year) was reached when factory output was at about 37% of maximum production output.

Contact Information

Executive Chairman/ CEO


Postal Address : 23A Jln Muafakat 1, Taman Meru Selatan
State : Klang Selabgor
Post Code : 41050 Klang
Country : Malaysia

Telephone : +603 78772553
Fax : +60378778553
Mobile: +60192558335