Study on plantation industry in Malaysia; Lotus Forex Limited

Abstract

Malaysian economy has proved its resilience during tne recent global crisis and it is set on its goal to become a developed nation by 2020. It posted a fast recovery and the GDP is growing at a rate of 10.1% in the first quarter of 2010. Plantation industry has been at the forefront as a significant contributor to the Malaysian economy. Palm oil and oil based products remained as the second largest revenue earner for the country with contribution of 9.6% to the total exports in March 2010. The current study includes an analysis of the plantation industry and its competiveness. The major players in the value chain are identified along with the role played by each player. The future growth potential of the industry is . also assessed to ensure a fruitful long term association with the industry. Multiple associations involved in the plantation business such as MPOB (Malaysian Palm Oil Board), MAPA (Malayan Agricultural Producers Association) were contacted to get a sound understanding of the processes. The next part explores the salary disbursement process prevalent in the plantation industry and identifies the challenges faced in the process. A behavioural study of the workers was done by visiting the plantation estates in two different locations. Depth interview of workers as well as the employers was conducted to understand the culture, life style and processes involved. The study reveals the extent of immigrant workers in the industry, the procedure of salary disbursement, current remittance and financial services available to the workers. Based on the facts about the current salary and remittance processes, three approaches are considered to provide services to the plantation workers. The options are suggested to overcome the difficulties identified while reducing cash management to avoid unnecessary risk. The benefits for each party involved in the business model are discussed in detail: A possible implementation strategy for each approach along with the limitations is also suggested. The final recommendation is suggested that .. entails a..comhination .. N. of two approaches in a phased manner to provide remittance as well as payroll management services to the workers. Finally contingency measures are advised in case of any possible setback to the plan.