Thursday 28 Mar 2024
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This article first appeared in The Edge Financial Daily on October 16, 2017

KUALA LUMPUR: Malaysian investors in the Netherlands, particularly palm oil players, are urged to take advantage of Dutch universities’ strength in research and development (R&D) to help expand their market in Europe.

Netherlands ambassador to Malaysia Karin Mossenlechner, who is hoping to encourage more Malaysian investments in her country, used palm oil players as an example as they contribute up to 60% of some €160 million (RM795.53 million) worth of Malaysian investments in the country.

Among the 48 Malaysian companies or so employing about 1,600 people in the Netherlands now, she named Kuala Lumpur Kepong Bhd, Sime Darby Bhd and IOI Corp Bhd as the largest Malaysian investors there.

“Palm oil has the potential to be applied in high value-added food products. Examples are infant formulas and food products for people with special dietary requirements, such as the growing number of elderly people,” said Mossenlechner in a recent interview with The Edge Financial Daily.

In 2015, 17.7% of the Dutch population was above the age of 65, and the number was expected to grow. Therein lies the opportunity to expand in Europe by innovating products that serve markets like the elderly, supported by the availability of R&D in Dutch universities, she said.

“This still requires research and for Malaysian palm oil companies, it is of strategic importance to initiate, or at least take part in, such research.

“Malaysian companies cannot rely on the model of producing in Malaysia and exporting to the world, but have to actively participate in Europe because there are fundamental changes in the market,” she stressed.

She highlighted that tertiary education institutions in the Netherlands Food Valley, like the University of Wageningen and University of Utrecht, have top rankings worldwide in the area of food technology and offer excellent facilities for this.

She also suggested that Dutch energy experts and Malaysian palm oil players collaborate to turn biomass and biowaste into energy, and to generate more yield from oil palm plantations.

“We want to help make the palm oil sector more sustainable and work towards a bio-based economy, which is crucial to the people, planet and profits,” Mossenlechner said.

While the palm oil sector has traditionally had a strong presence in the Netherlands, the country is also keen to see more investments from companies in other sectors, such as rubber or rubber-related ones, “where we are also seeing a growing interest, for instance, in the fields of medical disposables and automotive components”, she said.

Rubber technology development in the Netherlands, she said, is centred on improving rubber’s resistance against the ozone’s influence that causes rubber products to disintegrate.

She said Malaysia has several world-status rubber and palm oil companies, but pointed out that it is still important “to internationalise their presence in Europe and in the Netherlands”, be it in the areas of research and technology, logistics or storage.

In the automotive industry, leather car seat manufacturers Pecca Group Bhd and DK Leather Corp Bhd have subsidiaries in the Netherlands where seats are assembled for the European market. Automotive components and parts producer APM Automotive Holdings Bhd also has a presence in the country.

Mossenlechner’s emphasis on R&D also stems from the fact that companies which conduct R&D are eligible for a reduced corporate income tax of 5%, compared with the usual 25%.

In promoting the Netherlands as a strategic investment destination, she said it is up to 20% cheaper to do business in its key cities of Amsterdam and Rotterdam in terms of cost of labour, office rental and transportation of goods, as opposed to comparable cities in other Western European countries.

She also highlighted that Malaysian companies get to enjoy the same ease of setting up a business in the Netherlands, compared to the locals, in that they can set up a zero-capital private company or BV (besloten vennootschap) with limited liability, with just one director and shareholder, within three weeks.

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