Malaysia to invest in plantations in Indonesia

Malaysia to invest in plantations in Indonesia

KUALA LUMPUR (AFP): Malaysia, once the world's largest natural
rubber producer, yesterday said it was no longer interested in
expanding rubber cultivation and would instead invest in
plantations in Indonesia.

"Rubber planting needs a lot of land, but its price could not
be controlled and fluctuated according to the market situation,"
Prime Minister Mahathir Mohamad was quoted by Bernama news agency
as saying in Jitra, in his northern homestate Kedah.

Malaysia, instead, planned to shift future investments in
rubber and oil palm plantations in Indonesia, which still had
vast land and enjoyed lower production cost because of cheaper
labor, he said.

He said an acre (0.4 hectares) of land, if planted with
rubber, could support a single farmer, whereas the same land
deployed for industries could support up to 200 people.

Malaysia, which saw production shrink to 1.07 million tons
last year from 1.66 million tons at its peak in 1988, is now the
world's third largest natural rubber producer, after Thailand and
Indonesia.

Thailand produced 1.5 million tons while Indonesia 1.3 million
tons last year. The three producers account for 75 percent of the
total world output.