Rabobank sees potential in Northern Corridor Malaysia

RABOBANK International, the world's leading financier in the food and agribusiness sector, wants to be actively involved in the development of Malaysia's Northern Corridor Economic Region.



Rabobank food and agribusiness head of strategic advisory and research for South-East Asia Thomas Lee Bauer said the bank is studying how it can participate in the project.


"There is a huge role that Rabobank can play. The bank fits perfectly into it," he told Business Times in an interview.


Proposed under the Ninth Malaysia Plan (9MP: 2006-2010), the Northern Corridor covers the agricultural areas of Penang, Seberang Prai, North Perak, Kedah and Perlis.


Government-owned Synergy Drive Sdn Bhd has been tasked to accelerate development in the Northern Corridor, which is envisaged to be a hub for food and agricultural products.


He said the strength of the Netherlands-based Rabobank lies in its agribusiness experts worldwide.


The century-old Rabobank has "AAA" credit ratings from Standard & Poor's and "AAA" from Moody's, making it the only privately-owned bank in the world to achieve the status.


Rabobank launched Rabobank Nederland Labuan in Labuan in March 2005, while its marketing office in Kuala Lumpur was opened in December 2005.


In Malaysia, the Dutch farmers' cooperative bank offers basic interest swap, corporate lending, term loans, structured trade finance, foreign exchange, risk management, merger and acquisition, as well as food and agribusiness advisory services.


On whether Rabobank plans to establish a local retail banking , Bauer said: "Rabobank is currently not doing that, but we never know. Never say never."


He said Rabobank is bullish about Malaysia's economy and its agribusiness, which is supported by the right investment climate and the Government's emphasis on agribusiness.


For niche halal sector, for example, Bauer said Rabobank can help players to brand their products so that Malaysian halal products fetch premium prices.


"We can increase the profit margin for halal food producers. There is market for higher-end halal products. The key is to open up the right market," he said, adding that other potential areas include beef and dairy sector.


In the palm oil sector, Bauer said Rabobank would concentrate on value-added products.


"Biodiesel is a big growth area. There is a lot more to be done on external marketing in this area," he said, adding that companies from Europe are looking at feedstock from Malaysia for their biofuel projects.