Compugates scents lucrative returns from gaharu estate

COMPUGATES Holdings Bhd (5037) , a distributor of prepaid cards and other information technology and office equipment, expects its gaharu plantation business to make up half of the revenue in five years.

The group recently invested some RM1.1 million to plant gaharu trees on 21.87ha in Kuala Kangsar, Perak. It will plant 500 seedlings on a 0.40ha site.

The value of each tree upon harvest in five years is estimated to be between RM3,000 and RM10,000, depending on the quality. This means that the group could fetch returns of anywhere from RM75 million to RM250 million.

The trees are also able to generate an income from year one as Compugates could harvest its leaves to make tea and use its branches for wood chips. Gaharu tea leaves are popular for their calcium and zinc nutrients which can be used to clear toxins from the body.
The tea leaves alone could generate an income of about RM1,000 per 0.40ha a month or about RM50,000 a month for the group.

"This is our pilot project. We will gauge the success of this plantation and in six months, we might look for more land to expand the gaharu plantation," said managing director Goh Kheng Peow in an interview with Business Times in Kuala Lumpur recently.

In early June, it sealed an agreement with Envirotech Management Sdn Bhd, a company under Gaharu Technologies Group that has years of experience in the research and development (R&D) of gaharu trees.

Its R&D results in higher yield, using improved inoculation method, a shorter cultivation period and hardier plants but requires minimal maintenance cost of about RM1 per tree a month.

Under the agreement, Envirotech Management will help Compugates with gaharu-related business support from consultation, cultivation, maintenance, harvesting to the extraction and sale of its products.

"Gaharu planting is a huge shift from our core business but this is a highly lucrative business and we have the assistance from Envirotech. Our main business will continue as usual," said Goh.

A kilogram of unprocessed gaharu heartwood, which is used in perfume, wood chips, fragrant oil and incense, can fetch as much as RM10,000. Currently, countries producing gaharu from the wild and plantations can only meet less than a third of the world's demand.


By Zurinna Raja Adam