Many may be unaware that the lucrative edible bird’s nest industry is part of PEMANDU’s Economic Transformation Plan (ETP)’s EPP 2 and listed as a High Value Industry (HVI) with a projected RM5 billion market value in 2020. Loke Yeu Loong, Group Managing Director and co-founder of Swiftlet Eco Park Group of Companies, the world’s largest and only licensed and certified swiftlet eco park and edible bird’s nest supply chain company, shares in an interview with Top 10 of Malaysia why the Group is ideally positioned to spearhead the edible bird’s nest industry and how he plans to revolutionise it to an even greater scale.
Loke Yeu Loong is a man who believes that challenges and crises are merely opportunities in disguise. “Swiftlet farming in Malaysia only started in the 1990s when Indonesia faced forest fires, which drove millions of swiftlets to migrate to Malaysia. What appeared as a challenge to one country became an opportunity for another,” says the Group Managing Director of Swiftlet Eco Park Group of Companies (SEP Group). With a global production of RM15 billion worth of raw edible bird’s nest, and a major portion of it coming from Indonesia (60%), Malaysia (25%) and Thailand (10%), it is truly a golden opportunity indeed. So much so that the former property development and stock broking veteran went into the lucrative swiftlet farming business in 2000 with his partner Dato’ Sri Dr Abdullah Fadzil Che Wan who was formerly a deputy minister in the Foreign Affairs and Defence ministries. “I’ve always had an avid interest in the bird’s nest industry, to the extent of even going to Indonesia to learn the effective techniques in swiftlet farming. Bird’s nest has been an instrumental part of traditional Chinese medicine (TCM) for centuries, and will remain so for many centuries to come.”
At that time, swiftlets were building their nests in towns and cities, which became a health hazard and public nuisance to residents. “This challenge gave us the opportunity to come up with the novel idea of developing an eco-park for swiftlet ranching away from these residential and commercial areas, which not only addresses the health hazard issue but is also a sustainable source of revenue,” says Loke, whose proposal met the approval of the federal government and state’s local authorities. In 2004, Swiftlet Eco Park, the world’s first legal, structured park for swiftlet farming was jointly established in Manjung, Perak by SEP Group and the Perak State Development Corp. The Group now has close to 100 eco-friendly swiftlet houses and an integrated processing plant to clean the raw edible bird’s nests.
From that point onwards, the SEP Group kept breaking record after record to be the first in many unchartered territories. They were the first and only group to offer the swiftlet ranching interest scheme, which is licensed by the government and approved by the Companies Commission of Malaysia (SSM) and Bank Negara in 2010. This interest scheme, which earned a place in the Malaysia Book of Records 2012, saw a consistently high returns of investment pay-out since 2011 to the delight of investors.
Most notably, the Group is the first and only industry player to have a complete upstream and downstream value chain, and responsible for overseeing the production of edible bird’s nest from farming to production to research and distribution. “This has raised the barriers to entry so high that we have no equivalent competitors in the industry,” says Loke. “To survive and thrive in business today, one has to constantly innovate and be a few steps ahead of the curve. Challenges can come from anywhere and no one is spared from them. To succeed, we must seek out the opportunities that lie beneath these challenges and capitalise on them.”
A particularly difficult crisis came in July 2011 when China, the main consumer of bird’s nests, banned the import of raw and clean edible bird’s nest due to high nitrite levels. This resulted in a swift plunge in raw bird’s nest prices from RM4,500 per kg to below RM1,000. “As China is the main consumer for bird’s nests, this has hit us very hard indeed,” Loke recalls. True to his life’s philosophy of viewing every crisis as an opportunity, he steered the Group to expand their vision far beyond what they were currently doing.
SEP Group launched a few initiatives concurrently as the crisis required a multi-pronged approach. First, they started Research and Development (R&D) collaborations with local universities, research institutes and medical centres on the bird’s nest nutrition, beauty and medicinal values. “Although the benefits of bird’s nest have been extolled for centuries, not much scientific research has been done on it. We are the first and only industry player in Malaysia who embarked on this R&D effort as our new markets wanted scientific evidence of the benefits of bird’s nest, and not text gleaned from the Chinese ancient books. We now have scientific proof that bird’s nest is a rich source of amino acids and mineral salts,” says Loke. Analysis was also done on the Group’s bird’s nest nitrite levels and they were certified as being compliant to China’s requirement whereby the nitrite content for ready-to-eat bird’s nest is capped at 30mg per kilogram (30ppm).
The extensive R&D efforts also led the Group to discover an optimal way to extract the essence of bird’s nests, which led to the development of other bird’s nest-related products, such as the functional food, health supplement, cosmetic, skin and beauty care, marketed under the Royal Bird’s Nest brand. “These value-added products not only fetch a better margin compared to raw bird’s nests, but also opens up new territorial markets for us,” says Loke, adding that most people in the untapped Middle East and Western markets think that it’s crazy to consume bird’s saliva and those who are adventurous enough to try it out wouldn’t know how to best prepare it.
To effectively market the Royal Bird’s Nest products, the Group has set up a network marketing company in 2013 which received splendid response from the Malay market, a non-traditional market of edible bird’s nest. “Many people are sceptical about selling bird’s nest to this market segment but our value-added products have successfully paved the way and currently 60% of our customer base are Malays,” says Loke. Having proven the popularity of their products in the local market, the Group has recently achieved another milestone by signing of distribution agreements worth US$200 million to sell its products to Hong Kong, China, India and the Gulf Cooperation Council (GCC) countries in which its members are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. The next target market will be Europe and America. “We want to elevate our Edible Bird’s Nest (EBN) value-added products to the global arena where there is an abundance of untapped opportunities.”
Exciting times are ahead as the Group has set its sights on being listed on US stock exchange within the next one to two years, the first edible bird’s nest enterprise to be listed. Plans are also underway to establish an Indonesian, Thailand and Vietnam offices, as well as an aesthetic wellness franchise network using bird’s nest products in Malaysia, China, Taiwan and Hong Kong. In the next 5 to 10 years, the company envisions stepping up on its R&D efforts to transform the Edible Bird’s Nest from its traditional use as a food or supplement to be a powerhouse in medicinal drugs, especially in the area of diabetes, cancer, anti-aging, and a host of inflammatory and neurological diseases. “We also see a huge potential, a Blue Ocean, so to speak, in expanding the market to the non-traditional markets such as India, the Middle East, Europe, America and especially the World Halal Market through EBN’s value-added products,” says Loke.
To Loke, who loves being on the move and has travelled to more than 50 countries, momentum is a key driver to his success, “Innovation is a non-stop process. As the market leader in this industry, we have to constantly pioneer new initiatives and break new grounds to overcome any crisis that comes along. The only way is forward.”
Issue 24/2016
