Swiftlet Farming in Malaysia

Article in the Star Paper dated December 13, 2008 for your interest

The sky’s the limit for swiftlet farming?
By Errol Oh

THERE are indications that swiftlet farming has the potential to be as huge in this country as it is in Indonesia, where listed companies are among the industry participants.

Malaysia enjoys certain advantages such as the fact that the swiftlets are found only in some parts of South-East Asia. There is also swiftlet farming in Thailand, Vietnam, Cambodia, the Philippines and Myanmar, but our local conditions may tip the balance in our favour.

Also, the frequent forest fires in Indonesia in recent years have driven away many birds and many have ended up in Malaysia.

Says swiftlet farm owner Dr Christopher Lim: “Indonesia is the pioneer in swiftlet farming. It has done quite well in the past but lately it has found that the nest production and quality are not as good as in Malaysia. So much so that the Indonesians sometimes buy nests from Malaysia.”

Nobody seems to be concerned about the possibility that once swiftlet farming takes off in a big way, supply may one day overtake demand.

Says Kelvin Heng of Pearlnest, a swiftlet farming consultancy outfit: “There’s a limited supply all the time. The swiftlets nest only three times a year. People are getting more health-conscious. The wellness industry is growing fast. The demand for bird nests won’t go down.”

Before this, the Malaysian operators are almost exclusively minor-league entrepreneurs and property owners.

Today, bigger players are coming into the picture as well. For one thing, swiftlet farming is one of the East Coast Economic Region’s promoted activities.

On Nov 25, Agriculture and Agro-based Industry Minister Datuk Mustapa Mohamed said his ministry would propose to the Cabinet that the development of the industry be given more attention.

A prominent Tan Sri who controls a group of listed companies is believed to have personally invested RM2mil to build a swiftlet farm in Pekan, and may be looking to have more in other locations.

At least one Malaysian-listed company has ventured into the game, and that is Seal Inc Bhd.

Its wholly-owned subsidiary, Seal Ventures Sdn Bhd, is the developer of Krai Eco Park, a project comprising about 60 three-storey buildings in Kuala Krai, Kelantan.

Seal Inc’s 2008 annual report refers to the project as an industrial park development, but a Krai Eco Park brochure unmistakably positions the units as swiftlet houses.

Supporting the industry

Another telling sign that swiftlet farming is gaining momentum here is that a sub-industry has emerged in Malaysia to provide swiftlet farmers with a broad range of products and services.

The former include audio, monitoring and security systems; chemicals; and fittings for the birdhouses.

Lim is not the only one to have produced a book on swiftlet farming, although he recalls facing a lot of resistance within the industry when he began writing in 2006.

In fact, there are several such publications in English, Chinese and Malay. Sharing of information, it seems, is no longer a no-no.

On the services side, there are dozens of consultants who offer to design, build and manage swiftlet farms.

There are also those who organise seminars and courses. There are dozens of websites and blogs relating to the industry.

The worry is that some of the service providers may not have the necessary expertise and experience, and are instead looking to capitalise on the surge in swiftlet farming.

According to industry insiders, the standard consulting fee for turning shoplots into birdhouses is RM10,000.

“That’s a much faster way to make money than by investing in the farms, which will take a few years before you start seeing good returns,” says a farmer.

Swiftlet Ventures International, which has not begun operating its first birdhouse in Rawang, says first-hand knowledge is not always crucial. The consultancy’s edge, says manager Mohammad Azimullah, is its ties with an Indonesian firm with a 30-year track record and with other Malaysian players.

The argument is that it is just as important to be able to draw on this network’s pool of know-how.

Another new trend to watch is the development of the so-called eco parks, which feature rows of purpose-built swiftlet farms at single locations away from residential and commercial areas.

This way, there will be compliance with the authorities’ requirements and there will be no neighbours to complain about the birdhouses.

However, some industry players think that it will take a long time to populate so many birdhouses in one spot.