Driven to modernise and mechanise Malaysia’s agriculture sector

“My childhood was full of oil and mud,” recalls Jack Khor, Executive Director of Eurostar Tractors Sdn Bhd. “I used to climb from tractor to tractor, so I’d joke with my friends that I had lots of toys that were too big to hug. It made me love tractors so much that I still say I have type ‘T’ blood: no one else in the world has it, because there are millions of tractors in my veins!”

It certainly is no exaggeration to say that he and his father, Group Chairman Dato’ Khor Chen Heng, know their machines inside and out. As one of the leading companies in Malaysia’s heavy machinery industry (its headquarters are located in Melaka, while they also have an impressive 11 branches scattered across Malaysia and Indonesia), Eurostar Tractors has been helping to bring about change in farms and plantations across the country, aiding planters and farmers in their efforts to modernise and mechanise agricultural methods.

While it may not have the slickness and rapidity of newer industries like fintech and start-ups, agriculture is just as relevant as it was some 11,500 years ago when humans began planting wild grains. “People tend to think of agriculture as an obsolete, old-fashioned industry,” says Jack, “But just think: if all the farmers disappear, who’s going to do the planting?” Dato’ Khor puts his view across even more succinctly: “Agriculture is a necessity – everyone needs food.

HEAVY METAL

With over 40 years’ experience in the heavy machinery industry, Dato’ Khor is no stranger to the painstaking work involved in manual farming, having grown up on a rubber plantation in Kedah, where his father worked as a rubber tapper. One of 14 children, he began learning about machinery after finishing his studies at secondary school, as one of his brothers was already working for a company that sold paddy field walking tractors (an appropriate business in the rice bowl of Malaysia). A few years later, as a young newlywed, he spotted new opportunities in the emerging paddy field market in Teluk Intan, and moved to Perak with his wife to start a fledgling business trading small used machinery. “It was a really hard time for me,” Dato’ Khor says. “I didn’t even have enough money to install a proper signboard on the wall.” After seven years of hard work, his ‘golden chance’ arose when he learnt that an oil palm estate in Jementah, Johor, belonging to Golden Hopes Plantations, was looking for machines capable of assisting with the field evacuation of fresh fruit bunches.

“I drove all the way from Perak to Johor to meet with the manager and began a joint study of their infield evacuation system, and supplied them with small machinery. At the time, the system was based on manual methods of removing fruit bunches on workers’ backs or wheelbarrows, which allowed me to understand the importance of mechanisation, where one machine could do the work of seven or eight labourers. I remember the estate manager showing me a big map of Segamat and telling me that the ground I was standing on had the biggest plantation acreage in Malaysia.

“I’m convinced it changed my destiny, because that was how I started to diversify from the paddy field sector into plantations.” With characteristic foresight, Dato’ Khor’s new direction opened the door to the oil palm market, which – according to the most recent figures from Malaysia’s Department of Statistics – contributed a whopping 46.6 per cent of the national agricultural sector’s GDP in 2017, which in its entirety is worth MYR96 billion. In the late 1980s, he moved to Johor and set up Segamat Agricultural Machinery Sdn Bhd, where he continued dealing in reconditioned machinery, acquainting himself with the various problems encountered by the oil palm and farming sectors.

“I wanted to initiate a market revolution, where the plantation and farming lines were no longer restricted to expensive choices, and I could provide what Malaysian planters and farmers actually needed, rather than simply saying – as most competitors usually would – ‘take what I have’,” Dato’ Khor explains. “Mechanisation in agriculture is able to reduce a lot of headaches: the current scenario is that companies might be willing to spend on hired labour, but there are either labour shortages or workers eventually run away because these are intensive jobs that require a lot of energy. With efficient machinery, workers are more likely to settle down because it enables them to bring in a high income without exhausting them.”

In 2006, he made the decision to rebrand the company as Eurostar Tractors, reflecting its recent transformation from a supplier of reconditioned equipment to a full-service supplier focusing on new machinery. Well aware that most European and Japanese brands of heavy machinery would not be willing to customise their products according to local requirements, he’d turned to machines that were made and assembled in China – a risky move at the time – which presented them with quite a few challenges. Dato’ Khor, however, had set his mind to it: “When I first set up the brand, I told myself I wanted to be ahead of my competitors, to be creative, innovative and a leader in the industry – or I wouldn’t do it at all.”

FULL STEAM AHEAD

From Jack’s perspective – as his father’s young second-in-command at the time – it was a make-or-break moment for the business. “We were one of the biggest reconditioning suppliers at that time for our category of products,” he relates. “When my father decided to go with China-made machinery, I think everyone in the market was saying, ‘This guy must be insane or stupid’. As his son, I had to back him up. Over the years that he’d raised me, I realised that he believed in the decisions he made, and they were successful every single time. I grew up in a very traditional Chinese family, where you must be united. If you have extremely different points of view, you can’t grow, so I had to choose to believe and move forward – otherwise we’d never know if we were right or wrong.”

At first, of course, they had to make their customers comfortable with the idea of purchasing Chinese machinery. “All the negative perspectives surrounding that ‘Made in China’ label were thrown into one basket, while an additional challenge was our position as an individual company going up against plenty of public-listed ‘big boys’,” says Dato’ Khor. “What supported us was our strong reputation in the industry, which my son and I have always taken seriously. Reputation is built over time – you can’t buy and trade it.

“It was an all-in game for us. We even sent our customers a letter when we’d just begun to introduce our Chinese products to the market, promising to buy their machines from them at the original selling price – without adjustment for depreciation or at a discounted value – if we weren’t able to provide spare parts or backup services for the next seven years. No one had dared to do that before. Today, if there are any issues with Eurostar Tractors, I’m brave enough to tell my clients that it’s not a problem. I’m able to solve it for them.”

The benefits of working with their Chinese manufacturer, Foton Lovol International Heavy Industry, include competitively priced machines (compared with European or American equipment), quick turnaround times for orders and shipments, a sufficient inventory of spare parts to provide prompt after-sales service, and the ability to tailor-make machinery suitable for Malaysia’s climate, terrain and industries – again, a rarity in the heavy machinery sector. “Palm oil is a huge multi-billion industry, but most of its machinery is converted and modified from those suited to other crops, like apples, olives or pineapples,” Jack describes. “The problem is that simply adapting them means they’re not built for a purpose as specific as palm oil.”

“The machine doesn’t fit the purpose. It tends to experience breakdowns and failures, and ends up becoming junk. It’s important to bring the right products to planters and farmers, because after the first, second and third attempt have failed, they won’t believe in mechanisation anymore. They’ll give up and return to the conventional methods of doing everything by hand. So our R&D department and team of engineers are always striving to create something truly Malaysian that can be used by the oil palm industry, because it’s so unique to this part of the world.” Working with their Chinese manufacturer, as well as engineers from Taiwan, France and Thailand, has meant that Eurostar Tractors offers far more than just its namesake. There are diggers, loaders, fruit bunch transporters, grabbers, excavators and high-lift trailers, all designed for a tropical working environment and the harsh weather that accompanies it. “At the moment, the issue that’s hardest to solve is the harvesting of fresh oil palm fruit bunches – none of the private or government sectors have been able to come up with a solution either,” says Jack. “That’s why we’ve spent a lot of effort on other methods, like transportation, fertilising, weeding and road maintenance. All that, we’re able to cover.”

STAR TREATMENT

At the heart of Eurostar Tractors’ mission is Dato’ Khor and Jack’s wish to see Malaysian agriculture evolve into an industry capable of keeping up – if not competing – with other countries. “We’ve visited everywhere, from Thai coconut farms to Taiwanese biotechnology parks, and both of us agree that Malaysia is still far behind, even though our country started agriculture far earlier than many developing countries.” Jack warns. “Things have been stagnant for years – we sometimes joke that the machines sold in my father’s time, compared with those that I sell now, are the same. We’ve brought in a lot of technology and tried to encourage farmers with free trials and demonstrations, but they still resist.”

This isn’t to say that the father-and-son team aren’t aware of just how difficult it can be to work in agriculture. Far from forgetting that they were still a poor family when they started Eurostar Tractors, it’s made them sympathise with their customers all the more. “My father insists on adhering to our company values,” Jack notes. “He always says that people fail when they move too fast and too greedily. We shouldn’t aim to make overly large profits from farmers and planters. During his time, farmers were very poor, which is why he’s said we should try to help return the profits to them.”

“This is an evergreen business, not a trend- or speculation-centric business that will make you rich overnight. You have to move step by step,” Dato’ Khor adds. What’s also worth mentioning is that the agricultural sector requires young, dynamic individuals like Jack, who serves as an excellent example of efficient legacy-planning. “A lot of the younger generation have no passion for agriculture, which is quite sad,” he muses. “That’s why we must make this industry young again – you have to show them that agriculture is vital and, as long as you’re sincere and you work hard, you’ll have a stable income.”

On Jack’s part, he genuinely enjoys being able to meet his clients so that he can understand what they and the agricultural industry require: “I like to say I have thousands of friends, because all of our customers become my friends through sales and marketing. We try to work together to build something suitable for them, even if it’s just one unit. Sure, I might not make money on it, but if I can solve their problems, I can tackle other peoples’ problems as well. If you never try, you never know.”

It’s this can-do attitude that, among Eurostar Tractors’ other winning qualities, has made them a go-to machinery supplier not just for the agricultural sector, but also those in construction and material-handling. With all of his company’s achievements in mind, what brings Dato’ Khor – who remains so hands-on that he still enthusiastically helps to perform quality checks on even the dirtiest and greasiest machines himself – the most satisfaction? “I think my father takes the most pride in the fact that whenever he’s driving on the road, he’ll see a machine with the Eurostar company name on our products. That’s a joy for him,” Jack interjects.

“That’s number two,” his father corrects him fondly. “I’m proudest of Jack. As my successor, he’s really followed what I taught him. Though it is true – now, it’s not like the old days where people used to say, ‘What is Eurostar?’ When I see our products appearing more and more frequently, my happiness increases. The pride that Jack and I share in our machines is indescribable.”

TEXT RENYI LIM
ART DIRECTION AUDREY LIM
PHOTOGRAPHY GERALD GOH/ WALA WALA PICTURES
PHOTOGRAPHY ASSISTANT ASYRAF RAHMAN