CHAPTER 27 Expansion

1. Having now been given permission to expand further, we managed to acquire a large block of land from Kwong Borneo, a Sandakan trading firm. This was Kimansi Estate, a property of 10,000 acres in extent, on the other side of the Tungud River. Kwong Borneo had already cleared about 400 acres with the idea of planting oil palms themselves. We were thus able to start planting operations immediately. The rapid expansion put new demands on our management. We were able to recruit, via Pamol Kluang, our first three Malaysian cadet managers, Eugene Menon, Bharpur Singh and Douglas Lee. They proved to be swift learners, and they were all promoted to full management positions before completing their two years' cadetship.
2. The following year we were very fortunate to recruit our first Sabahan Managers, Anthony Wong and David Wan. These two were amongst the first Sabahan graduates to return from a New Zealand university with degrees in agriculture. Before making them an offer of employment, I cleared this with Tun Mustapha. He was agreeable to their transfer. He told me that the two we had select­ed were the cream of the first bunch of graduates. He said that the State Government would be keeping a close eye on their progress. A short period on the estate, was enough for us to confirm Tun's high opinion of them. Anthony, who was undoubt­edly one of the most intelligent managers I ever worked with, was sent off, with his wife Josie, to one of our plantations in West Africa, to gain experience with mature oil palms, and subsequently to a training course in Holland on drainage techniques. David was sent on detachment to Pamol Kluang.
3. We managed to hang on to both our Sabahan graduates for a few years and they were great assets to the company. Inevitably however, Tun Mustapha called them back and appointed them to senior positions in government agricultural projects. We were sorry to lose them, but well-educated Sabahans with experience of oil palm development were thin on the ground at that time and the training they had received with us was put to good use by the State Government.
4. When they went, their loss was partly compensated for by the recruitment over the next year or two, of four further Sabahan managers. One was Chris Hoh, our first research officer, whom we recruited from the government agricultural department to set up our research department. Another was Alex Huang, an experienced planter, who had worked on the Cadbury's cocoa estate at Rumidi before it was closed down. The other two, Simon Fong and Ho Sui Ting were both engineers who had obtained their engineering qualifications overseas. In the course of time, Simon and Ho each in turn, became the chief engineer of the palm oil mill. Simon died tragically shortly after he had been promoted to be the generalmanager of the Sabah business, and he was eventually succeeded by Ho in the top job.
5. Kimansi Estate was a much better acquisition than Tungud had been. Apart from the 400 acres already cleared, it was still covered with secondary jungle from which all the marketable timber had been removed by Kwong Borneo prior to selling it to us. We were able to use some of their logging-roads to get immediate access.
6. We divided the new estate into two divisions of about 5,000 acres, with a divisional manager in charge of each. Tindakon Division, in the southern half, was flat but easily drained, with none of the deep swamps which had caused us so many problems in the early days on Tungud. The other half, Rungus Division, was quite undulating. Although Kimansi was a much easier property to develop than Tungud, we were to discover that our pioneering tribulations were not yet completely over. At the end of the 1965 monsoon, by which time we had planted over 1,200 acres on Kimansi, a huge herd of bearded-pigs (Sus barbatus) migrated down from the jungles to the north. They descended on the estate in numbers such as none of us had ever seen before. They settled in the jungle on the borders of Tindakon, and proceeded to wreak havoc. The pigs swiftly acquired a taste for oil palms, especially for the sweet central spears. They poured into the planted areas at dusk and every morning we found hundreds of palms destroyed. Every local hunter in the district was out shooting them night after night.
7. I suggested that the divisional managers should pay the locals a bounty of $10 for every pig shot. There was a brief temporary hitch when I found that David Marsh on Tindakon was asking the hunters to produce one pig's head for every $10 paid out, whilst Bharpur on Rungus was insisting that they produced a tail. It did not take our wily Kadazan friends long to discover this golden opportunity for doubling the size of the bounty! In addition to our bounty, they had a brisk trade with the Chinese shopkeepers who exported the pork daily to Sandakan, most of the pigs minus a head and a tail.
8. During a period of three months, well over three hundred pigs were killed by the hunters. The size of the herds was such that it seemed to make little impact on their numbers. I had seen plenty pig-damage on new plantings in Johore, where, as a young planter, boar-hunting was my favourite sport. However I had never seen damage on this scale. Ibrahim, as usual, our source of all local knowledge, told me that every decade or two the bearded pigs gathered in huge herds and made their way from the interior down through the Labuk Valley, to the Sulu Sea. He thought that this instinct to migrate to the sea might perhaps have something to do with their need for salt, just as in the case of the migrating otters I had seen years earlier.
9. The herds having found a delicious new source of food in the shape of our young palms, had no inclination to proceed further downstream however. The wire collars which kept out the rats and the porcupines were of course no use against wild boars. Eventually we had to erect a pig-proof fence at vast expense around the entire jungle boundary. This had a length of 12 miles, and it had to be patrolled nightly by hunters to check for break-ins. After the erection of the fence, the pigs migrated on down to the Labuk delta, as Ibrahim had predicted.
10. The last I saw of them was a few weeks later when, en route to Sandakan, I bumped into a small herd of pigs swimming across Labuk bay, at least a mile from the nearest shore. Before seeing this, I had no idea that bearded pigs could swim. A final census showed that we had lost 25,575 palms in Tindakon and a further 7,460 palms in Ulu. This was the equivalent of just over 600 acres of palms.
11. Once we had overcome the wild pig problem, and replaced the dead palms, we continued to make swift progress with the planting operations. When we first acquired Kimansi, our access to it was by means of a ferry across the Tungud River. As development proceeded, the ferry proved inadequate to handle all the traffic. Plantations Group agreed with us that the properties must be linked by a bridge. We enlisted the help of a civil engineering company, Steen Sehested. Their local repre­sentative was a Sabahan, Nasir Yeo, a young Chinese civil engineer, who had got his qualifications and early training in UK. In the course of time he left Steen Sehested and went into business on his own. He was awarded a Datukship and he became one of the top businessmen in Sabah. We became personal friends, and have kept in touch over the years.
12. Datuk Nasir Yeo designed the bridge for us. It was about 300 feet long in all, and it had to be built well above the level of the highest known floods. We put the bridge construction out to tender in Singapore, Kuala Lumpur and Hong Kong. As usual when it was found that it had to be built in the interior, in an area inaccessi­ble by road, the tenders we received were absurdly high. The cheapest was over $2 million. We decided that we would build the bridge ourselves with Nasir Yeo acting as our on-site consultant. The Unilever engineer, John MacDonald, who arrived to take charge of the construction of the new mill, was given, as his first job, the task of constructing the bridge. Nasir Yeo's design had called for the piles to be driven to a depth of thirty feet below the bed of the river. We hired a Chinese pile-driving expert from Hong Kong for this part of the operation. John Macdonald then completed the steelwork and the concrete decking, using Kong Miew and his local building workers.
13. When finished, the bridge had cost us just under $300,000. Over the next few decades, Nasir Yeo's design was frequently put to the test when the Tungud was in flood, and it withstood every one. I am sure that a hundred years from now it will still be there, a monument to one of Sabah's first civil engineers.
14. Tan Sri Richard Lind was the Resident in Sandakan over this period. He followed with interest our progress with the bridge. He arranged for a big Government delegation including the Chief Minister, Tan Sri Peter Lo and two other State Ministers to come up for the official opening. The ceremony took place on 5th September 1966. In his speech opening the bridge, Peter predicted that before many years passed, it would become a vital link in Sabah's roads-network, connecting the lower Labuk to Sandakan and Kota Kinabalu. He hoped that the pioneering work being done by Unilever in the Labuk Valley, would encourage other investors into the oil palm industry, and, based on the optimistic report from the UN Team, he foresaw the Labuk region becoming one of the main centres of oil palm development in the state.
15. He also suggested that with the increasing amount of activity in the Labuk Valley, it would be very helpful not only to our company but also to the expanding community and to the state government, if we were to build an airstrip on the estate. He told us that the government was planning to introduce a regular internal air service connecting a few places in the interior to Kota Kinabalu and Sandakan and he promised that if our strip was up to the standard required, he would have Pamol put on to a regular twice-weekly scheduled service. This was too good an offer to miss. Joe Joyce and his road-team completed the new runway in a couple of months.
16. The opening of the airstrip was another important step forward for the project.
    One of the first planes to land (or perhaps I should say, nearly land!) on the new airfield, was a single-engined Cessna, belonging to a company called Sabah Air. It was being chartered by Brian Bodie, the manager of Borneo Company, from whom we purchased the bulk of our fertilisers. The plane flew low over our house and then circled the estate a few times. I jumped into my car and drove to the airstrip to greet them. They landed just as I arrived. Unfortunately the pilot touched down about fifty yards short of the runway in a patch of swamp.
17. I could not have had a better view of the accident. The plane bounced once then stuck in the mud, rolled upside-down, and slid gracefully along backwards to end up right at my feet. The occupants were unharmed but they were swinging upside down from their safety straps like three canaries. It was an unusual sight. The plane was a write-off. After the owners had stripped out the engine and other salvageable parts, we flattened it, and bulldozed the carcase into the swamp which had been its downfall. No doubt it remains there to this day waiting to become a source of speculation to future archaeologists.
18. Peter Lo was as good as his word and a year or two later Pamol became one of the scheduled stops for the internal service of Borneo Airlines. Until the intro­duction of the scheduled service however we arranged with Sabah Air, in spite of their unfortunate introduction to our strip, to provide us with a regular weekly charter flight to-and- from Sandakan using their single engined four seater Cessna. The air-service proved its usefulness shortly afterwards when one of our Timorese workers by the name of Johanes died in Sandakan Hospital. The entire Timorese community asked for a few days off work to go down by boat to Sandakan to attend his funeral. It was a particularly busy period on the estate, and I suggested to them that instead of all the Timorese losing three or four days work, we should fly Johanes in, and bury him on the estate. This they readily agreed to.
19. I contacted Sabah Air. They told me that unfortunately the pod which was usually fixed to the underside of the plane, for carrying large objects, was being repaired and their Chinese pilot was refusing to fly with a dead body actually inside his plane. We were Sabah Air's best customer on the east coast at the time, and I had to threaten to cancel our contract before they eventually agreed, with great reluctance.
20. Our Sandakan driver brought the coffin from the hospital mortuary to the airport. It was found that the coffin could not fit inside the small plane. Using great initiative, he took Johanes out of the coffin, wrapped him in a sort of winding-sheet, like a mummy. They then carried him into the plane, sat him in the passenger-seat behind the pilot, and fastened his safety strap.
21. When the pilot landed at Pamol he was looking rather white about the gills. He was not a very happy man. He said that all the way to the estate, alone in the plane, he kept thinking he heard rustling noises coming from Johanes behind him. When he banked the plane to start the landing, Johanes fell forward against his shoulder and he had to push him back with one hand whilst manipulating the landing controls with the other. Some pilots are really very superstitious!
22. From 1965 to 1967 in addition to bringing to completion our development programme, we were also very preoccupied with the erection of our factory. At that time, the only company which could build a standard turn-key palm oil mill on con­tract, was Messrs Stork of Amsterdam. CDC in Tawau had already commissioned them to build their factory and it had been opened, the first palm oil mill in East Malaysia the previous year. The H&C development at Giram followed the same procedure. The Stork erection team arrived on their estate, built a standard palm oil mill, to a tried and tested design, and departed, once it was commissioned. I was keen that we should follow their example and get Stork to install one of their off-the-peg plants on Tungud. I felt that our management team had enough to worry about without getting involved in all the problems of erecting a factory ourselves.
23. It was not to be however. It was decided in London that we would build our own factory to a Plantations Group design. This was, I grumbled, typical of UPI. Not only did they choose a flood-liable, leech-infested tidal swamp in the most inaccessible area they could find, for our first project in Sabah, now they wanted to complicate matters further by asking us to build an expensive one-off factory!
24. David Martin, explained their thinking to us with his usual tact and for­bearance. Unilever's engineers had, he said, been involved throughout the 1950s in experimental work at a mill at Mongana, in what was then Belgian Congo. This had resulted in several innovative improvements in the extraction process and in the design of palm oil machinery. It was felt, correctly in the light of subsequent political events in Congo, that much of this work, which had been written-up in what came to be known as the Mongana Report, might be lost after Congo got independence.
25. The Board had decided therefore that as many as possible of the findings from Mongana would be incorporated into the Tungud factory. In several ways it would be a departure from past designs and it was necessary therefore that we should build it ourselves. Unilever hoped that the Tungud Mill with its many processing improvements could become the first of the next generation of palm oil factories throughout the industry, and that it might result in some improvement in the quality of the palm oil exported. John MacDonald, the man they selected to do the work at our end had operating experience in Unilever palm oil factories in Nigeria and Cameroons. He was an extremely competent engineer as he had already demonstrated to us by erecting the Tungud bridge.
26. In view of the remote situation of the estate he was faced with a formidable task. The lead times were of course horrendous. The steel-work for the buildings came from Japan, the boilers from UK, the turbines from Germany, the presses from France, and the centrifuges from Westphalia in Sweden. From the date of designing and ordering these items, to the time they were assembled in Europe, shipped to the East, unloaded in Sandakan, put on a skow to be taken up the river, and finally transported by tractor from the riverside to the factory site, could be as much as three years. We made great use of network analyses at both ends of the operation to ensure that each major item of plant was on site at the time it was needed but not too long beforehand.
27. It was a complex and time-consuming business. As MacDonald's right hand man we were able to recruit the services of a young Chinese mechanical engineer Lau Chung Fung who had worked for Shell in Miri. After the construction was completed Lau took over as our Chief Engineer. He and his wife Elsie were popu­lar figures in the community. The company was very fortunate in the calibre of the local engineers we were able to recruit within Malaysia. When Lau moved back to West Malaysia, he was replaced by Peter Yee, a brilliant engineer who was to become in due course the first Technical Director of the local company. Peter was sent to Europe to study automation techniques in some of the'most modern Unilever factories and on his return was able to introduce a degree of automation to our process systems both at Kluang and Pamol Sabah.
28. As it happened I was being unfair to our Engineering Department in London when I complained about the cost of the factory. It was finally completed within the original estimated budget. It was indeed more expensive than an off-the-peg standard factory. The reason for this however was the number of innovations they built in. Also, with their long experience of building and running mills in remote parts of Africa, they were mindful of the necessity of building-in sufficient stand­by units right at the outset. This avoided the long waits for spare parts to be sent out from Europe when a breakdown occurred.
29. Many years later, Ho Sui Teng, who was by then the GM of Tungud, reported the achievement of an astonishing record. The factory had milled a million tons of bunches over twenty years, without a single day being lost to breakdowns. I doubt if many palm oil factories in the world could make that claim.
30. The factory was finally opened on target, on 15 November 1967. The event was widely reported in the Malaysian press. Tun Mustapha had hoped to perform the opening ceremony. However he was overseas at the time and he deputised a member of the Cabinet, Datuk Pang Tet Tshung to act for him. The ceremony was attended by Lord and Lady Cole, Sir Michael Walker, the British High Commissioner from Kuala Lumpur, and many of our friends and colleagues from the Sabah plantation industry and from the state government.
31. With the opening of the factory and the planting up of 10,000 acres of palms, we had now completed the original project. Lord Cole was delighted that, in spite of the many vicissitudes encountered, we had done it within the original capital grant. Whilst congratulating us on our achievement he reminded us that, now that we had completed the first phase of the development, within the budget, the next thing we had to do was to show that we could produce a return on the shareholders' investment.
32. This proved however, to be a much harder task than any of us anticipated.