Life Green Charcoal Sdn. Bhd.
The company: Life Green Charcoal (LGC) was established in 2014 in Bachok Kelantan and is the largest coconut plantation in the east coast of peninsular Malaysia. The company spent the first two years experimenting on the processes as well as on the structure for getting coconut shells and coconut shell charcoals from the villages in Bachok. Business is fully operational since January 2019. LGC customers are both from local (25 per cent) and foreign markets (especially Thailand, China, Jordan and Serbia). The company needs to scale-up production to meet the large demand from abroad.
Charcoal Vendors, most of them are also farmers, supply the coconut shells charcoal to LGC. LGC is perhaps the only company in Malaysia which sources directly from low income households or villagers in rural Malaysia. Currently, the company produces only charcoal in natural form which does not need sophisticated processes. The current business model is a mainstream business. However, the company has plans to produce more value-added products that yield higher profit margin and better pay for the B40 suppliers (such as bio briquettes, super compost biochar and activated carbon) and as well as charcoal-based consumer products (such as deodorant and odour neutralizers). To make this transition, further grow, and pay better to more B40 the company wants to transform into an inclusive business.
The company currently works with 59 registered charcoal vendors, of which half are from Kelantan, a third from Terengganu and 20 per cent from Pahang, Negeri Sembilan, Kedah, Perak and Johor. Each vendor works currently with about four farmers (collectors). Therefore, the total reach of the company was 150 people in 2019. The company is aiming to scale this up to 300 suppliers by 2023 and 500 by 2025. Vendors earn well through the business and could increase their family income from about MYR 1200 to MYR 2000 a month. However, the company does not have yet a strategy to also increase the coconut farmers to whom the vendors typically pay the market rate. The company provides training to the vendors on how to pre-process the coconut shells to charcoal before sending them to the company. To encourage villagers to start out as vendors, LGC subsidizes half of the vendors’ investment costs (such as for the coconut shells carbonization retort - drum), as well as half of the vendors’ transportation costs of bringing the coconut shell charcoals from the farmers to LGC.