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Halcyon Agri Sees Digital Platform as the Future for Natural Rubber

Interview - November 8, 2018

Robert Meyer, the CEO of Singapore-based integrated global rubber producer Halcyon Agri, is ready to embrace disruption from technology but cautions it should be a slow and careful process



With Singapore chairing the ASEAN Summit this year, how do you visualize the potential of the region and how can Singapore affect its development?

ASEAN as a block is often underestimated because people don't see it as being really as homogenous as, for example, NAFTA or the European Union. What that sort of masks though is this speed of transformation that's happening within the member states. Having operations throughout most of ASEAN and traveling to these countries frequently, I see the speed of development. The transition from an export-based economy in many countries of the region has already gone past the tipping point to where there are balanced producers and consumers. This transition is happening faster in ASEAN than people are recognizing and what that is doing is reinforcing Singapore’s status as a gateway, an interesting point which is happening now.

It’s quite timely that Singapore is hosting the summit because Singapore is now reinforcing its role in providing the platform, the knowledge, and maybe even the access for Silicon Valley or areas of China to get digital technologies into, for instance, Indonesia and Thailand. This applies to the rubber business where within five years rubber farmers will have a digital application allowing them to reference daily production to an international market price, access to some form of cash flow, and allow them to sell their daily production to my company or another company, which will then take that production into the global value chain. Singapore is the nexus. Singapore has the technology. Singapore has the academia. Singapore has the funding. Singapore has the government. You put all that together, that's the platform that is going to enable this transition.


What are the tangible steps that you see from the Singapore government and private sector in realizing that vision of being a value creator in the region rather than just a regional headquarters for the commercial operations of multinationals?

I look, for example, at the track record of what the government has done so far for the biotech sector and I'm astounded at how relevant we are in global biotech. This is not a Singapore original business and yet over the past decade we have become among the top producers in the world. There's a company incorporated in Singapore which is on the cusp of finding a cure for arthritis which is the world's second largest pharmaceutical cluster after cancer. It is bigger than cardio in terms of pharmaceutical revenue. How did this happen? It's having a plan, and they have lots of intelligent people having a plan, forming a cluster, putting money into it and allowing market forces to participate. If they could do it in biotech, which I think is an alien business to Singapore, then they can do it in, for instance, agtech, agrotech or fintech, which are businesses that are actually much closer to home in terms of Singapore’s natural business ecosystem, I think it's going to happen even quicker. If you're asking me have I seen tangible evidence, well then I've only seen it in that sector so far, but I feel that's a good indication to believe it can happen in other sectors as well.


As Singapore is the global headquarters for your company, how do you see digitalization and other tech innovations affecting your operations here in the future?

If you look at our offices here, you see 102 employees and I would say at least 50% are not going to be doing what they will do in Singapore five years from now. Their jobs are going to be pushed onto the digital platform. These are the logistics, financing, administration and trade support operations. But I still think we're going to have around the same number of people here. The difference is that half of them are going to be doing things that we don't yet do thanks to technology. Instead of being a traditional supply chain manager where we buy and sell things along the value chain, we’re going to change to being a gateway. We are going to be much more platform focused and move our talent onto a digital platform. It could be block chain, it could be lots of other things, and we’ll manage that flow from here. If that happens, then we're going to be employing talent with higher capacity and relevant experience and retraining existing employees. The average pay is likely to be significantly higher five years from now than it is today.


What possible negative effects do you see from disruption in your business?   

Disruption for the sake of disruption is a dangerous game. In our business, we have six million small farmers who depend on getting money every day for what they tap from their rubber trees. They may not be getting enough money every day, so they may stop doing it or find something else, but they need to get money every day. As we disrupt the system we have to make sure that what we put in place allows them to be in the same position or better. We cannot afford to put their cash flow at risk because maybe the payment system that we implement can't pay daily due to, for example internet outages in a part of southern Sumatra, or whatever the reasons may be. And the farmer doesn't get his money one day because of something which is beyond his control. Then that would be a net negative. We have to make sure that the disruption does not disrupt just for the sake of disruption. This means we have to be very mindful about the speed, about where you disrupt, and this is maybe my biggest caution, that it seems to me that we’re falling over our feet to disrupt at the moment. We may need to slow down a little bit and see and think about consequences like the Singapore approach. They say, well, we're going to have six clusters and 23 strategies. It's well thought through and I really think that Singapore has created a niche for itself, not just because it's geographically at the heart of ASEAN, but because it has a perfect blend of strategic objectives and tactical implementation in disrupting industries.