Friday, 27 June 2008

Oriental to expand plantation ops

Friday June 27, 2008 The StarOnline, Malaysia

Oriental to expand plantation ops


GEORGE TOWN: Oriental Holdings Bhd has drawn up a plan to expand its oil palm plantation business, which also includes a possible listing of the division.

Group chairman Datuk Loh Cheng Yean said the company aimed to increase the plantation size to 60,000ha from 40,000ha now in two to three years.

“Some RM500mil to RM600mil would need to be invested. We are looking at acquiring more oil palm plantations in Asia,” she said after the company's AGM yesterday.

Apart from Malaysia, Loh said the group had oil palm plantations in Indonesia.

In 2007, the group’s plantations produced a record crop of 512,378 tonnes compared with 399,990 tonnes the year before. The yield in Malaysia, however, fell to 92,956 tonnes versus 104,691 tonnes in 2006.

Loh said the drop was expected because the palms suffered slightly from stress due to the preceding year’s high yield, she said.

“With the anticipated higher crude palm oil price in 2008, our plantation sector should enjoy a price-driven boost to earnings.

“The push for biofuel as an alternative energy source by various governments, coupled with higher soybean prices, will benefit the sector,” she said.

For the first quarter ended March 31, the group posted a pre-tax profit of RM132.7mil on revenue of RM1.27bil. That compares with RM88mil and RM1bil respectively a year earlier.