Friday, 11 July 2008

Firm to repeat success in Indonesia

Note: You may recall a recent report from Malaysia where the government has said no more forests should be cut down in that country to make way for new palm oil plantations.
I then predicted they would instead take Indonesian rainforests. Read on.

Monday July 14, 2008

Firm to repeat success in Indonesia

UNITED Plantations Bhd is undergoing a major expansion into oil palm plantations in Indonesia after 100 years of solid presence in Malaysia. Executive director of finance and marketing Martin Bek-Nielsen said the group hoped to be equally successful in Indonesia as it was well versed in the palm oil sector.

“Naturally it (the Indonesian venture) is associated with risks but we remain cautiously optimistic and committed,” he added.

United Plantations is one of Malaysia's best-managed plantation groups with 45% stake held by the Bek-Nielsen brothers. It owns and operates about 40,000ha of mature oil palm and coconut plantations in Perak.
As of March, Martin said the group had planted some 5,300ha in Indonesia with oil palms that has the same high standards of planting that are carried out in Malaysia.

He said the group was in the midst of constructing a state-of-the art palm oil mill in Indonesia slated for commissioning by September or October 2009.

On the local front, United Plantations expects 2008 to be an equally challenging year in view of the dramatic escalation in prices of fertilisers, wages and other things, coupled with the windfall tax on all palm oil producers.

While the palm oil industry is enjoying record high commodity prices, both the Bek-Nielsen brothers remained united in their view that all efforts should be taken to rid complacency for the industry to remain competitive, should commodity prices head south.

For financial year ending Dec 31, 2007, the group posted an all-time high net profit of RM179.4mil on the back of RM674mil in revenue – thanks to the sharp rise in CPO and palm kernel prices during the year under review.