ASIA NEWS NETWORK
WE KNOW ASIA BETTER
Malaysian plantation form Kulim to expand land bank in Indonesia
Publication Date : 25-06-2014
Kulim (M) Bhd says its re-entry into Indonesia last October is expected to expand its oil palm land-bank by some 40,000ha in central Kalimantan and also accelerate its new planting programme.
Kulim chairman Kamaruzzaman Abu Kassim said that the target planting for 2014 was 500ha. The first 500ha of land clearing for a new planting programme, along with the setting up of an 80ha oil palm nursery, will commence in the third quarter of this year.
Following that, the new planting programme will facilitate between 5,000 and 7,000ha per year.
“The group’s move to secure additional land-bank via its 74 per cent stake in PT Wisesa Inspirasi Nusantara is key to growth for its plantation segment,” he said after Kulim’s AGM and EGM yesterday.
“As we expand our oil palm land-bank, we remain resolutely focused on managing our cost of production to maximise margins and profitability, while at the same time abiding by the principles of sustainability,” Kamaruzzaman said.
He explained that owing to limited land in Malaysia, Kulim needed to diversify its geographical presence into other locations. Currently, Papua New Guinea and the Solomon Islands remain the key driver for the group, contributing 90 per cent to revenue in 2013.
Kulim’s direct land-bank in Malaysia exceeds 50,000ha.
Meanwhile, managing director Ahamad Mohamad said that Kulim was also looking at initiatives to improve the group’s financial and operational performance that would enable it to grow on a well-diversified basis.
He said Kulim would be entering a new dimension in its ventures, as the group, together with Indonesian business partner PT Graha Sumber Berkah, would explore strategies to take advantage of the Indonesian government’s decision to liberalise the oil and gas (O&G) sector by offering blocks to foreign investors.
Kulim is already involved in the support sector of the O&G industry in Malaysia via E A Technique (M) Bhd (EATech) and Danamin (M) Sdn Bhd.
EATech is Kulim’s subsidiary held via Sindora Bhd. It is involved in the transportation of clean petroleum products and upstream exploration support for oil majors. As at May 2014, EATech had a fleet of 32 marine vessels, including nine vessels chartered from third parties.
EATech has a total carrying capacity of more than 84,000 deadweight tonnes.
Danamin, a 60 per cent subsidiary acquired in July 2013, meanwhile, provides engineering and inspection services for the local O&G industry.
Ahamad said Kulim was upbeat on the proposed listing of EATech on the Main Market of Bursa Malaysia later this year, as the marine vessel operator had an outstanding order-book of 1 billion ringgit (US$310,300) and was buying more vessels to grow its business