IJM Plantations -- Profits and rugby

LEE Wei Ming, one of IJM Plantations Bhd's (IJMP) senior assistant estate managers, made a sharp strike at the neck of an oil palm tree and a 15kg fresh fruit bunch fell onto the ground with a thud.

A crowd of 11 city slickers cheered and clapped loudly. Their enthusiasm over the novelty of fruit harvesting confirmed IJMP managing director and chief executive officer Joseph Tek's view of the need for regular stakeholders' visits to oil palm estates to better understand the business.

"The communication of the facts, figures and reality of oil palm planting is seriously lacking. I still have friends in the UK who assume we're tapping oil from the palm tree, like the tapping of latex from a rubber tree," he said.

As the entourage of stock analysts, fund managers and journalists walked towards the company's sports complex within the estate, Tek attested that Lee was once Malaysia's rugby captain.

Lee is known among his teammates as the X-Men comic character "Wolverine" because of the metal plates in his body.

In 2005, Lee broke metacarpal bones in both his hands. He had to undergo numerous surgery to have titanium alloy plates fused into his bones so that he could move his fingers again.

A year later, Lee injured his neck in a tournament. His C5 and C6 vertebrae were fractured, leading to screws and plates inserted into his spine.

Unlike the comic superhero Wolverine who possess miraculous healing powers, Lee is all human. Early 2010, he decided to retire from competitive rugby to take on more responsibilities at IJMP's estate. It is no coincidence that this Sabahan, who is trained as an accountant, is charting his career at IJMP.

Unlike other oil palm firms which encourage their staff to play football and golf in their spare time, IJMP is truly passionate about rugby. In 2002, IJMP initiated the Academy of Rugby Excellence in Sandakan with the Sabah Education Department to introduce and encourage school children to play rugby. "To date, about 2,000 children from 52 schools are participating in the rugby programme," said Tek.

Fiji High Commissioner Suliasi Lutubula, who was visiting IJM's estates, said, "I'm very happy that IJMP is giving an opportunity to young Fijians to be gainfully employed here, in furthering rugby sports."

IJMP spends RM200,000 per year, of which RM150,000 goes to running the rugby school in Sandakan and the remaining RM50,000 to organise tournaments.

Two months ago, IJMP told the stock exchange that it had sold its 51 per cent stake sale of a joint venture with India's Godrej Agrovet Ltd for RM9.8 million. Back in February 2008, the joint venture was set up to buy and mill fresh fruit bunches from oil palm farmers in Goa and Karnataka.

IJMP had also dissolved a planned biodiesel joint venture with CTI Biofuels LLC.

When asked to comment, Tek said, after much deliberation, IJMP had to pull out of India to consolidate its resources and focus on upstream activities in Malaysia and Indonesia. "We have much to do upstream. We need to replant certain blocks in Sandakan, carry out new plantings in Sumatera and put up a 30-tonne mill in East Kalimantan."

As at October 2010, IJMP had drawn down RM225 million of the RM335.51 million, raised from a rights issue, for the development of its oil palm estates. "There's still RM110.51 million left and we estimate to use it up by the second half of 2011," Tek said, adding that the company will plant up 10,000ha, mainly in Indonesia.

Since the Indonesian government wants oil palm planters to source at least half of their germinated seeds locally, IJMP reserves the bulk of its own seedlings for replanting at its Sandakan estates.

IJMP's profits for the second quarter ended September 2010 jumped 2.7 times to RM47.34 million on more sales of palm oil at higher prices than a year ago. Asked on the current year's prospects ending March 2011, Tek replied, "It should be good. Shareholders are happy that palm oil prices, in the last two months, have been trading above RM3,000 per tonne."

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