CBIP Q1 profits jump 80%

SUBANG JAYA: CB Industrial Product Holding Bhd's (CBIP) first quarter profit ended March 2011 jumped 80 per cent to RM21.88 million, thanks to surging palm oil prices and the completion of more palm oil mills. Revenue was up by 27 per cent to RM92.32 million.

CBIP is in the business of constructing automated palm oil mills brandnamed Modipalms. The company has also planted some 17,000ha with oil palms in Malaysia and Indonesia.

The Modipalm technology is a system of continuous sterilisation of fresh fruit bunches. It essentially automates oil extraction and reduces dependency on foreign labour.

On the company's outlook, managing director Lim Chai Beng remarked: "The prospect looks good."

He said palm oil prices are not likely to drop below RM3,000 per tonne in the next few months as bad weather in China and the US has caused a constraint in global supply of soyabean oil, a substitute to palm oil.

CBIP's engineering division contributes about 40 per cent of the total earnings. Lim said this division is expected to improve this year, although it has been affected by the foreign exchange movements. About half of its contracts are quoted in US dollars.

"We're gaining visibility in Africa and Central America. Lately, we've received more enquiries from oil palm plantations in Liberia, Ivory Coast, Guatemala and Mexico," he told reporters after the company's shareholders meeting here yesterday.

CBIP's order books currently amount to RM400 million, enough to keep its staff busy for the next 18 months. "Now, we are negotiating for contracts beyond 2012. With the current high palm oil prices, we see promising growth in our engineering business in the year ahead.

"We've put bids amounting to another RM400 million. In Malaysia, many old mills are due for upgrades. Our Modipalm design is proven to be very efficient at oil recovery and this has helped contribute to higher oil extraction rates for millers," he said.

Last month, CBIP told the stock exchange that its unit AVP Engineering (M) Sdn Bhd had clinched a RM38.35 million contract to supply 100 units of ambulance to the Ministry of Health. Lim explained that AVP Engineering has been in the business of retro-fitting ambulances and fire engines in the last five years. "We've supplied ambulances to the government before. Our track record in the assembly of special purpose vehicles gives confidence for repeat orders," he said.

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