Tradewinds on track for solid results

KUALA LUMPUR: Tradewinds Plantation Bhd is on track to achieve solid results this year, thanks to buoyant palm oil prices trading above RM3,000 per tonne.

Although palm oil prices have started to slide in the last three months, the third-month benchmark palm oil futures contract on the Malaysia Derivatives Exchange have, so far, averaged around RM3,300 per tonne this year. Yesterday, the contract closed RM62 higher to RM3,144 per tonne.

"We did well in our first quarter as the palm oil prices were averaging around RM3,500 per tonne. We should be able to perform well for the year because prices are still holding up. We're also harvesting more fruits," said chief executive officer Chan Seng Fatt.

The group is expected to harvest 10 per cent more fruits this year because 70 per cent of its 102,000ha land planted with oil palms are of prime ages. "About 72,000ha of our planted area has reached maturity. We should be able to harvest 1.3 million tonnes of fresh fruit bunches this year," he said.

Chan was speaking to reporters after the company's shareholders' meeting here yesterday. Also present was chairman Datuk Wira Syed Abdul Jabbar Syed Hassan. Tradewinds' shareholders unanimously approved the company's takeover proposal of Mardec Bhd .

Syed Abdul Jabbar said the Mardec acquisition is strategic to the group's plans to expand into the processing and marketing of rubber products. Mardec is the country's third biggest rubber processor after Lee Rubber and the Felda group.

On October 2009, Tradewinds Plantation's wholly-owned unit, Prisma Spektra Sdn Bhd, offered to buy out Semi Bayu Sdn Bhd's shares in Mardec. The sale price was revised to RM140 million from the initial RM150 million after Ernst & Young conducted due diligence on Mardec. When asked why the deal is taking so long to conclude, Syed Abdul Jabbar said: "We still have a few things to sort out with the authorities, like the Economic Planning Unit."

In the upstream, he said Tradewinds has planted 6,120ha with rubber trees in Kedah. The trees are due to be tapped next year.

On the whole, Tradewinds has grown to be a sizeable planter as its agricultural landbank stands at 141,465ha. "We still have 18,000ha of plantable reserves which can last us to 2014," he said.

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