Boustead to sell Indo estates, focus on Msia

KUALA LUMPUR: Boustead Holdings Bhd's plan to dispose of its Sumatra plantation will see it focusing on increasing the yield of its plantations in Malaysia, said its deputy chairman and group managing director Tan Sri Lodin Wok Kamaruddin.

Lodin said the disposal of the Sumatra plantation would help improve the yield of the company's plantations in Malaysia. "The Sumatra plantation has been dragging our plantation yield a bit as it is not really as productive as our plantation in Malaysia.

"We're very happy with the progress of our plantation activities in Malaysia, but we believe we can do more to unlock its value," he said in an interview.

Lodin said Boustead expects to finalise the sale of its oil palm plantation in Sumatra at RM120 million by the end of the month or April.

"We have made announcement to Bursa Malaysia, two months ago, of our intention to sell the plantation. With the disposal, we'll be focusing on our plantation activities in Peninsular Malaysia, Sabah and Sarawak," he added.

After the disposal of its plantation in Sumatra, Boustead would have about 84,000ha of oil palm plantations in Malaysia, equally spread across Peninsular Malaysia, Sabah and Sarawak.

To unlock the value of its oil palm plantations, the Group will replant old trees with higher yielding planting materials supplied by its associate Applied Agricultural Resources Sdn Bhd (AAR).

Lodin explained the dwarf stature of the new planting materials allows for the Group to plant more trees in existing areas. "Previously, we have been planting 136 trees per hectare. Now, when we replant, we'll increase that to 148 trees."

This high density planting method and usage of semi-clonal materials will enable the company to get better oil yields -- consistently.

"This improved planting materials provided by our associate AAR will raise future oil yields per hectare by at least 10 per cent. We continue to engage AAR's expertise in best agronomic practices and fertiliser optimisation," he said.

Boustead is also in the midst of improving its harvesting system by providing its workers with motorised sickles.

The group managing director noted that most of Boustead's activities are in line with those of the government-owned areas and it was aiming to be ahead of others in terms of productivity.

With such efforts in place, he sees strong performance from the company's plantation division for the current financial year.

"We expect a similar or better profit contribution from the plantation division if the price of crude palm oil (CPO) remains at the current level of around RM3,200 per tonne. The disposal of the Sumatra plantation will not have any impact on the profits of the plantation division," he said. Last year, the plantation division contributed about 40 per cent to the company's profit.

Lodin expects the price of CPO to hover in the range of RM3,300 per tonne this year. --Bernama

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