IMPROVING YIELDS: The disposal of the Sumatran plantation will help improve the yield of the company’s plantations in Malaysia.

19/03/2012 (Borneo Post) - Boustead Holdings Bhd’s plan to dispose its plantation in Sumatra will see the company 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 down 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 told Bernama in an interview.

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

“We have made announcement to Bursa Malaysia in January this year on our intention to sell the plantation. With the disposal, we’ll be focusing on our plantation activities in Peninsular Malaysia, Sabah and Sarawak,” Lodin added.

According to him, Boustead would have about 84,000 hectares of oil palm plantations in Malaysia, equally spread in Peninsular Malaysia, Sabah and Sarawak after the disposal of its plantation in Sumatra.

To unlock the value of its oil palm plantations, it will replant old trees by using materials supplied by the company’s research and development unit.

This method will enable the company to get better yield and quality crops as well as consistency.

Lodin said Boustead will be also implementing high density planting, where more trees will be planted in the existing areas to increase yield.

“We have about 130 trees per hectare. Now, we want to increase that to about 150 trees or so. We are using better agronomic practices and fertilizers.”

Boustead is also in the midst of improving its harvesting system by replacing manual workers with motorised knives.

Lodin noted that most of Boustead’s activities were quite in line with those of the government-owned areas and that it was aiming to be ahead of others in terms of productivity.

With such efforts in place, Lodin sees a 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 present 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.

The plantation division contributed about 40 per cent to the company’s profit for its financial year ended Dec 31 2011.

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