MARKET DEVELOPMENT
BLD Unit Doubles Capacity Kirana Invests RM60mil in New Plant To Cope with Increasing Demand
BLD Unit Doubles Capacity Kirana Invests RM60mil in New Plant To Cope with Increasing Demand
28/06/2013 (The Star) - The Star BLD Plantation Bhd subsidiary Kirana Palm Oil Refinery Sdn Bhd has doubled its production capacity to 2,400 tonnes a day with the commissioning of a second plant in Bintulu.
Kirana had invested about RM60mil in the new plant to cope with increasing demand, as the first plant had been operating at full capacity for the past two years, said BLD executive chairman Datuk Henry Lau Lee Kong.
“The new plant commenced operations in the first quarter of this year. The refinery is currently operating at about 70% of the combined installed capacity,” he told reporters after BLD’s AGM here.
BLD sold about 685,200 tonnes of palm oil products from its refinery and kernel crushing plant last year, mainly to China and India.
There are currently five palm oil refineries in Sarawak, four of which are in Bintulu and the fifth in the state capital.
The group also owns and operates two palm oil mills in central Sarawak, where most of its oil palm estates are located. The mills also process fresh fruit bunches from other plantations and smallholders.
Lau said that due to the weak palm oil prices and uncertainty in the industry, BLD had not embarked on new planting activities this year.
The group has a total planted area of about 26,400ha, of which some 95% of the oil palm trees are in maturity stage. It has a further 21,000ha of plantation land that is yet to be developed.
BLD is reviewing its earlier plan to fully develop its plantation land in five to seven years.
Lau said that apart from palm oil prices, other factors like financial resources and labour were being taken into consideration in the group’s new planting programme.
Earlier this week, BLD raised gross proceeds of RM66.3mil from a private placement of 8.5 million new shares, or 10% of the company’s capital. The shares were placed out at RM7.80 apiece.
Lau said RM8mil from the proceeds would be used to pare down the group’s bank borrowings, which stood at RM430mil as of Dec 31, 2012.
“The balance of the net proceeds would be utilised for oil palm capital expenditure and working capital,” he said.
Kirana had invested about RM60mil in the new plant to cope with increasing demand, as the first plant had been operating at full capacity for the past two years, said BLD executive chairman Datuk Henry Lau Lee Kong.
“The new plant commenced operations in the first quarter of this year. The refinery is currently operating at about 70% of the combined installed capacity,” he told reporters after BLD’s AGM here.
BLD sold about 685,200 tonnes of palm oil products from its refinery and kernel crushing plant last year, mainly to China and India.
There are currently five palm oil refineries in Sarawak, four of which are in Bintulu and the fifth in the state capital.
The group also owns and operates two palm oil mills in central Sarawak, where most of its oil palm estates are located. The mills also process fresh fruit bunches from other plantations and smallholders.
Lau said that due to the weak palm oil prices and uncertainty in the industry, BLD had not embarked on new planting activities this year.
The group has a total planted area of about 26,400ha, of which some 95% of the oil palm trees are in maturity stage. It has a further 21,000ha of plantation land that is yet to be developed.
BLD is reviewing its earlier plan to fully develop its plantation land in five to seven years.
Lau said that apart from palm oil prices, other factors like financial resources and labour were being taken into consideration in the group’s new planting programme.
Earlier this week, BLD raised gross proceeds of RM66.3mil from a private placement of 8.5 million new shares, or 10% of the company’s capital. The shares were placed out at RM7.80 apiece.
Lau said RM8mil from the proceeds would be used to pare down the group’s bank borrowings, which stood at RM430mil as of Dec 31, 2012.
“The balance of the net proceeds would be utilised for oil palm capital expenditure and working capital,” he said.