Kelvin Tan (left) and Aik Sim looking at TSH's annual report.

14/10/2014 (The Star) - Sabah-based TSH Resources Bhd is undertaking several measures, including increasing its plantation land-bank and improving its yield, to become a high-growth company.

Chairman Datuk Kelvin Tan said the group would also capitalise on being a low-cost producer.

He said the company’s average fresh fruit bunches (FFB) yield for the past three years stood at 30 tonnes per hectare, which was much higher than the national average of 19 tonnes per hectare in 2013.

According to a recent Maybank Kim Eng Research report, it was among the few companies that achieved the best crude palm oil (CPO) yield for 2013.

TSH posted the best CPO yield for 2013 at 5.3 tonnes per hectare, boosted by its high FFB yield of 25.3 tonnes per hectare and an oil extraction rate of 21%.

IOI Corp Bhd was next with 5.1 tonnes per hectare while Kuala Lumpur Kepong Bhd recorded 4.8 tonnes per hectare.

Group managing director Datuk Tan Aik Sim said TSH’s FFB production grew 2.7 times to 540,000 tonnes in 2013 from 199,000 tonne in 2008, equating to an average 34% growth per year.

Meanwhile, the company’s CPO production costs have come down from RM836 per tonne in 2011 to RM770 per tonne in 2013. The average cost of production among local planters is about RM1,200 to RM1,300 per tonne.

Aik Sim said the company was looking to increase its plantation land-bank in Sabah and Indonesia. “We now have a land-bank of 65,000ha of unplanted areas, on top of 50,000ha of planted areas,” he said.

Kelvin Tan also expected that TSH’s “superior Wakuba” ramets would spur strong growth for the company, moving forward.

“I am optimistic that using the Wakuba planting material we can produce between 32 and 35 tonnes per hectare of palm oil yield in the future,” he said.

“With the new material we can achieve more than what we are getting now, but it’ll take another few years,” he added after the company’s EGM yesterday.

Aik Sim said that he expected TSH’s FFB production in Indonesia to grow between 20% and 30% over the next five years, on the back of more trees maturing and starting to bear FFB.

He also expected the acquisition of Icon Field Ventures Sdn Bhd to be completed by mid next year.

The company had on July 14, 2014, announced that it entered into a share sale agreement with Winsgate Consolidation Ltd to buy Icon Field for US$7.65mil (RM24.48mil).

The deal is conditional on Icon Field’s acquisition of 90% of PT Prima Usaha Sukses (PT PUS), which owns 9,000ha of plantation land in Kalimantan, close to TSH’s existing estate.

“I think it will take a few more months to complete the acquisition. We would complete it around the middle of next year,” Aik Sim said.

Yesterday, shareholders approved the company’s proposed one-for-two bonus issue of 451.9 million new shares.