03/06/2015 (The Star) - In spite of prevailing crude palm oil (CPO) prices trading at the lower end of their range, TSH Resources Bhd is aiming to maintain growth at double digits.

The plantation firm’s chairman, Datuk Kelvin Tan, said that while the outlook is challenging, TSH would strive to deliver bottom line growth for shareholders.

“Where the bottom line is concerned, we are bracing ourselves for a tough year ahead. However, we will focus on enhancing our cost structure to remain competitive and profitable,” he said at a press conference after its AGM yesterday.

“We also want to improve our yields moving forward and aim to, hopefully, reduce cost by a couple of percent,” Tan added.

While he did not give further specifics on how he planned to enhance its cost structure, he said that it was possible by increasing efficiencies.

“It’s just like losing weight. One cannot trim one’s waistline overnight, but rather it is more of a long-term plan for us. We will ask ourselves, where would we want to be in, say, five years’ time,” he said on the sidelines of the press conference.

Notably, TSH has seen its unit cost of production decreasing by 4%-6% in Malaysia and Indonesia in its financial year 2014 from the previous year.

Last year, the company’s CPO production cost for Sabah was at RM890 per tonne, while in Indonesia it was at RM1,220 per tonne.

“In Indonesia, it is higher because our tree profile there is younger. With this kind of cost structure, we believe we are one of the more competitive players in the market today,” he said.

Its fresh fruit bunch (FFB) yield in Sabah was at 29.7 tonnes per hectare while in Indonesia, it was at 23.2 tonnes per hectare in 2014 against the average FFB yield in Malaysia, which was at 18.6 tonnes per hectare.

Overall, 76% of its plantations are immature or in the young-matured category.

“Our trees are progressing into the higher yield age and I am happy to say that we do not face labour shortage, as we do not operate our plantations in Peninsular Malaysia,” he said.

The company also believes that it is positioned for sustainable future growth, given its 70,000ha of unplanted land bank and its commitment to plant 4,000ha to 5,000ha of oil palm trees annually.