April 9 2004 - GOLDEN Hope Plantations Bhd plans to further exploit itsoleochemicals business to strengthen the company’s foothold in the palmoil industry.

Group chief executive Sabri Ahmad said the oleochemicals business onlycontributed about 10 per cent to the company’s pre-tax profit last year.

There is huge demand for the sector coming from China and India, he toldreporters during a luncheon with fund managers in Kuala Lumpur yesterday.

Golden Hope posted a net profit of RM180 million on a RM1.53 billionrevenue for the first half of its financial year ended December 31 2003compared with a RM118.8 million net profit and RM1.25 billion revenue inthe previous corresponding period.

He said the company will continue to strive for excellence in bothupstream and downstream activities while looking further at the bigopportunities in oleochemicals.

Sabri said the group will also pursue new markets such as South Africa,Ukraine, Russia and West Asia.

In certain countries, we cannot compete with our own customers such asUnilever, but we can complement them. When we go for alliances, we don’tgo for the greenfields but with those who haved the brand and marketingdistribution, he added.

Golden Hope had acquired a refinery Unimills NV in Rotterdam from food andconsumer products giant Unilever to make its presence felt in Europe andglobally.

Sabri said that Golden Hope stands to gain from the rationalisationexercise with sister company Island and Peninsular Bhd (I&P) through theacquisition of the latter’s plantation arm. The purchase of a 99.63 percent equity interest in Austral Enterprise Bhd for RM1.25 billion willenable Golden Hope to become the second largest oil palm industry in thecountry.It is a win-win deal for Golden Hope and I&P as the acquisition will makeGolden Hope the second largest plantation company after Felda (FederalLand Development Authority).

Upon completion of the scheme, Golden Hope’s plantation size will increasefrom 129,093ha to more than 200,000ha. Felda has a landbank of more than800,000ha. Its planted oil palm area will grow from 91,162ha to 129,474ha.

The recently-signed deal will also see I&P buy the entire stake in GoldenHope Properties (Johor) Sdn Bhd for RM50.3 million and a 99 per cent stakein Golden Hope Properties Sdn Bhd for RM583.9 million.

It will also acquire 60 per cent equity interest in Golden HopeDevelopment Sdn Bhd for RM684.7 million and a 66 per cent stake in NegaraProperties (M) Bhd for RM310 million.

The rationalisation exercise is in line with the Government’s call inMarch last year to merge state-controlled companies in the samebusinesses, usually held through Permodalan Nasional Bhd (PNB), Ministerof Finance Inc and its wholly-owned subsidiary Khazanah Nasional Bhd, intolarger and leaner entities to attract foreign investors.

After the rationalisation exercise, PNB will control 58.2 per cent ofGolden Hope and 60 per cent of I&P. The purchase of Austral, whichentitles Golden Hope to an additional 55,523ha of plantation, will resultin greater efficiency for Golden Hope.