THURS, 31 January, 2002 (Business Times) - IOI CORPORATION Bhd, alreadyone of the most cost-efficient plantation companies, plans torevolutionalise the oil palm industry by raising its palm oil yields by atleast 50 per cent.

Its executive chairman, Tan Sri Lee Shin Cheng, said the group was workinghard to achieve this goal through good husbandry management and proper useof fertilisers.

"We should expect to see some results in the first half of 2004," he toldreporters after the group's extraordinary general meeting in Putrajayayesterday.

"If the project is successful, we can expect to see production of seventonnes per annum for a hectare as compared to the current four tonnes —the industry's average.

"The purpose in introducing this plan is to make sure that Malaysiaremains the main palm oil producer in the world without having to increasethe acreage.

"Besides, I am a firm believer of the old economy in which palm oil is oneof them. Palm oil was also the second biggest contributor to our country'sforeign exchange in the last economic slowdown in 1998." Lee also said theprojection for CPO prices was that it might go up to RM1,300 per tonne inApril or May this year.

He said the cost for the plan was negligible as the company was using thesame size of land.

"We are basically a young plantation company and our land bank is acquiredeither through acquisition or through jungle plantation. Our productionfor CPO increases by about 15 per cent every year and this year it wouldbe about 600,000 tonnes," he said.

The group owns 48 estates and operates 10 crude palm oil mills. As at June30, 2001, a total titled area of 103,813ha was directly owned by the groupand its subsidiaries. Another 9,547ha are owned by associated companiesand managed by the group.

Lee also said the group's debt was nothing to be worried about as itsprofit could cover its interest rate up to seven and eight times when theeconomy was not good.