I&P awaits approval to set up palm oil refineryThursday, June 21, 2001(The Star)- ISLAND and Peninsular Bhd (I&P) isseriously pursuing efforts to set up a palm oil refinery in Bintulu,Sarawak, and is currently waiting for approval from the state government.I&P managing director Dr Radzuan Abdul Rahman said the group would belooking at an investment of RM50mil, which he considered "a normalfigure."Radzuan told reporters this after the AGMs of I&P and its listedplantation arm Austral Enterprises Bhd in Kuala Lumpur yesterday.He said depending on how soon approval was obtained, it would take 18 to24 months to complete the refinery.Radzuan hopes the refinery could began operation by 2004 with a productioncapacity of 1,000 tonnes per day.According to Radzuan, the rationale for the proposed refinery is theincreasing volume of fresh fruit bunches (FFB) harvested by the group inSarawak.I&P, through Austral, has 36,542 ha of plantation landbank in Sarawak."As one of the pioneers and a major plantation player in Sarawak, we wouldsoon be harvesting a big crop from existing matured areas," Radzuan said.He said at present, there was only one buyer in Sarawak, which meant thatthe group was just "a price taker.""We are turning the tables to become a refiner instead of a price taker,"he said.Radzuan said that the group had enough FFB volume and other sources ofcrop nearby to justify the refinery.For the financial year ended Jan 31, 2001, Austral recorded FFB productionof 580,469 tonnes and palm oil production of 102,984 tonnes.Radzuan said that I&P would soon be opening a RM23mil oil palm mill inDerawan, Bintulu.On the group's 1st quarter performance for the current financial year,Radzuan said that despite the soft property market and depressing palm oilprices, the company managed to pull through "quite nicely.""We have always been in the black and never seen red in the past whileother property or plantation companies might be hovering between the blackand the red," he said.The group, he said, was still optimistic about achieving RM1bil turnoverby 2005."The growth target is still within reach, supported by consolidation ofour existing business and additional income from new enterprises," hesaid.According to Radzuan, the core property and plantation businesses wouldremain as the group's major contributors while trading is poised to be thekey third business entity.For the financial year ended Jan 31, 2001, I&P's pre-tax profit was halvedto RM65mil on the back of RM362mil turnover. This was achieved on the backof sales of 829 units, mostly at its flagship development project BandarKinrara and FFB production of 580,469 tonnes at an average selling priceof RM961 per tonne.