20/12/05 (The Star)  -  KUMPULAN Guthrie Bhd unit, Plantation Indonesia, is expected to show a major improvement in earnings this year, driven mainly by impressive yields, oil extraction rates (OER) and fresh fruit bunches production (FFB).

The Indon unit’s group head, Md Tahir Mohammed, did not disclose any figures, but said the company recorded “significant improvement” for 2005.

Tahir is bullish about the crude palm oil (CPO) prices next year. CPO prices are expected to remain around RM1,400 a tonne, which will help boost the group’s yields and OER.

Rusli Zainal (in grey suit) and Tan Sri Musa Hitam (at Rusli’s right) being briefed on on leaf testing procedures

Plantation Indonesia, or better known as Minamas Plantation, registered RM110.6mil in pre-tax profit for the financial year ended Dec 31, 2004. It was a huge improvement over the RM23.7mil loss incurred in 2001, when the Indonesian operations started. Pre-tax profit in 2003 stood at RM75.3mil.

Revenue for 2004 also rose to RM760.2mil from RM235.2mil in 2001.

“This marks a significant turnaround since the operations started some four years ago. We are confident earnings will grow further,” Tahir told a media briefing after the opening of Minamas Research Centre (MRC) in Teluk Siak yesterday.

Plantation Indonesia comprises PT Minamas Gemilang, PT Anugerah Sumber Makmur and PT Guthrie Pecconina Indonesia.

The Indonesian operations have shown progress in yield per hectare, rising from 8.14 tonnes in 2001 to more than 15 tonnes to date. The group aims to achieve over 20 tonnes per hectare by 2008.

FFB has risen from 2.08 million tonnes to an estimated 2.38 million tonnes this year. The OER is also up at over 24% so far against 22.23% in 2001.

The group’s CPO production is expected to increase to 3.53 tonnes per hectare this year from 1.85 tonnes in 2001. CPO production is projected at 4.88 tonnes per hectare in 2008, while FFB production is seen reaching 3.6 million tonnes in 2010.

Tahir said the unit’s capital expenditure next year was about RM350mil, which included the cost of infrastructure such as roads, schools and bridges in areas surrounding its estates.

“We are also building three new mills in Kalimantan and Sumatra, while two mill extensions are also planned in Sumatra. This will cost us some RM72mil up to 2007,” he said.

Since the group's inception in 2001, its external loans have exceeded RM200mil. It expects to settle them by 2008.

The group, which manages 54 estates spanning over 200,000ha in Indonesia, is planting on 37,000ha of reserve land, which is expected to be completed by 2008.

Earlier, Riau governor Rusli Zainal launched the RM10mil MRC, located some 50km from Pekanbaru.

MRC will conduct research into plant breeding, fertilisers, crop protection and agronomy for Guthrie’s operations and smallholders at other plantations.

Also present at the event were Guthrie chairman Tan Sri Musa Hitam and group chief executive Datuk Abdul Wahab Maskan.

As for the listing of Minamas on the Jakarta Stock Exchange, the group said it would be done at the appropriate time.