14/3/07 (The Star) KUALA LUMPUR  -  FIMA Corp Bhd expects its foray into the oil palm plantation business to become profitable by 2010 and contribute about 50%, or RM30mil, to net profit by 2012.

Managing director Roslan Hamir said FIMA was diversifying into plantations because it was a lucrative business.

“We also want to reduce our dependency on our core business of printing and trading in security and confidential documents,” he told reporters after the company EGM yesterday.  

FIMA Corp is 60%-owned by Kumpulan Fima Bhd (K-Fima).

Roslan said the oil palm plantation business was a new venture for FIMA but the company could tap into the expertise of K-Fima as it had been in the business for many years.

 
Roslan Hamir
In March 2006, FIMA acquired 80% of palm oil-based Indonesian company P.T. Nunukan Jaya Lestari for RM96mil, which included a mill that had the capacity to produce up to 45 tons of fresh fruit bunches (FFB) per hour.

Roslan said the plantation was only able to produce 2,000 tonnes of FFB this year but expects its yield to increase to 40,000 FFB next year when most of the existing oil palm trees mature.  

P.T. Nunukan Jaya Lestari has 18,000 hectares of land, comprising of 3,000 ha of mature oil palm trees, 3,500 ha of immature oil palm trees and 8,500 ha that can be planted with oil palm trees. The remaining 3,000 ha is unusable land.

On the contribution of the new business, Roslan said: “By 2010 we expect about RM3mil in net profit contribution from our oil palm business, RM13mil in 2011 and about RM30mil to RM40mil in 2012.”  

Plantation earnings would be negligible in the first few years of operations but in the longer term it would be significant.  

Roslan said the group would initially invest RM35mil to improve the existing plantation's operations, especially the yield on mature trees.

“The balance of 8,500 ha of usable land would be planted with oil palm tress in stages, which would take about four years to complete,” he said.

For the financial year ended March 31, 2006 FIMA posted a net profit of RM31mil on revenue of RM157mil.