15/11/2007 (The Star Online), Kota Kinabalu - Following its merger with Wilmar International Ltd, PPB Oil Palms Bhd will focus mainly on improving production and yield, said managing director Khoo Eng Min.

The improvements would be achieved through the adoption of “elite planting material”, Khoo told StarBiz on Monday after handing over some 4,000ha of developed plantation land to the Sabah government for some 400 families in Beluran district.

Controller, secretariat and plantation intelligence, Ng Ah Lek said PPB Oil aimed to increase its crude palm oil (CPO) production by between 8% and 10% per year for the next five years.

PPB Oil, whose 80,000ha plantation landbank are located mainly in Sabah and Sarawak, annual production of CPO currently stands at 400,000 tonnes. 

Elite planting material, which could cost up to 10 times more than the plantation's existing palm trees, could produce 35 to 40 tonnes of fresh fruit bunches per ha a year compared with the average of 30 tonnes currently. 

PPB Oil was currently achieving about 5.5 tonnes of palm oil per ha per year versus the national average of 3.8 tonnes. Khoo said the company was aiming for a yield of 6.5 to 7 tonnes per ha. 

Replanting work had been ongoing for more than 10 years, with about 5,000ha of PPB Oil's land bank already planted with the elite trees.

However, with the current high CPO prices, the replanting issue had become more complex, Ng said.

He said people tended to defer replanting slightly as previously unprofitable low yielding trees now had good profit margins.

“This (replanting schedule) depends on risk appetite,” he said.

As for expansion of PPB Oil's landbank, Khoo said it was not the company's main focus presently but added that PPB Oil was always on the lookout for “any opportunity for expansion”. 

Priority would be given to land acquisition rather than mergers and acquisitions, he said in response to a question.

On whether PPB Oil was in talks to further expand its landbank in Sabah, Khoo said: “No, as land in Sabah is getting very scarce, it is not easy to find land.”

PPB Oil was de-listed from Bursa Malaysia on May 31 after its merger with Singapore Stock Exchange-listed Wilmar.

Wilmar announced yesterday that net profit more than doubled to S$214.8mil for the third quarter ended Sept 30 compared with S$77.4mil in the same quarter last year. Third quarter revenue also rose to S$5bil versus S$1.76bil a year ago. – By LOONG TSE MIN