05/06/2008 (The Star Online), Kuantan - Far East Holdings Bhd plans to double its plantation land bank to 40,000ha from 20,000ha currently to take advantage of strong crude palm oil (CPO) prices.

Chairman Datuk Kamaruddin Mohammed said the company was looking beyond Pahang and was eyeing three locations - two in the country and another outside Malaysia - but declined to elaborate.

The company’s land bank is in Pahang, with the major plantations in Rompin, Temerloh and Bera.

“We are confident that the company’s outlook remains good as a result of strong demand for edible oil from palm oil as well as the growing usage of palm oil in biodiesel energy sector.

“Palm oil is much cheaper to produce compared with other types of vegetable oil such as canola and as such, the prospects look bright,” he said after the company AGM here yesterday.

Kamaruddin expects CPO price to maintain at RM3,500 per tonne until end of the year, “unless something happens.”

On the possibility of over-supply in the next five years if the company were to have the planned 40,000ha of plantation land, Kamaruddin said it would be highly unlikely due to the rising needs for palm oil in various applications.

He also said the company’s market capitalisation, which hit RM1bil when the stock market opened for trading yesterday morning, reflected the investors' confidence in Far East Holdings.

“It is the first public-listed company in Pahang to have touched the billion ringgit mark in terms of market capitalisation,” he added.

Kamaruddin also said the company would pay a total dividend of 30 sen for financial year 2007, its highest to date.

He attributed the impressive financial achievement to high yields, strong CPO price and the efficiency of staff members.

On future plans, Kamaruddin said the company was contemplating venturing into palm oil downstream activities such as producing glycerine.