10/06/2011 (Borneo Post) - Sarawak-based palm oil company, BLD Plantation Bhd (BLD Plantation) will invest an estimated RM100 million towards the construction of a new crude palm oil (CPO) mill and a second refinery plant to cater for robust demand.

The group’s second refinery plant to be located at Tanjung Kidurong, Bintulu, Sarawak’s Northern Region is expected to double its current processing capacity of 1,200 tonnes per day to 2,400 tonnes per day upon completion of the plant by the end of 2012 or early 2013.

BLD Plantation executive chairman Dato’ Henry Lau revealed at the company’s Annual General Meeting (AGM) yesterday that, “In addition, a second CPO mill located in Igan, Sibu, the Central Region of Sarawak, is under construction which, upon commission, will have a capacity to process 60 metric tonnes of fresh fruit bunches (FFB) per hour. This mill is scheduled to come on stream in October or November.

“We think that the expansion plans are in tandem with the vibrant growth prospects for CPO in Sarawak with particular emphasis in the Central Region. The current refinery plant is already operating over capacity limits, thus the upcoming plant will stand us in good stead and contribute strongly to our returns in the subsequent years upon completion and commissioning,” he added.

Apart from the expansion plans on the card , it was highlighted that the group had over 50,000 hectares (ha) of land in the Igan area, where the new CPO mill would be situated.

“We have only utilised about 6,000 ha of land for plantation purposes which translates to an estimated 30 per cent of the total available area,” said Lau.

BLD Plantation currently has a total planted area of about 24,580 ha of land with about 86 per cent reaching the mature stage. The company produced  an estimated 332,700 metric tonnes of FFB last year, a 26 per cent increase over the previous year.

“We expect output to grow at a sustainable pace as more palms reach maturity,” BLD Plantation financial controller Seng Cheak Chai told The Borneo Post.

He further pointed out that the group’s palm oil mill was operating at about 99.33 per cent of its capacity during the financial year under review compared with about 87 per cent last year. About 475,000 metric tonnes of palm oil products from the group’s refinery and kernel crushing plant were sold in 2010 which were mainly destined for overseas markets.

On the financial front,  the group posted a pre-tax profit of RM77.07 million on the back of a robust revenue of RM1.315 billion for the financial year ended December 31, 2010, (FY2010) compared with a pre-tax profit of RM39.58 million on a turnover of RM823 million reported during the previous corresponding year.

The increase was primarily due to the increase in prices and quantities sold during the year which translated into a  hefty revenue increase of 59 per cent.

Moving forward, BLD Plantation declared a single tier dividend of 13 sen per share for FY2011 and would be paying out the dividend on June 31, 2011.

Looking at industry development, Malaysian palm oil sector recorded mixed performance in year 2010. Lower CPO production and higher exports pushed palm oil stocks down to 1.62 million tonnes. Tight vegetable oil supplies and higher crude oil prices pushed the price from a comfortable level of RM2,500 per tonne in the first half of the year to more than RM3,000 per tonne towards the end of the year.

“With the 2011 general outlook that we have at the moment, I believe the CPO price and demand will remain stable and consistent throughout the year. Meanwhile, for 2012 the outlook remains to be seen,” said Seng.

According to Malaysian Palm Oil Board, the total palm oil planted area in the country had increased by 3.4 per cent to 4.85 million ha in year 2010 with the largest expansion located in Sarawak, an increase of 79,670 ha or 9.5 per cent with a total planted area of 0.9 million hectares.

While the CPO production dropped by 3.3 per cent to 16.99 million tonnes from 17.56 million tonnes in the year 2009, Sarawak’s CPO production increased by 9.3 per cent to 2.2 million tonnes.

During BLD Plantation’s AGM, its Board of Directors Dato’ Henry Lau, Wan Abdillah Hamid, Chong Chon Chee, Datuk Hamden Ahmad and Robert Lau Hui Yew were re-elected as directors of the company.