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Glenealy Will Spend RM69Mil To Plant More Oil Palm in Sarawak, Kalimantan
calendar03-11-2011 | linkThe Star | Share This Post:

03/11/2011 (The Star) -  Glenealy Plantations (Malaya) Bhd expects growth in hectarage and output of fresh fruit bunches (FFB) with continued new planting activities in its plantations.

Managing director Yaw Chee Ming said the group had allocated RM69mil in capital expenditure to carry on with its new planting activities in both Sarawak and Kalimantan, Indonesia.

“Our target is to plant 3,000 to 5,000ha a year; it all depends on negotiations with the natives staying on the land.

“We may be allocating a piece of land but there are still some natives staying on it. We will plant more if the negotiations are speeded up,” he said.

There are plans to set up a new palm oil mill in the next two years as part of efforts to increase processing capacity when the Jelalong estate starts to mature.

The proposed mill will have a capacity to process 45 to 60 tonnes of FFB daily.

Currently, the group has three palm oil mills and landbank with a gross area of 21,123ha for the development of oil palm in Jelalong plantations, Sarawak, and 11,000 ha of plantable area in Kalimantan Timur, Indonesia.

For its financial year ending June 30, 2012 (FY12), a total of 485ha of oil palm plantations will bring the group's total mature hectarage in Sabah and Sarawak to 21,166ha, and with its mature areas moving on to higher yielding profiles, the group's production of crude palm oil is also expected to increase.

Meanwhile, the group's FFB production recorded a growth of 6.3% to 336,579 tonnes in FY11, compared with the preceding year.

“There is always something on the plate. We are still looking for opportunities to acquire more land.

“We still have some land that has been acquired in the past two years,” he said.

Moving forward, crude palm oil (CPO) price is expected to come under pressure in the face of higher global production of palm oil and other oilseeds as well as the uncertainties in the world economy.

Yaw said: “I don't have an outlook. Historically, prices have gone down even further, and (planters) should be happy with what they have currently.

“Although we like to have it above RM3,000, it still is a commodity, and prices will fluctuate depending on economic consumption and other external factors.”

On Indonesia's move to lower its palm oil tax structure, he said the lower taxes on refined palm oil exports could have repercussions on the Malaysian palm oil industry.

“With the change in the tax structure in Indonesia, it will be tougher for Malaysian producers to compete against its Indonesian counterparts,” he said.

For FY11, Glenealy's net profit leaped to RM118.9mil from RM51mil in FY10 due to the surge in commodity prices and higher CPO price which resulted in an increase of 36% in group revenue to RM258.7mil from RM189.5mil previously.