29/11/04 KUALA LUMPUR - Consolidated Plantations Bhd (Consplant), theunlisted plantation arm of Sime Darby Bhd, is positioning to be aprominent global oil palm player through acquisition of land bank anddownstream activities, both locally and abroad.Managing director Datuk Syed Tamin Syed Mohamed said Consplant hoped toachieve this goal within the next two years by doubling the size of itsoil palm plantations as well as acquiring some oleochemicals and oils andfats downstream businesses.To be a prominent player, it is vital for us to be a cost-efficient playerwith high productivity level, significant land bank and an all-roundedinvolvement in the palm oil value chain, he told StarBiz in Subang Jaya.

Syed Tamin said Consplant was proactively taking steps such as improvingprocesses at mills and estates, increasing the use of technology andscouting for suitable and strategic land.The company currently has about 81,000ha (inclusive of that in Kalimantan,Indonesia) as well as nine oil mills nationwide.Syed Tamin explains that oil palm plantations, cultivation and processingwill remain as the company’s core activities.We plan to increase both vertical and horizontal integration in our palmoil-related activities such as increasing land bank and downstreamactivities, resulting in oils and fats becoming our next core business inthe near future, he added.He said Consplant hoped to expand its business beyond Malaysian bordersand tap into underdeveloped markets, particularly in the Asian region.We aim to have a better understanding of the market needs by being closerto the end-users, Syed Tamin said.He said Consplant would continue to be on the look out for new land banks,especially in Malaysia, Thailand and Indonesia (such as in Kalimantan andSumatra).Syed Tamin said Consplant was willing to even look within the 5- and10-degree belt around the world to source for suitable investments eitherin land, technical expertise or refineries to further expand its globalbusiness activities to countries like Nigeria, Bolivia, Peru and Brazil.He pointed out that Consplant’s current plantation hectarage had wellpositioned the group as a middle-sized oil palm plantation company interms of land bank, compared with listed plantation giants like KumpulanGuthrie Bhd.Having larger hectarage will help boost our CPO (crude palm oil)production, resulting in improved profitability. Thus increasing land bankcontinues to remain one of our top priorities going forward. We will notbuy any land for the sake of increasing hectarage. Our stringent standardsmust be adhered Syed Tamin added.Despite its small land bank, Consplant has attained higher fresh fruitbunches production of 23.5 tonnes per ha this year compared with thenational industry average of 18.3 tonnes per ha while its oil extractionrate rose to 19.9% from last year’s 19.4%.The Malaysian Palm Oil Board in its 2002 survey has also acknowledgedConsplant as one of Malaysia’s top three most cost-efficient palm oilplayers. Consplant’s average cost of production is sterling, which is wellbelow RM600 per tonne currently.On the market perception of Consplant’s pure plantation player status,Syed Tamin said: We are well aware of this and taking a series ofpro-active steps to further reduce our exposure to the CPO pricevolatility.He said the company was increasing its involvement in palm-relateddownstream activities, which was well within the group’s strategic plansover the next few years, as well as seeking strategic locations forrefineries.These steps include increasing our involvement in the palm oil value chainsuch as speciality fats, oleochemicals and other vegetable oils in ourstable of products, Syed Tamin said.As for the group’s CPO forward-selling policy, he said the general policywould be a maximum of 35,000 tonnes at any one time with no restriction onthe forward selling timing.On the CPO price trend, Syed Tamin said: I generally expect CPO priceswill be at between RM1,380 and RM1,500 per tonne level until the firstquarter of next year.Exports are similarly expected to taper off in the coming months due tothe end of the festive seasons and sufficient stock levels held byimporting countries, he said.He added that despite lower production, palm oil stocks was projected toremain above one million tonnes until early 2005 and this was expected tocontinue to burden overall market sentiment.In addition, record soybean production and increase in the ending stocksin the US add a flavour of a slight bearishness in the palm oil market.However, recent report of Asian rust fungus attacking six soybean-plantingstates in the US may increase the bullishness of CPO prices early nextyear.

-- The Star