Monday August 9, 2004 - In the past seven months since he was appointedthe group chief executive of Kumpulan Guthrie Bhd, Datuk Wahab Maskan, hasbeen working behind the scenes to raise the group's profile. In his firstmedia interview since his appointment, Wahab speaks to StarBiz seniorwriter Hasni Mohd Nasir on the way forward for the group.

KUMPULAN Guthrie Bhd is consolidating its position to focus on its twocore businesses - plantation and property development.

Group chief executive Datuk Wahab Maskan said with the new direction, thegroup would be divesting under-performing, non-strategic assets by the endof this year.

We will be clearing most of the chunk by the end of the year, thoseinvestment laggards that have been dragging down the bottomline, he toldStarBiz.

We would be concluding some of the sales in the next few weeks, he said,without giving any details of the assets involved.

He said the divestment would not be limited to the non-core businesses,but also to non-performing plantation estates and property assets.

We are constantly monitoring our investments and all the bad apples willbe thrown away. We want to be a company with no skeletons and no worms, hesaid.

Other than plantations and properties, Guthrie is involved in an array ofmanufacturing businesses that included medium-density fibreboard, rubbergloves and brick making.

The losses recorded in the manufacturing division had widened to RM22.3milin the financial year Dec 31 2003 from a loss of RM6.7mil in 2002.

The general trading division also suffered huge losses, up to RM33.48milfrom a loss of RM3.8mil previously.

Wahab said included in the asset divestment plan is Guthrie CorridorExpressway, the expressway linking all the group’s property developmentprojects in the corridor.

“We have appointed advisors to assist us in the divestment of theexpressway. Appraisal is being made and we are looking at somethingconcrete to happen in two months, he said.

The first part of the expressway, from Bukit Jelutong to Kg Melayu Subang,is scheduled to be completed in the first quarter of next year, and theremaining stretch by the end of next year.

On the group's plantations business, Wahab said more focus would be givento develop the Indonesian venture, held through PT Minamas Gemilang, PTAnugerah Sumbermakmur and PT Guthrie Pecconina Indonesia.

The three companies own and operate 53 plantation estates and 14 palm oilmills with total agriculture land of more than 200,000 hectares. Totalplanted area, the bulk of which is oil palm, is about 160,000 hectares.

Wahab is confident of the Indonesian ventures, saying conditions inIndonesia was expected to improve after the country's elections.

Indonesian operations contributed about 30% to group plantation earningslast year and is expected to improve further.

He also said the planned listing of PT Minamas would be put on hold forthe time being, as we want to add more value” to the company.

We are taking a holistic view ofour Indonesian operations. We will notrush for the initial public offering (IPO) just for the sake of one. Wewill first make our venture there strong, add more value and make peoplemore confident of our investments there, he said.

We don't see Minamas getting listed in 2005, he said. Guthrie had earlierproposed to list Minamas by end of this year.

To meet the operational challenge in Indonesia, Wahab had segregated theoperations there from those in Malaysia, with its own board members and ateam that reports to the group chief executive.

We want to be looked upon by the Indonesian public as a serious businessoperator in the country, he said.

Indonesia plantations is enjoying a good yield, achieved throughoperational efficiency and productivity, he said. The group's Indonesianestates had produced yield of 11 tonnes per hectare last year and isexpected to improve to 14 tonnes per hectare this year.

On the group's property business (Guthrie Properties), Wahab said thepolicy direction would be to move away from just converting estate landinto normal development, but to be involved in business arrangements withother property players in the country.

This new policy direction has been endorsed by the board, he said.

Wahab said Guthrie Properties will now move into joint ventures withparties to create a matching brand, a land swap or through a managed valueconcept.

If let's say a developer has a strong brand name in condominiumdevelopment, Guthrie Properties will propose to develop a similar productunder joint branding either on their land or ours. For instance, we canhave a condominium development named Jelutong-Kiara in Bukit Jelutong, orKiara-Jelutong if it is on their land.

That way, we can add more value to the existing properties in ourdevelopment, he added.

Wahab said Guthrie Properties would not resort to selling huge landbankanymore.

We will add value to our land first and sell part of it to a buyer ofchoice, he said.

Property business is expected to contribute not less than 20% to groupbottomline in the current financial year.

Reviewing the half-year results, Wahab said the operational performance inthe first six months of the year was better than the previouscorresponding period.Crude palm oil prices are now hovering at between RM1,400 and RM1,500 pertonne and we believe that it should be moving upwards towards the end ofthe year, he said.

In the group's rationalisation exercise that involved subsidiariesHighland & Lowlands Bhd and Guthrie Ropel Bhd, Wahab said it was on courseand an EGM to approve the resolution was scheduled next month.