May 13, 2004 - GOLDEN HOPE Plantations Bhd (GHope) is gearing itself to bean integrated player in the plantation industry with equal focus onupstream and downstream activities.

Already an established player in oil palm plantations, the group is nowputting emphasis on adding value to its existing products through directinvolvement in the downstream business.

We expect downstream activities to contribute about 40% of revenue in thenext five years, group chief executive Sabri Ahmad told StarBiz in aninterview.

He said it was a natural progression for GHope to move further into thedownstream business to help cushion any uncertainty in crude palm oil(CPO) prices.

If CPO prices are on an uptrend, we will benefit. But if they were tofall, then our downstream business, which uses CPO as raw material, wouldtip the balance for the group, he explained.

Previously, GHope could bank on property development to help cushion itsbottom line against CPO price fluctuations. But it would no longer be abledo so after the asset rationalisation exercise it is undertaking withIsland & Peninsular Bhd (I&P).

GHope will emerge as a pure plantation player after the soon-to-becompleted assets swap with I&P.

And with the inclusion of Austral Enterprises Bhd's estates, GHope'splantation land bank in Malaysia will jump to 190,000ha, putting the groupsecond only to Felda.

We expect our revenue to hit RM5bil in less than five years with the assetswap. As a pure plantation company, we can now focus our resources onbecoming an integrated plantation player, Sabri said.

Internationally, GHope has made inroads into the European market with itsholding in Unimills, a refinery it purchased from Unilever in 2002.

Unimills provides us with the opportunity to tap the European marketfurther. From there, we can explore new opportunities in the easternEuropean countries such as Russia, Poland, Hungary and even Ukraine, hesaid.

The company has also moved into the South African market via its recentpurchase, also from Unilever, of Unilever Bestfoods Robertsons, a bakeryoils and fats refinery near Johannesburg.

The purchase will immediately give GHope the rights to about 45 brands inthe South African market.

We intend to serve the South African market and also nearby countries likeZimbabwe and Tanzania, Sabri said.

GHope, he added, would like to be present in every continent and was,therefore, constantly on the lookout for opportunities to invest abroad.

We are already in Europe and South Africa. We are now looking at Turkey,Australia and also the United States if there are any good opportunities,he said.

In Asia, the company has an edible oil factory in Vietnam. It is alsoproducing and marketing edible oil in Bangladesh in a joint venture withthe Kuok group.

Sabri said the company was also planning to expand its oleochemicalsbusiness either through the acquisition of another company or expansion ofits existing facility in Banting, the operation of which is undertaken byCognis Oleochemicals (M) Sdn Bhd.

The profit contribution from GHope's overseas venture is still small,leading an analyst at AmResearch to comment that it would perhaps bebetter for the company to keep its money at home for other more profitableventures.

Sabri, however, is optimistic about the overseas ventures, saying thebenefits of such moves could only be seen in the long run.

We are already supplying products to our major customers worldwide likeNestle, KFC, Unilever and United Biscuits. But we want to go beyondrefined products and provide total solutions to our customers, he said.