14 May 2002 (Business Times) - PLANTATION-based TSH Resources Bhd willinvest about RM40 million to construct a 10- megawatt (MW) biomass powerplant in Sabah.“We are currently negotiating with the State Government to sell a portionof the power we produce and, if everything goes well, the plant will startoperations in the third quarter of 2003,” said group managing directorDatuk Kelvin Tan.He said the power plant will use the empty fruit bunches (EFB) from itstwo existing palm oil mills, which produce about 700 tonnes of EFB a day.“With the biomass plant, the company will be able to turn waste intoenergy and will generate income from it,” Tan said.He added that the additional income will benefit TSH Resources and enhanceits competitiveness in the oil palm industry.TSH Resources currently generates 1MW of biomass energy for usage in itsmills.“We are also planning to build another palm oil mill in Sabah, which willhave a capacity to process 450,000 tonnes of fresh fruit bunches (FFB) ayear,” Tan said.The new mill, which will be operational in the first quarter of 2003 andcost about RM25 million, will be the biggest in the company and will boostits processing capacity to a total of 1.05 million tonnes of FFB a year.Tan said the company is also trying to promote the use of hardwoodflooring in Malay-sia. “Our subsidiary, TSH Ekowood Sdn Bhd, currentlyexports over 90 per cent of its products. Initially, we hope to increaselocal sales to 10 per cent,” he said.TSH Ekowood is the largest hardwood flooring manufacturer in Malaysia,producing 12 million sq ft of products and contributing about 40 per centto the group’s earnings.Tan was speaking to the media after signing an agreement for an Islamicprivate debt securities scheme with Aseambankers (M) Bhd and four otherunderwriters.Aseambankers is the adviser and lead arranger for the programme whileAffin Discount Bhd, Malaysia Discount Bhd, Maybank Discount Bhd andMalaysian Trustees Bhd are the underwriters.Under the programme, TSH Resources will raise RM100 million through theissuance of Al-Murabahah Commercial Papers and Medium Term Notes.“For now, the amount of RM100 million (to be) raised plus our internalfunds will be sufficient for the company to carry out all its expansionplans,” Tan said.Despite the fund-raising exercise, the company’s gearing level will remainlow at 0.4 times by the end of the year.The tenure of the programme is up to seven years from the date of thefirst issuance. During the period, TSH Resources can issue commercialpapers (CP) of between one and 12 months and medium term notes (MTN) ofbetween one and seven years.Malaysian Rating Corp Bhd has assigned a long-term rating of A+ for theMTN and a short-term rating of MARC-2 for the CP.On the Kuala Lumpur Stock Exchange yesterday, TSH Resources shares weretraded 1 sen higher at RM2.12 with 19,000 shares changing hands.

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