Record palm oil prices propel Kulim’s 2021 results to new heights
31/07/2022 (The Sun Daily), Petaling Jaya - Kulim (Malaysia) Bhd reported its best-ever financial results in 2021 on record palm oil prices and improved operational efficiencies from its ongoing transformation programme to become a leading agribusiness company.
On the back of another challenging year arising from the prolonged Covid-19 pandemic and other external factors, Kulim turned in a group pre-tax profit of RM433.81 million for the financial year ending Dec 31, 2021, reversing the previous period’s loss of RM316.45 million.
Revenue surged 48.56% to RM1.65 billion from RM1.11 billion the year before despite lower sales volumes and yields from its plantations. This was achieved on higher average selling prices for crude palm oil and palm kernel, which increased by 60.66% and 77.64%, respectively. Together with lower impairment and provision expenses compared to a year earlier helped the group to return to the black.
Under the circumstances, Kulim still managed to harvest 20.11 metric tons per hectare (MT/ha) from 22.93 MT/ha in 2020, higher than the industry average in Johor and Peninsular Malaysia of 17.73 MT/ha and 16.24 MT/ha, respectively. In the same period, the group processed a total of 1,419,613 MT of fresh fruit bunches and produced 295,747 MT of crude palm oil (CPO). The oil extraction rate decreased to 20.83%, from 21.04%, yet remained higher than the industry average of 19.68% for Peninsular Malaysia and 19.92% for Malaysia as a whole.
“While we were operationally stretched by insufficient manpower, financially we stood to benefit from skyrocketing palm product prices. This translated into one of our best financial results to date despite sub-optimum production and yield,” said Kulim managing director Mohd Faris Adli Shukery in a statement today.
The easing of restrictions on foreign labour entry enabled optimal harvesting operations by the group to capitalise on the high CPO prices.
Moving forward, Kulim is set to expand its foray beyond oil palm plantation into an integrated agribusiness player. It is looking to strengthen its position in the midstream and downstream through partnerships and/or acquisitions of refineries and palm kernel crushing plants. It is also expanding its cattle and sheep livestock business and explore partnering with a dairy producer.
The group is also looking at building a robust and thriving agrifood portfolio to contribute positively to the national food security agenda.
“Our ultimate objective is for Kulim to become a flagship company that can enhance the state and national food security agenda. We will seek to establish a food marketplace for smallholders, large private players and government-linked companies,” said Mohd Faris.
A new business segment in Kulim, agrofarming includes intensive farming and mono-crop to supply quality vegetables and fruit for the Malaysian market. In doing so, it is adopting IR4.0 technology such as the Internet of Things to further enhance crop management while leveraging automation to reduce labour requirements.