19/1/06 KUALA LUMPUR, (Bernama) -- Golden Hope Plantations Bhd, the world's second biggest producer of fatty acids, aims to achieve RM1 billion in pre-tax profit in four years.

"The RM1 billion profit is achievable if we put our shoulders to the wheel," said its chairman, Tan Sri Dr Ahmad Sarji Abdul Hamid.

"The estates for example would now have to ensure that the vision of yielding 30 tonnes per hectare by 2010 is realised," he said at the Golden Hope's Regional Manager's Conference Dinner 2006 recently.

"With 30 tonnes per hectare, we will be able to produce around 4.6 million tonnes of FFB (fresh fruit bunches)," Dr Ahmad Sarji said.

At this rate, he said the Group would have already achieved around 50 percent more than what it produced in the 2004-2005 financial year.

"By 2010, our mills around the country should achieve an oil extraction rate (OER) of 25 percent as envisioned by mission 30:25," he added.

If this mission is accomplished, it would be getting a total of 1.15 million tonnes of crude palm oil (CPO).

"It is along with an estimated 230,000 tonnes of palm kernel oil (PKO) from our mills," the chairman said.

He said that assuming that the selling price of CPO stagnates at RM1,200 per tonne and PKO hovers around RM900, the total revenue generated would be close to RM1.6 billion, he said.

Currently, CPO price stands at RM1,450 per tonne while PKO at RM970.

He said that if the cost to produce CPO was at the current level of RM750 a tonne, the total cost of production would be around RM865 million.

However, he said in arriving at these figures, many important variables have been left out such as inflationary pressures, ringgit depreciation against the US dollar and other provisions.

"We have to keep in mind that if our plantation division does not expand, it can only contribute at most 75 percent of the targeted amount," he said.

The rest of the profits will have to come from the other areas, especially from the oil and fats division, he added.

The company's biodiesel projects are expected to show results in a few years and hopefully by 2010, it could contribute significantly to the company's pretax profit while prospects are also very bright in the oleochemicals sector.

In trying to achieve RM1 billlion profit, he said that the group should not only look at trying to increase its revenue streams but also look at reducing costs.

For example, in CPO production, costs should be below RM650 per tonne for the next few years.

"I hope in our vigorous pursuit of profits, we do not lose sight of our values," said Dr Ahmad Sarji, adding that the concept of Amanah or trust is a very basic principle in Islam.

He said that this concept stresses on the idea of responsibility towards organisational stakeholders.

-- BERNAMA