27/3/06 KLANG (The Star)  -   Palm oil mill expert, CB Industrial Product Holding Bhd (CBIP) will implement strategic moves this year to boost earnings and position the group in domestic and international markets. 

Backed by 26 years of core competencies in constructing palm oil mills for plantation companies regionally, managing director Lim Chai Beng told StarBiz that the group would further expand into Papua New Guinea (PNG) and Indonesia, as well as increase its oil palm plantation in Sarawak.

He said CBIP also planned to set up its first RM22mil oil palm mill in Sarawak this year, using the successful homegrown commercial brand Modipalm, a patented technology which adopts the “Continuous Sterilisation Process” (CSP), developed together with the Malaysian Palm Oil Board. 

“We believe the group will execute these plans smoothly, given the positive medium-term outlook in the overall palm oil industry,” Lim said, adding that this augured well for the demand and upgrading of palm oil mills in Malaysia and overseas.

To date, the palm oil mills business is the single largest contributor of over 90% to group turnover. 

“Over the past three years, our Modipalm CSP had gained good reputation in the palm oil mill sector regionally, especially among the new generation of palm oil millers,” he said.

 
Lim Chai Beng
The product has proven its efficiency in terms of minimising oil extraction losses, operations and maintenance costs. It is also environmental friendly.

Lim said many palm oil mills in Malaysia were still using the conventional method, and their technology had not been changed much over the past 60 years. 

“It was difficult initially to prove that the Modipalm CSP method was the best to the older generation of palm oil millers, but we persevered and managed to finally convince them.

“I am confident that more than half of these conventional palm oil mills will switch to our technology by 2008, compared with other technologies available in the market,” he added. 

By year-end, Lim is targeting for order book estimated at RM400mil. This will keep the group busy till 2008, he added. 

The demand for Modipalm is expected to grow stronger over the next two years, mainly from Malaysia, Indonesia and PNG, he added.

CBIP's long list of clients includes local plantation giants like Kumpulan Guthrie Bhd, Tabung Haji Plantations Bhd, Golden Hope Plantations Bhd, Austral Enterprises Bhd, Tradewinds Bhd, as well as Indonesian plantation groups like PT Agro IndoMas, PT Harapan Sawit Lestari, PT Rea Kaltim Plantations, PT PP London Sumatra Indonesia and PT Pulau Hijau Asri Group. 

Lim explained that CBIP was keen to venture into Papua New Guinea and Indonesian palm oil mill projects due to the aggressive oil palm plantation activities in these countries. 

“More oil palm plantations will translate into more fresh fruit bunches (FFB) to be processed into palm oil. This will be to our advantage as we are highly experienced in palm oil mill construction and able to provide assistance in the operation of the mills as well,” he added.

Furthermore, most of CBIP’s existing clients are also expanding their oil palm plantations in PNG and Indonesia.

“We will continue to support our clients that will be setting up more palm oil mills to cater to the huge demand for the commodity in the world market for food and the latest in biodiesel production,” said Lim.

He also said CBIP did not want to lose out on the lucrative palm oil industry and had decided to expand vertically as a plantation player through the acquisition of an 8,000-acre mature oil palm plantation in Miri, Sarawak.

“We plan to increase our existing plantations up to 20,000 acres for economies of scale over the next few years,” he said, adding that CBIP was talking to three parties on the potential acquisition of more plantations in Sarawak.

Lim said the group expected its oil palm plantations to produce 52,000 tonnes of FFB this year. 

“Our maiden palm oil mill in Sarawak will have a production capacity of 30-tonne per hour,” he said. 

According to Lim, the plantation division will be a long-term and fixed-income base for CBIP, going forward.