28/4/06 (Business Times)  -  PLANTATION group Kumpulan Guthrie Bhd, which is 73.5 per cent owned by Permodalan Nasional Bhd (PNB), will spend RM109 million on planting and expansion activities this year.

Group chief executive officer Datuk Abdul Wahab Maskan said RM57 million will be used for the replanting and planting of oil palm trees at its estates in Malaysia and Indonesia and the balance to build two new palm oil mills in "the south of the peninsula".

It currently has 13 mills in Malaysia and 21 mills in Indonesia.

Abdul Wahab said the planting and replanting activities involves 2,500ha in Malaysia and 13,100ha in Indonesia.

Currently, Kumpulan Guthrie has a landbank of 101,603ha in Malaysia and 220,201ha in Indonesia with a planted area of 98,725ha and 164,124ha respectively.

"We have started replanting and planting of oil palm trees ... we are using our newly-developed clone material called the AAB1, which has the potential to enhance yields by 30 per cent compared with the current seedlings," he told Business Times in an interview.

The interview was in conjunction with the ongoing week-long Minggu Amanah Saham Malaysia (MASM) organised by PNB in Kuala Terengganu.

Abdul Wahab said the AAB1, developed by its subsidiary Guthrie Biotech Laboratory Sdn Bhd, will give the group an edge in the highly competitive vegetable oil industry.

Abdul Wahab said yields obtained from trials of the clone palm planted in 1999 have shown great potential for increased productivity, yielding a high oil-to-bunch ratio equivalent to up to nine tonnes of crude palm oil per hectare.

He said most successful commercial plantations produce some six tonnes of crude palm oil (CPO) per hectare.

He is optimistic that the new technology will help increase CPO production at its plantations in both Malaysia and Indonesia thus taking the company to a new level and put it ahead of the competition with new innovative products.

"We have projected that the AAB1 will have the ability to increase CPO production to 4.1 tonnes per hectare from the present 3.5 tonnes in Malaysia and 3.4 tonnes in Indonesia," he said.

Abdul Wahab hopes that through promoting innovative products, more opportunities can be created for Kumpulan Guthrie which will lead to a healthier bottom line.