31/10/2007 (The Star Online), Shah Alam - Southern Acids (M) Bhd registered better earnings in its core operating divisions for the financial year ended Apr 30, group managing director Datuk Low Mong Hua said.

“I am pleased to report that better earnings were registered by all the operating divisions during the year,” he said in a statement after the company's AGM yesterday.

The group's core business divisions are the oleochemicals, plantation and healthcare divisions.

According to the group's annual report, the oleochemical division contributed RM7.84mil, or 30.79%, of group operating profit, a significant improvement against the division's operating loss of RM3.164mil in the previous year.

Low attributed the division's higher profit to increasing worldwide demand for oleochemicals, which are chemicals derived from biological oils and fats.

“There is an average increase of 2% to 3% in worldwide market demand every year,” he said.

The group currently exports high quality fatty acids and glycerine to the United States, Europe, Japan, China, Taiwan and South Korea.

Its plantation division contributed RM10.47mil, or 41.12%, of group operating profit against RM1mil a year earlier. 

This division focuses on cultivating oil palm and currently has oil palm plantations in Malaysia and Indonesia.

Low said the increase in crude oil price was a contributing factor to the group's increased profits in the plantation segment.

“Palm oil is one of the cheapest oils available. When crude oil price increases, the demand for palm oil increases.”

Low also said that tallow (rendered fatty oil from cows), which was generally cheap, was also losing popularity as a result of the rise in the mad cow disease and as more people chose vegetable based oil for health reasons.