18/03/2008 (The Star Online), Kuala Lumpur - Tradewinds Plantation Bhd may be riding on high crude palm oil (CPO) prices but the company would still feel the pain of paying Supply and Cooking Oil Stabilisation cess tax, chief executive officer Chan Seng Fatt said.

“We will feel the pain (in) paying the cess tax as it is costly but we will abide by the policies set by the government,” he said after the company EGM yesterday.

Cess tax, implemented from June 1, 2007, pegs charges based on Malaysian Palm Oil Board spot prices as opposed to the respective companies' actual sales. 

Last June, Tradewinds (M) Bhd chairman Tan Sri Zainol Abidin Abd Rashid said the company was “not entirely clear” on the cess structure. 

“In a worst-case scenario, Tradewinds might stand to lose about RM10mil this year,” he said.

The cess was implemented largely to assist palm oil refiners cope with escalating costs given the high CPO price.

Chan said with the current high CPO price, it was “safe to say” that the company was still on a growth path, but declined to elaborate.

“We think CPO price will continue its uptrend, thanks to growing demand. Even at the current price, we are making good margins,” he added.

The price of crude palm oil has risen 25% so far this year, hitting a record RM4,486 a tonne on March 4.

On the acquisition of land bank and further expansion, Chan said there was “no solid proposal as yet” but added that the company would “continue to keep an open mind.” 

As at June last year, Tradewinds had 41,013ha plantation land in Johor, Terengganu and Kelantan, and 95,640ha in Sabah and Sarawak.