22/05/2008 (Bernama), Sibu - Ta Ann Holdings Bhd, the country biggest integrated timber player, plans to spend RM115 million this year to further boost its oil palm division.

Executive chairman, Datuk Hamed Sepawi, said the company planned to develop another 6,000 hectares to plant the crop.

The group has a landbank of 54,649ha, of which over 18,000ha had been planted and were in various stages of growth, he said in the annual report for the financial year ended Dec 31, 2007.

Hamed said Ta Ann had managed to offset the weaker earnings from its core plywood division last year with a strong performance from its palm oil.

"High crude palm oil prices have enabled us to achieve good returns from sales which validate our corporate strategy of diversifying into the palm oil business to cushion the impact of the volatile timber earnings," he said.

Ta Ann will hold its 11th annual general meeting here today.

Hamed said the 2007 financial year was a challenging one for the group due to the persistent weakness in plywood prices caused by a combination of several factors in Japan.

"These included the high inventory in plywood products held by Japanese trading houses and severe slowdown in housing starts due to the implementation of new building codes in Japan," he said.

He said last year, the company made two acquisitions, Borlin Sdn Bhd and the Tanjung Manis Holdings, and these had increased its timber concession areas by 157,023ha.

"Borlin will add 32,000ha to our existing 435,255ha of licensed timber concession. It has an annual log production quota of 36,000 cubic metres and we expect the acquisition to boost earnings," he said.

He said Tanjung Manis Holdings had a 125,000ha timber concession in Batang Balleh in the Kapit Division.

"We have acquired the entire equity stake in Tanjung Manis. This will secure our long-term resource position as we will have direct control and ownership," he said.