June 7 2005 Business Times - PALM oil mill equipment and spare parts makerCB Industrial Product Holdings Bhd aims to secure up to 90 per cent of theRM100 million worth of new contracts it is negotiating this year.

Managing director Lim Chai Beng said most of the projects are to constructModipalm mills that use its patented "continuous sterilisation process",jointly developed with the Malaysian Palm Oil Board.

The Modipalm is suitable for smaller plantations and highly affordable dueto its smaller capacity, ranging from three to 20 tonnes per hour.

Lim is confident that Modipalm will contribute 80 per cent to the company’s turnover next year from 60 per cent currently.

The company has built 17 Modipalm mills that are now operational inIndonesia (11), Malaysia (four) and one each in Thailand and Ivory Coast.

Seven new Modipalm mills construction are expected to be completed by nextyear.

"For this year, we are looking to convert four palm oil mills to Modipalmmills. Three of them will be in Malaysia and one in Indonesia," Lim said.

He also said Malaysia’s 370 palm oil mills in operation will provideopportunity for replacement and upgrading of existing aging mills.

It is believed that the Federal Land Development Authority, Lembaga UrusanTabung Haji, Golden Hope Bhd and Sarawak Oil Palms Bhd are among themillers that are keen to convert to Modipalm.

Lim said the growth driver for CB Industrial will come from, among others,the oil palm plantation sector of Indonesia, Papua New Guinea, West Africaand Central America.

Currently, 60 per cent of the company’s overseas revenue is fromIndonesia.

"Indonesia will be our largest market in the future," Lim said.

He also said the acquisition of Sachiew Plantations Sdn Bhd in Sarawak isto diversify its earnings base vertically to include plantations owningand palm mill operations.

CB Industrial plans to build for Sachiew its own Modipalm mill costingRM21 million that can harvest 45 to 60 tonnes of fresh fruit bunches perhour.

The company plans to transfer its listing to the main board on BursaMalaysia Bhd next month.

"We expect to start construction work in three months’ time and completeit in September next year," he said.

CB Industrial has about RM200 million worth of projects in hand that wouldkeep it busy for the next two years.

For the fourth quarter ended December 31 2004, CB Industrial registered aprofit of RM14.64 million on a RM183.24 million revenue.