20/06/2011 (The Star) - Sarawak Plantation Bhd (SPB) is in advanced negotiations to acquire a 3,000ha matured oil palm plantation from a private company in northern Sarawak.

Group managing director Datuk Hamden Ahmad said SPB was now carrying out a survey on the land, particularly on the conditions of the oil palm trees, which were between seven and eight years old.

“If the condition of the trees and the selling price of the plantation are good, we should be able to finalise (the deal) this year,” he told StarBiz after the company AGM last Thursday.

With a group cash reserve of about RM120mil, SPB was financially sound to finance the proposed acquisition, said Hamden.

“Several banks were also keen to provide loans as the current prices of crude palm oil were good,” he added.

He said SPB was also in talks with a group of native customary rights (NCR) landowners in Sarikei to develop about 3,000ha into oil palm plantation on a joint-venture basis.

SPB has some 25,000ha oil palm estates in Miri and Mukah divisions, out of which 24,000ha are planted with matured trees. The group has some 10,000ha landbank.

“Our target is to expand our plantation by at least 5,000ha a year. The group's capital expenditure is between RM30mil and RM40mil a year,” said Hamden.

Its target is to increase its planted area to 60,000ha in the medium term, with a long-term goal of 100,000ha.

He said the group would spent between RM5,000 and RM7,000 per ha to replant around 1,000ha of old estates in Mukah last year. Some of these estates were developed about 40 years ago.

“As these oil palm trees had grown too tall, the harvesting costs were high.

“SPB plans to increase its fresh fruit bunches (FFB) production to 384,000 tonnes this year, up from 275,000 tonnes last year.

“The target yield is set at 17 tonnes per ha per year compared with last year's yield of 12 tonnes which was low,” he added.

Hamden said the low yield was due to several factors including poor manuring and maintenance due to labour shortage.

The recruitment of some 700 Indonesian workers in recent months has helped to overcome the problems. The group currently has over 2,000 workers.

Hamden said similar to other plantation companies, SPB was facing labour shortage with major improvements and upgrading of infrastructure being carried out in its estates to cater for mechanisation.

The main focus is on in-field FFB collection, mainline transport, fertiliser application and weedicide spraying.