PETALING JAYA: Boustead Plantations Bhd (BPB) has obtained shareholders approval today the purchase of oil palm estates purchase in Sandakan from Dutaland Bhd for RM750 million.
In a media briefing after the company’s shareholders meeting, BPB vice chairman Tan Sri Lodin Wok Kamaruddin said the 42 contiguous parcels of plantation land in Sandakan, held under Dutaland’s unit Pertama Land & Development Sdn Bhd (PLD), measures a collective 11,579ha.
"We hope to complete the acquisition by mid-May 2018, which will then expand our total landbank to 93,417ha,” he said.
Back in 2011, IOI Corp Bhd had wanted to buy these same estates from PLD at RM830 million, however, the deal did not go through because IOI Corp realised the estates were underperforming, yielding only 11 tonnes of fresh fruit bunches (FFB) per ha.
When asked why is BPB buying the same estates rejected by IOI Corp, Lodin replied there had been much improvement in the last seven years.
“These plots in Labuk and Sugut are close to our existing estates. There has been much improvement implemented by PLD, in the last seven years.
"We will seek to increase FFB yield of 11 tonnes per ha to be on par with our other Sabah estates of 17 tonnes per ha,” he said.
Also present were BPB chairman Tan Sri Mohd Ghazali Che Mat, chief executive officer Fahmy Ismail, chief operating officer Chow Kok Choy and group finance director Daniel Ebinesan.
Chow said BPB plans to raise fertiliser application to the trees, replanting of unproductive palms, the construction of a new mill and upgrading of internal roads throughout the estates to speed up fruit harvesting.
The group also seek to replant about 7,400ha of the 9,998ha of plantable area in those plots, over the next 10 years, with improved high-yielding semi-clonal and clonal oil palms.
This is expected to boost the FFB yield and profitability of the estates, in the long run.
Lodin estimated RM250 million is needed for these measures which will span over 10 years.
Lodin then said 2018 is expected to be a good year with palm oil prices forecast to trade between RM2,400 and RM2,700 per tonne, driven by strong global demand.
Lodin expects all estates of BPB to receive the government driven Malaysian Sustainable Palm Oil (MSPO) certification by December 2019.
The MSPO is essentially a code of laws concerning best practices throughout the supply chain, from oil palm planting to palm oil processing.
Earlier, shareholders of BPB also approved issuance of two bonus shares for every five existing shares.
“This will raise liquidity and enlarge our capital base as well as provide loyal shareholders greater equity participation in BPB,” Lodin said.