KUALA LUMPUR: Diversified KUB Malaysia Bhd will undertake a right sizing exercise for the financial year ending December 31 2019 (FY19), in order to swing itself back into the black.
President and managing director Datuk Abdul Rahim Mohd Zin said KUB was discussing with a number of affected employees.
“We are still figuring out how many employees will be affected but I can say is that the palm oil estates workers will not be affected given that we are already experiencing shortages there,” Abdul Rahim told reporters after KUB’s annual general meeting here today.
He added that the group would be offering “good packages” to affected staff, but did not elaborate.
Abdul Rahim is positive on the impact of the impending sale of its palm oil mill in Sarawak.
It is in the advance stages of discussions with a potential buyer.
The 88,745 sq ft KUB Maju Mill Sdn Bhd is worth an estimated RM45.48 million.
"This will help to improve our cash flow situation, especially as we have bank borrowings for the mill, and eliminate losses from the mill," said Abdul Rahim, adding that the sale announcement would be made within the next two to three months.
KUB currently has three properties in Sarawak, inclusive of the mill and two oil palm estates.
It is represented by a combined estate area of 4,676.2 hectares amounting to RM48.22 million in Peninsular Malaysia, which are owned by subsidiary KUB Sepadu Sdn Bhd.
When asked if the group was aiming to increase its land bank in Sabah and Sarawak, Abdul Rahim said: "We were badly hit on our cash flow, but we need to focus on our investments."
For FY19, the group allocated between RM40 million to the higher end of RM50 million in capital expenditure.
Last year was challenging for KUB due to the slump in crude palm oil (CPO) prices and a flood in Sarawak.
“CPO prices have plummeted from average of RM2,800 to RM3,000 per tonne to below RM2,000, which has caused a huge losses to our plantation sector.
“For Sarawak particularly, due to unfavourable weather, there was a flood. This has affected our operations and increased our productions cost,” he said.
KUB also sold its entire stake in A&W Malaysia for RM34 million last year.