Press Statements

Production rise on the way

Wednesday, June 6 2012

KUCHING: Sarawak Oil Palms Bhd (SOP) will raise further its fresh fruit bunches (FFB) output as more of its significant size of immature oil palm estates start to produce.

As at end of last year, the group had 19,416ha immature estates, which made up 31% of its total 62,755ha plantation.

Areas under prime production age (11-20 years) cover 15,165ha or 24% while 23,212ha or 37% comprise young palms (four-10 years). Old palm trees of at least 21 years old cover 4,962ha or 7.9%.

SOP group executive chairman Tan Sri Ling Chiong Ho said the group’s FFB production was expected to increase over the next few years upon maturity of new planting areas.

He said the FFB production would also be boosted with more palms coming to their prime production age.

Last year, SOP group’s FFB production rose by 24.7% to 839,785 tonnes from 673,260 tonnes in 2010 due mainly to increase in mature areas, coupled with more young palms coming into prime production age.

“In 2011, the group planted an additional 3,919ha of oil palms,” he said in the company 2011 annual report. The group’s total landbank stood at 72,653ha.

Ling said FFB’s yield per ha increased by 2.5% to 20.37 tonnes as a result of dilution effect from the newly mature area.

Oil extraction rate, however, dropped to 20.9% from 21.23%. The group reported oil per ha of 4.26 tonnes.

He said the group’s fifth palm oil mill in Kemena, Bintulu, with 60 tonne per hour capacity, would be operational by next month. The sixth mill (90 tonne per hour capacity) in Baram, Miri is expected to be commissioned in second half of 2013.

The group’s first palm oil refinery and fractionation plant and kernel crushing plant in Bintulu will start commercial production this month.

Going forward, Ling said the group would be facing substantial increase in operating cost, particularly in the increase of salary and wages as well as general increase in cost of operations.

“The challenge for the group is to further improve its efficiency and productivity in order to maintain the profit margin.

“The group will continue to work on achieving and realising the full potential of its present resources.”

Ling said SOP’s net profit soared by 62% to RM266.2mil last year from RM164.3mil in 2010. Group revenue ballooned to RM1.17bil from RM728.2mil or an increase of 60%. Earnings per share improved to 55.9 sen from 35.3 sen.

He attributed the sterling performance to strong palm oil prices and higher FFB production.

(The Star)