KUALA LUMPUR: Chin Teck Plantations Bhd, which made its second foray into Indonesia last year, plans to cultivate 2,000 to 3,000ha of oil palm trees in Sumatra this year.
Executive director Wong Aun Phui said the company, which owns some 14,000ha of oil palm land under a joint-venture project, had cleared 300ha and planted 200ha.
“Our second joint venture will help enhance the earnings potential of the group and is in line with its strategy to increase its oil palm interest,” he said after the company's AGM yesterday.
Last year, Chin Teck teamed up with sister company Negri Sembilan Oil Palms Bhd and several other partners to each buy a 40% stake in Chin Thye Investment Pte Ltd.
Chin Thye would, in turn, own 70% of Indonesian company P.T. Lampung Karya Indah that was licensed to undertake plantation operations in Sumatra.
Wong said Chin Teck's second plantation project in Indonesia would contribute significantly in seven years if the price of crude palm oil remained at the current level.
The company made its foray into Indonesia eight years ago and has to date developed 20,000ha in Sumatra.
Locally, it has estates in Pahang, Kelantan and Negri Sembilan, with a combined planted area of 30,000 acres.
“We are also looking at expanding our landbank locally, if we can get sizeable plantation land of say, 10,000 to 15,000 acres,'' he said.
He added that the company's expansion would be mainly financed by cash.
He also said none of Chin Teck's estates, locally or abroad, were affected by floods.
On its food and confectionary joint-venture projects in China, Wong said the group's associate company, Gaeronic Pte Ltd, was expected to return to the black this year after posting a RM4.75mil pre-tax loss for the year ended Aug 31, 2006.
“We have overcome our human resources problem and embarked on an aggressive brand building and promotional campaign last year.
“We have seen positive results for the last two months,” he said.
Chin Teck registered a higher net profit of RM7.68mil in the first quarter ended Nov 30, 2006 from RM4.84mil in the previous corresponding period.