KUCHING: BLD Plantation Bhd will invest between RM210mil and RM280mil to develop the remaining 14,000ha landbank on peat soil in two years.
Executive chairman Datuk Henry Lau Lee Kong said it would cost between RM15,000 and RM20,000 per ha to cultivate oil palm on peat land.
“Earth clearing activities for the new planting on the remaining undeveloped peat land have started,” he told reporters after the company AGM here yesterday.
He said only about half of the group’s landbank had been planted. Out of the group’s current 28,000ha oil palm estates in Sibu and Miri Divisions, some 6,000ha were on peat land.
The plantations include joint ventures with native landowners.
More than 80% of the palm trees in its plantations have matured.
According to Lau, the group slowed down its planting activities in the past two years due to the weak palm oil market.
The group’s two palm oil mills operated at their installed capacity last year, with combined prodiction of 125,000 tonnes of crude palm oil (CPO), which was about 7% increase over 2013.
Lau said BLD’s unti Kirana Palm Oil Refinery Sdn Bhd was exploring the production of new products.
“We are looking into production of oleo-chemicals.
“We have to be very thorough in our study and this that would take more time (before a decision is made),” he said.
Kirana’s current products include refined, bleached and deodorised palm olein, palm stearin, crude palm kernel and palm kernel cake which are mainly exported to China, with India as the other buyer. In 2014,the group sold some 669,000 tonnes of palm oil products.
Lau said although the strong US dollar had benefitted export-oriented companies, like BLD, the company was faced with increasing operational costs, like minimium wages and goods & services tax (GST).
“The strong US currency is a short time happiness. The best for any business is stability (in currency exchange rate),” he said.
In the first quarter ended March 31,2015, BLD group’s pre-tax profit fell sharply to RM1.2mil from RM7.4mil in 1Q-2014 as revenue dropped to RM303.7mil from RM367.9mil.
Lau attributed the dismal performance to lower sales volume and weakened average selling price of palm oil products.