PETALING JAYA: Plantation-based United Malacca Bhd will focus on sustaining good yields during the current challenging times amid the Covid-19 pandemic environment.
According to its chief executive officer Peter Benjamin, the group will particularly look at mechanisation for all jobs possible at its plantations in its effort to mitigate the current labour shortage experienced by planters nationwide.
However, despite these challenges, he told StarBiz that “We expect the outlook for United Malacca will be better this year given the current higher crude palm oil (CPO) prices compared with the previous year.”
Peter expects that the CPO average price would likely sustain above RM3,000 per tonne this year.
Last Friday, the third-month benchmark CPO futures contract for July closed RM124 higher at RM3,716 per tonne while the spot CPO price firmed at RM4,250 per tonne respectively.
Peter also said that “Year-on-year (y-o-y), the group has seen an increase in production for its plantation in Malaysia.
“But, for operation in Indonesia, the dry weather during the previous years had affected the yields in our operations in Indonesia.”
Having said that, he said United Malacca did see better yields in the coming year.
“Generally, we will see higher production y-o-y in the coming year for the group, ” added Peter.
Of United Malacca’s 48,554ha total landbank, 23,617ha are in Malaysia and 24,937ha are in Indonesia.
Peter pointed out that labour shortage in Malaysia has been the main issue faced by many planters nationwide.
“With the borders closed during the pandemic, we (planters) have not been able to recruit new workers.
“It has been a big challenge for plantations to recruit local workers, who are not interested to work in the plantations, ” said Peter, who is also president of the Malaysian Estate Owners Association.
Asked about the progress of its cash crop planting activities in Indonesia that was halted back in September last year, Peter said “We still need to need to complete the high conservation value (HCV) and high carbon stock (HCS) assessment before the next course of action can be determined.
“Due to the Covid-19 pandemic, we are unable to state with certainty the time frame needed to undertake the HCV/HCS study.
“The HCV, HCS and impact assessments are important to mitigate the significant sustainability risks associated mostly with new plantation development.”
United Malacca decided to halt the operation of its 60% owned Indonesian joint-venture PT Wana Rindang Lestari in Sulawesi starting Sept 26 last year to address the environmental issues raised by several non-governmental organisations (NGOs).
United Malacca is embarking on a large scale commercial cash crop joint venture in Sulawesi.
The group was supposed to initially start planting its first large-scale cash crop, stevia, which is a popular substitute for sugar – on a 100ha site last year.
Meanwhile, analysts are positive on United Malacca’s road to recovery which they expect to post stronger results in the fourth quarter financial year 2021 (4QFY21).
Kenanga Research in its recent report expects a strong 4QFY21 to be supported by higher fresh fruit bunches output and CPO prices.
It has also raised the group’s core net profit by 6% for FY21 and 3% for FY22 respectively.
Last Friday, United Malacca share price closed four sen lower at RM5.16.