Strong demand: The Malaysian Palm Oil Board expects crude palm oil prices in 2023 to range between RM4,000 and RM4,200 per tonne.
GEORGE TOWN: Oriental Holdings Bhd
will expand the plantation, automotive and healthcare segments to diversify its income streams.
The group plans to spend about RM39.7mil in the financial year 2023 (FY23) for new planting, the acquisition of plants and machinery for oil mills, and estate buildings.
According to its latest annual report, the strategy in Malaysia for FY23 is to replant 181 ha.
As for new planting activities in Indonesia, where the group has planted 13,009 ha, the annual report said the target is to grow about 800 to 1,200 ha yearly over the next two years.
In FY22, the group spent RM68.3mil for the plantation segment compared to RM64.8mil in the preceding year.
“The capital expenditure consisted mainly of development costs for its Indonesian operations, including new planting and replanting of oil palm, construction of staff quarters and acquisition of agricultural equipment and vehicles,” the report says.
Oriental continually evaluates its portfolio to ensure competitiveness and unlock the value of its investment when an opportunity arises.
“Regarding our Indonesian operations, we strive to further consolidate plantation operations with a critical review of the current land bank,” it added.
The group will remove marginal land from development, focus on developing existing land banks into premium quality plantations, and expand planted hectarage via the acquisition of cultivated areas and plantation companies which fit our technical specifications and affordability requirements.
“We will continue prioritising controlling costs and yield improvements through better agronomic administration and reorganising harvesting operations.
“Another area of focus is the automation and mechanisation of the operations at our mills and estates, as reliance on human resources restricts the institution of quality control for field works,” it noted.
As of Dec 31, 2022, the group’s plantation land bank concession stands close to 102,327 ha, of which 42,239 ha have been planted with oil palm trees.
About 97,369 ha are in Bangka Island and South Sumatra in Indonesia, while the remaining 4,958 are in Pahang and Negri Sembilan.
“The Malaysian Palm Oil Board expects crude palm oil prices in 2023 to range between RM4,000 and RM4,200 per tonne in anticipation of higher palm oil production and strong demand,” the report added.
On its automotive business, the report says there are now more than 10,000 registered electric vehicles (EVs) in the country and 900 public EV chargers.
Malaysia aims to install 10,000 EV charging points by 2025 through the Low Carbon Mobility Blueprint, while the Singapore Green Plan 2030 targets to electrify the vehicle population to help Singapore achieve its vision of 100% cleaner energy vehicles by 2040.
“Singapore has also invested more in charging infrastructure and rolled out tax incentives for hybrids and EVs,” it said.
The group will, therefore, explore plans to launch more hybrid or EVs to grow its market share.
On the hotels and resorts segment, the annual report says Bayview International will continue developing its brand and direct booking platform by implementing Member Deal into the hotels’ brand website, advertising direct booking campaigns, and encouraging direct booking via loyalty programmes, deals and membership offerings.
Bayview International will continue to carry out upgrading exercises on its digital distribution channels to improve market share because digital technology is essential in empowering the group’s hotel business to meet customers’ evolving expectations and needs with more efficient and innovative digital platforms and capabilities.
“We will reserve about 3% to 4% of our revenue per year for capital expenditure to ensure the properties remain in optimal condition at all times to create positive customer experiences,” the report added.
On its healthcare segment, the group’s strategy is to reach out to foreign medical travellers.
The group plans to set up new retail community-based pharmacy outlets, monitor the progress of setting up an aged care facility and transitional care centre for patients requiring medical or rehabilitative services
Oriental also plans to collaborate with the public healthcare sector on health-related programmes, explore healthcare eCommerce opportunities for doctors to provide online consultations, and look for opportunities to expand.
On its investment properties and trading of building material products business, the segment expects its performance to remain challenging because of the ongoing uncertain business environment coupled with escalating building material prices.
Oriental continues to reclaim the remaining 110 acres in Melaka and explore increasing the value of its land bank for future development whenever opportunities arise.
According to the report, the land reclamation works in Melaka are strategically located between Kuala Lumpur and Singapore, close to Ayer Keroh, the toll exit point to Melaka along the North-South Highway.
The reclamation for the remaining 110 acres of the concession, which commenced on Feb 23 this year, would take about 30 months to complete. The group’s OMSMC and Nilam Nursing College are constructed on the reclaimed land.
