PETALING JAYA: Sarawak-based timber and plantation groupTa Ann Holdings Bhd expects maturing oil palm plantations, which represent 60% of its total plantation land, to help further reduce the group’s cost of production (COP) this year.
Group managing director and chief executive officer DatukWong Kuo Hea said: “We are banking on our matured oil palms to contribute to a higher production of fresh fruit bunches (FFB).
“We are also hopeful that our profit can be supported by a stable crude palm oil (CPO) price, currently trading in the range of RM2,400 per tonne.”
In 2012, the group’s consolidated FFB production rose to 505,205 tonnes from 457,973 tonnes a year earlier. At present, the group’s average COP was between RM1,200 and RM1,300 per CPO tonne, Wong told StarBiz.
The COP usually covers the upkeep or cultivation expenses, fertiliser application, harvesting, transportation, other estate charges and labour costs.
Sarawak oil palm planters, in particular, have the most challenging task, as their COP tends to be higher because many are planting on peat land unlike their peninsular and Sabah counterparts, who plant on mineral soil.
Last year, Ta Ann increased its oil palm estates by 4,434ha to 35,345ha. Most of its plantations are located in the central region of Sarawak.
Kenanga Research in its recent report also believes that only oil palm planters with high FFB growth would be able to deliver higher earnings expansion in the current low CPO price environment.
The research unit is maintaining a “neutral” call on the plantation sector, with its CPO price estimate unchanged at RM2,500 per tonne for 2013 and RM2,700 per tonne for 2014.
It also said previous optimism over the sustained inventory decline had been neutralised by weak soybean oil prices, lower crude oil prices and the strengthening of the US dollar.
Where palm oil inventory in Malaysia is concerned, Kenanga expects it to register a sixth consecutive decline in June to 1.75 million tonnes, supportive of CPO prices.
Meanwhile, on Ta Ann’s unit Ta Ann Tasmania Pty Ltd (TAT) in Australia, Wong said all matters had been resolved, following the Australian government’s compensation of A$28.6mil (RM82.91mil) for surrendering partially TAT’s peeler wood supply entitlement held under contract with Forestry Tasmania.
- The Star Business Tuesday July 2, 2013 MYT 8:00:00 AM
Group managing director and chief executive officer DatukWong Kuo Hea said: “We are banking on our matured oil palms to contribute to a higher production of fresh fruit bunches (FFB).
“We are also hopeful that our profit can be supported by a stable crude palm oil (CPO) price, currently trading in the range of RM2,400 per tonne.”
In 2012, the group’s consolidated FFB production rose to 505,205 tonnes from 457,973 tonnes a year earlier. At present, the group’s average COP was between RM1,200 and RM1,300 per CPO tonne, Wong told StarBiz.The COP usually covers the upkeep or cultivation expenses, fertiliser application, harvesting, transportation, other estate charges and labour costs.
Sarawak oil palm planters, in particular, have the most challenging task, as their COP tends to be higher because many are planting on peat land unlike their peninsular and Sabah counterparts, who plant on mineral soil.
Last year, Ta Ann increased its oil palm estates by 4,434ha to 35,345ha. Most of its plantations are located in the central region of Sarawak.
Kenanga Research in its recent report also believes that only oil palm planters with high FFB growth would be able to deliver higher earnings expansion in the current low CPO price environment.
The research unit is maintaining a “neutral” call on the plantation sector, with its CPO price estimate unchanged at RM2,500 per tonne for 2013 and RM2,700 per tonne for 2014.
It also said previous optimism over the sustained inventory decline had been neutralised by weak soybean oil prices, lower crude oil prices and the strengthening of the US dollar.
Where palm oil inventory in Malaysia is concerned, Kenanga expects it to register a sixth consecutive decline in June to 1.75 million tonnes, supportive of CPO prices.
Meanwhile, on Ta Ann’s unit Ta Ann Tasmania Pty Ltd (TAT) in Australia, Wong said all matters had been resolved, following the Australian government’s compensation of A$28.6mil (RM82.91mil) for surrendering partially TAT’s peeler wood supply entitlement held under contract with Forestry Tasmania.
- The Star Business Tuesday July 2, 2013 MYT 8:00:00 AM
