Important Note of Ta Ann 2014 Report
- The log supply shortage will be expected to maintain the timber product selling prices
- Log supply of the Group will be boosted by the commencement of sustainable harvesting of acacia from our planted forests.
- Oil palm sector is anticipated to produce higher volume of FFB and CPO from the growing mature palms.
Comments:
The PBT from timber segment was 100 million in FY2014 and expected to maintain the current selling price. We expect the contribution from Timber remain strong this year, together with the anticipation of FFB volume from growing mature palms. The Ta Ann should have positive growth in 2015.
While CPO price remain stagnant, Ta Ann most likely to outshine most of the plantation stocks in 2015 with timber business.
Ta Ann comments on year 2015 Prospects
Timber market is expected to continue its uptrend in 2015, with sustained demand for logs from India and plywood products from Japan. The log supply shortage will be expected to maintain the timber product selling prices. Log supply of the Group will be boosted by the commencement of sustainable harvesting of acacia from our planted forests. Products made from the planted forest timber are popular with the buyers. The use of only logs from legal source, as verified by an international verifying body, and PEFC certified timber as input material for our manufactured products have created competitive advantage for the Group in the market. The additional new log source from sustainable planted forests will be an added edge.
The Group’s plan forward is to seek the authorities’ approval to amalgamate 4 timber licenses and 2 licenses for planted forests into a Forest Management Unit with a license tenure of over 60 years. This would assure forest conservation in tandem with sustainable forest development, and enable and facilitate forest certification to be undertaken by the Group. Future timber resource will be a combination of sustainably harvested timber from natural forests and tree plantations. The Tasmania subsidiary will be commissioning its plywood mill in Smithton in the first half of 2015 to process our veneer into plywood for sales in local Australian market which will produce cost savings and more effective marketing. Oil palm sector is anticipated to produce higher volume of FFB and CPO from the growing mature palms. The volatility of crude oil price movement will have a significant bearing on the CPO price, and hence the performance of the palm oil sector. The Group is well poised to take up the challenges of 2015 and weather changes in the operating environment. Focus of the Group management will be to step up operation fine tuning, enhance operation efficiency and efficacy, implement more stringent cost control and devise strategy to raise competitive advantage. Barring unforeseen circumstances, the Board of Directors expects a high level of productivity in 2015.
