Showing posts with label Jaya Tiasa. Show all posts
種植業面臨盈利懸崖＂‧末季盈利料挫30%
吉隆坡4日訊）種植股第三季業績令市場大失所望，歸咎於棕油價疲弱及庫存高企，肯納格研究不排除種植業將陷入“盈利懸崖＂，末季盈利料至少按年及按季挫30%及20%，種植股財測最高遭下調14%，並相信仍有進一步滑跌空間。
庫存按月跌1%
按年大增20%
按年大增20%
肯納格預期11月棕油產量仍高企於249萬公噸，接近歷史高位，導致棕油價揚升空間受限，短期內難以突破2千500令吉。雖然按月棕油庫存微跌1%，不過卻按年顯著攀升20%。
“我們相信高庫存困境將延續至明年首季，3千令吉成為重大阻力水平。＂
按季計，種植股盈利或將丟失超過20%，因為末季棕油價料挫跌21%至2千250令吉。
“由於棕油價從10月初起跌穿2千500令吉，並已處於低位多時，我們相信末季盈利的挫跌幅度將相距不遠，且可能引來另一輪強烈的盈利下調。＂
受到勞工成本高企影響，棕油生產成本也上漲5%，不過隨著鮮果串產量走勢平平，整體生產成本料已趨穩。
需求方面，肯納格預計11月棕油出口將按月增長5%至185萬公噸，受惠於中國交易商提昇棕油庫存。供應方面，該行則臆測按月產量走跌6%至182萬公噸。
隨著北半球邁入冬天，預計棕油與大豆油的龐大價差將維持另3個月。由於棕油遇冷後會凝固，因此消費者將喜愛使用大豆油。
種植股發盈利預警
以238萬至248萬公噸庫存計，肯納格將今明2年棕油價，各從每公噸2千975及3千令吉，下調3%至5%，至2千900及2千850令吉。
“今年2千900令吉預估，相等於棕油價下跌了10%，而2013年則料再挫2%至2千850令吉。＂
國內3大種植股已發出盈利可能滑跌的訊號，森那美（SIME，4197，主板貿服組）僅設下32億令吉淨利關鍵表現指標、吉隆坡甲洞（KLK，2445，主板種植組）預期盈利走跌、IOI集團（IOICORP，1961，主板種植組）也指最近幾個月棕油價低企將影響淨利水平。
肯納格以個股計，聯土全球（FGV，5222，主板種植組）及IOI集團面對龐大的樹壓衝擊，因為其種植地趨向成熟階段，平均樹齡各為16.5及13.7年。
怡保種植（IJMPLNT，2216，主板種植組）及陳順風資源（TSH，9059，主板種植組）受沙巴種植地鮮果串產量低企影響。陳順風資源盈利下滑幅度最甚，歸咎於鮮果串產量挫跌7%、棕油價走低及生產成本至少揚升15%。
受到種種利空因素影響，肯納格將種植業評級從“中和＂下調至“減碼＂。（星洲日報／財經）
Ageing oil palm plantations likely to lift CPO price
PETALING JAYA: Anticipation over declining crude palm oil (CPO) production due to ageing plantations in major producing countries including Malaysia, would likely bolster the commodity to hit RM4,000 per tonne by second half of this year, according to industry players.
Malaysian Estate Owners Association president Boon Weng Siew who pegged the country's total planted area with palm trees of over 20 years old to between 30% and 40%, said many of the ageing palm trees in Malaysia were mostly under the smallholders' holdings.
Of the total CPO production, smallholders contributed the bulk at about 52% while the rest was from large plantation companies, according to the National Association of Smallholders.
Despite a RM7,000 per ha grant by the Government for smallholders to carry out replanting activities,
Boon said: “It was difficult to persuade them especially with the CPO price trading above RM2,000 per tonne over the past three to four years.
“What more with the CPO prices currently trading in the region of RM3,300 to RM3,370 per tonne.”
Boon, a veteran planter, said the reluctance to undertake active replanting activities could also be due to the “insufficient” grant to cover the entire replanting costs up to maturity period of about three to four years.
He pointed out that the actual replanting cost up to maturity period should be about RM12,000 per ha given the current high costs of fertiliser and pesticides.
On the country's average yields, Boon said the current national average was about 20.2 tonnes of fresh fruit bunches (FFB), 20% oil extraction rate (OER) and about four tonnes of CPO per ha.
“At the current replanting rate, it is actually difficult to comprehend how Malaysia can achieve its vision for palm oil, i.e. 35 tonnes of FFB, 25% OER and 8.75 tonnes of CPO per ha per year by 2020,” he added.
The Malaysian Palm Oil Board (MPOB) had in early January said eight entry-point projects (EPPs) under the Government's Palm Oil NKEAshowed commendable achievements in meeting the targets set in 2011, the first year of its implementation.
For EPP1 in the upstream sector, the area of backlog cleared by plantations and organised smallholders, achieved 83.2% or 83,200ha last year, compared with 100,000ha in the earlier target.
Areas of new planting and replanting by smallholders reached 74.6% of the total 26,600ha. Of the total application for 37,432.64ha, about 29,995.09ha were approved and verified, said MPOB.
MPOB said oil palm felled and replanted was at 19,768.54ha last year where 8,429ha were for new planting and 11,338.92ha for replanting.
Meanwhile, United Malacca Bhd chief executive officer Dr Leong Tat Thimsaid replanting should be taken seriously given the high ageing profile of oil palm trees especially those over 25 years othat tended to drag the yields lower.
“In well established estates, I believe that replanting accounts for 2% to 5% of total planted area annually,” he said.
Leong estimated that the current replanting cost to maturity for most plantations could range from RM10,000 to RM13,000 per ha.
“Older palm trees are taller thus making harvesting very difficult. What more with local planters currently facing serious shortage of foreign fruit harvesters.”
He opined that the stagnating average yield performance in Malaysia among others was due to the conversion of the “hilly” rubber areas into oil palm plantations some 20 years ago.
Meanwhile, Standard Chartered Bank in its global research report “Crude palm oil - A price storm is brewing” said a severe structural slowdown in palm oil output was under way.
“The downtrend will worsen over the coming seasons with the deceleration in palm output caused largely by the ageing profile of estates in South-East Asia, which accounts for over 90% of the market, as well as sub-optimal farming practices across much of the region.
“Our conservative estimate is that more than 20% of trees in Malaysia are over 25-years-old. In reality, this could be more,” said the report.
Its long-term bullish view on CPO, relatively accommodative global interest rates and a deteriorating age profile of trees in Malaysia, should help to convince planters that replanting decision is best not to be delayed.
“We also believe there is a price storm brewing in the industry due to a deceleration in yields, the severity of which will be bullish for the market,” it added.
StanChart has forecast the annual average CPO price this year at RM3,450 per tonne. It has also revised second quarter (Q2) 2012 CPO price to RM3,500, Q3 at RM3,350 and Q4 at RM3,700 respectively.
As of 5.30pm yesterday, the benchmark third-month CPO futures contract for July was traded at RM3,373 per tonne, up RM13 from RM3,360 per tonne on Monday. - The Star Biz
Wednesday May 9, 2012
Indian log importers return with new orders
KUCHING: India, the No. 1 buyer of Sarawak's tropical logs, has returned with new orders following the recovery of its currency.
Ta Ann Holdings Bhd financial controller Augustine Siaw said Indian log importers slowed down their buying activities in the fourth quarter last year after the rupee depreciated in value.
“They have now come back to buy our logs as the rupee has recovered,” he told StarBiz.
Ta Ann exported 74% of its 2011 export of nearly 148,000 cu m of logs to India.
Sarawak Timber Association's figures revealed that India imported 1.86 million cu m worth RM1.13bil or 60% of Sarawak's total log exports last year.
In 2010, India purchased 2.21 million cu m of Sarawak logs.
Ta Ann reported a 23% increase in average log selling prices last year, compared with 2010 but recorded a 22% drop in export volume due to lower production due to adverse weather conditions.
Meanwhile, Ta Ann and several other Sarawak-based listed timber companies reported a steep increase in their log production volumes in the first quarter this year.
During the Jan-March period, Ta Ann's production rose to 81,040 cu m or more than 12% from 72,284 cu m a year earlier.
Jaya Tiasa Holdings Bhd raised its production volume by more than 45% to 288,828 cu m from 186,222 cu m previously. Sister company Subur Tiasa Holdings Bhd's (Subur) production volume grew by more than 65% to 134,654 cu m in the first quarter from 81,067 cu m in the previous corresponding period.
Both Jaya Tiasa and Subur are under the stable of the diversified Rimbunan Hijau group.
Better weather conditions this year have facilitated log harvesting activities. Sarawak was hit by extreme wet weather in the first quarter last year which hampered logging activities.
In 2011, Sarawak's log production fell below 10 million cu m, to 9.61 million cu m, which was the lowest in more than two decades. In terms of export, the state recorded a 30% drop last year to 3.1 million cu m worth RM1.85bil.
The 2010 and 2009 volumes were 10.15 million cu m and 10.37 million cu m respectively. In 1991, the state logged a record 19 million cu m, and this was gradually reduced and maintained at about 12 million cu m a year in the past 10 years to ensure sustainable forest management. The Star Biz
Wednesday May 9, 2012
Jaya Tiasa vs Ta Ann
Both Jaya Tiasa and Ta Ann started from timber business and later ventured to the oil palm business. Below are the some direct comparison between the two companies.
Based on the planted palm oil area, Jaya Tiasa FFB output will overtake Ta Ann in FY2013 as Jaya Tiasa was more aggressive in planting on last 5 years.
Jaya Tiasa on the way making itself as a mid-size plantation company in next 3 years. And the company also trying to unlock its value through the recent bonus issue plan. Overall, the company can be RM5-6 billion company in 5 years time.
Note:
1. Jaya Tiasa Financial Year was ended at 31 Apr compared to Ta Ann which ended at 31 Dec. Also Jaya Tiasa has planned to changed its financial yead ended from 31 Apr to 30 Jun starting in FY 2012.
2.
Log, Reforestation & Plantation Area
Log & Plywood Division: Production & Sale Figure
Oil Palm Division Output, Revenue & Profit
Jaya Tiasa to raise RM300m from share placement
KUALA LUMPUR: Timber-cum-plantation group Jaya Tiasa Holdings Bhd, controlled by the family of Tan Sri Tiong Hew King, has proposed a new placement of 42.04 million shares or 15% of its issued and paid-up share capital to raise some RM300 million.
In a separate statement yesterday, the company also announced the distribution of 13.35 million treasury shares as share dividends on the basis of one treasury share for every 20 existing shares, and a proposed 2-for-1 bonus issue of new Jaya Tiasa shares.
The proposed placement exercise is expected to raise some RM299.8 million, assuming full subscription at an issue price of RM7.13 per share based on a five-day volume-weighted average market price. Jaya Tiasa closed 19 sen higher to RM7.69 yesterday.
“The proposed placement will enable the Jaya Tiasa group to further strengthen its financial position statement. As at Jan 31, 2012, the group had total borrowings amounting to about RM895.14 million, the majority of which was incurred for capital expenditure and working capital.
“The proposed placement will reduce the gearing of the group thereby providing flexibility for fund raising as and when the opportunity arises. In addition, the repayment of some of the group’s existing borrowings will give rise to interest cost savings,” it said.
Yesterday, Jaya Tiasa also reported a 14.11% rise in its net profit to RM45.52 million or 17.05 sen for 3Q ended Jan 31, compared with RM39.89 million a year ago, as the fall in average selling prices of logs, fresh fruit bunch (FFB) and crude palm oil (CPO) partially mitigated the increase in production.
For 3Q, the group recorded a flat revenue of RM237.56 million against RM237.65 million previously.
For the first nine months of its financial year, the group’s revenue was up by 19.77% to RM737.08 million from RM615.39 million a year ago. Meanwhile, net profit jumped 54.3% to RM142.59 million from RM92.42 million on the back of improved FFB, CPO and plywood sales as well as average selling prices during the longer period.
In a separate note, Jaya Tiasa said its wholly-owned subsidiary, JT Oil Palm Development Sdn Bhd (JTOP) signed an agreement with GenPower Carbon Solutions LP (GPCS), for a biogas clean development mechanism (CDM) project yesterday.
Under the agreement, JTOP will provide a site at the JTOP CPO mill at Pulau Bruit, Sarawak, while GPCS will develop a concrete tank bio-digester system.
GPCS will invest in the equipment to trap and monitor greenhouse gas emissions generated from anaerobic digestion of the effluent. The trapped gas will then be supplied to the mill as clean and renewable fuel for energy generation.
GPCS will undertake the responsibility to qualify the project under CDM requirements and to verify and market the carbon credits.
This article appeared in The Edge Financial Daily, March 23, 2012.
In a separate statement yesterday, the company also announced the distribution of 13.35 million treasury shares as share dividends on the basis of one treasury share for every 20 existing shares, and a proposed 2-for-1 bonus issue of new Jaya Tiasa shares.
The proposed placement exercise is expected to raise some RM299.8 million, assuming full subscription at an issue price of RM7.13 per share based on a five-day volume-weighted average market price. Jaya Tiasa closed 19 sen higher to RM7.69 yesterday.
“The proposed placement will enable the Jaya Tiasa group to further strengthen its financial position statement. As at Jan 31, 2012, the group had total borrowings amounting to about RM895.14 million, the majority of which was incurred for capital expenditure and working capital.
“The proposed placement will reduce the gearing of the group thereby providing flexibility for fund raising as and when the opportunity arises. In addition, the repayment of some of the group’s existing borrowings will give rise to interest cost savings,” it said.
Yesterday, Jaya Tiasa also reported a 14.11% rise in its net profit to RM45.52 million or 17.05 sen for 3Q ended Jan 31, compared with RM39.89 million a year ago, as the fall in average selling prices of logs, fresh fruit bunch (FFB) and crude palm oil (CPO) partially mitigated the increase in production.
For 3Q, the group recorded a flat revenue of RM237.56 million against RM237.65 million previously.
For the first nine months of its financial year, the group’s revenue was up by 19.77% to RM737.08 million from RM615.39 million a year ago. Meanwhile, net profit jumped 54.3% to RM142.59 million from RM92.42 million on the back of improved FFB, CPO and plywood sales as well as average selling prices during the longer period.
In a separate note, Jaya Tiasa said its wholly-owned subsidiary, JT Oil Palm Development Sdn Bhd (JTOP) signed an agreement with GenPower Carbon Solutions LP (GPCS), for a biogas clean development mechanism (CDM) project yesterday.
Under the agreement, JTOP will provide a site at the JTOP CPO mill at Pulau Bruit, Sarawak, while GPCS will develop a concrete tank bio-digester system.
GPCS will invest in the equipment to trap and monitor greenhouse gas emissions generated from anaerobic digestion of the effluent. The trapped gas will then be supplied to the mill as clean and renewable fuel for energy generation.
GPCS will undertake the responsibility to qualify the project under CDM requirements and to verify and market the carbon credits.
This article appeared in The Edge Financial Daily, March 23, 2012.
张晓卿深谙“竞争”原则 强者恒强常青不倒 (大马超级富豪NO.12)
这不仅是一段激励他人迎接未来艰巨挑战时值得深思的话，也可被诠释为，在张晓卿领导下，常青集团从初创期的小公司，经历37年企业竞争，不断创新改革，壮大成今日挤进世界500强企业的心路历程。
在大马南洋富豪榜位居第12位的丹斯里拿督张晓卿，在2012年初集团年宴致词时，说过如此一段话：“严峻的挑战，危机的来临，常常是自我检讨和诊断的机会，也是自我警觉和改变的开始。它不但考验人的能力和智慧，也考验企业的体制和管理。”
把一家小木材公司，慢慢打造成今日涉及多个领域的多元化企业王国，常青集团执行主席张晓卿深懂在“竞争就是生存”原则下，企业必须是强者、是勇者，敢于创新、改变和学习，通过努力争取才有机会强大至如现今的常青集团，可在竞争环境中屹立不倒。
其中以集团两大核心业务——木材和媒体，就得出印证上述道理的企业发展历程。
Industry experts forecast better prices for crude palm oil (CPO) this year in 2012
KUALA LUMPUR: Industry experts have different price forecasts for crude palm oil (CPO) this year, but they all seem to agree that 2012 will be a better year for the commodity than the past two years. Their forecast average prices range from RM3,100 to RM3,610 per tonne. In comparison, CPO was traded at an average of RM3,210 in 2011 and RM2,701 in 2010.
ISTA Mielke GmBH (Oil World) executive director Thomas Mielke said CPO prices would average about RM3,450 per tonne, given that the outlook for palm oil output was going to be moderate this year.
“We expect Malaysia will increase its CPO output by only about 0.4 million tonnes to 19.3 million tonnes, while Indonesia is expected to slow its output by 1.6 million tonnes or less, to 25.5 million tonnes,” he said yesterday during the palm oil price outlook session at the Palm & Lauric Oils Conference & Exhibition Price Outlook 2012 with the theme Global Shocks Local Impact. Mistry expects the price of CPO to hover at between RM3,450 and RM3,600 after June.
Another speaker at the conference, Malaysian Palm Oil Board (MPOB) senior research officer Ramli Abdullah, expects CPO prices to range from RM3,100 to RM3,610 per tonne. He said the prices were usually influenced by economic factors such as soybean oil prices, production and crude palm oil. “The production of palm oil for Malaysia is expected to increase to 19.36 million tonnes this year under normal weather situation and increase in new plantings, matured area and replanting,” he added.
LMC International chairman Dr James Fry said he forecast Malaysia's CPO production to be unchanged from the 2011 total at 18.9 million tonnes and forecast CPO price to be at an average of RM3,250 per tonnes if Brent crude oil trades at US$125 (RM375) per barrel. Rabobank International Asia Head of Food & Agribusiness Research & Advisory John Baker forecast Malaysia's CPO production this year to be 19.2 million tonnes, while price was expected to peak to near RM3,500 per tonne before starting to moderate after the second half of 2012.
Godrej International Ltd director Dorab Mistry believes that Malaysia's CPO production this year would be at the range of between 18.6 million tonnes and 19 million tonnes. “I'm expecting a flat production for Malaysia this year as a result of a low cycle for palm trees,” he said. Malaysia's CPO production in 2011 was 18.9 million tonnes. He expects the price of CPO to hover at between RM3,450 and RM3,600 per tonne after June and that it would decline only after evidence of the low cycle end around November. Touching on the export taxes by the Indonesia, he said Malaysia had effectively asked its refiners to fend for themselves. “Malaysia can opt to adopt a carbon copy of Indonesia's export tax regime and do away completely with the duty-free export quota for CPO. As they say, if you cannot beat them, you join them!” he said. It was reported that Indonesia had last year cut export taxes on refined grades that helped its domestic processors restart their factories and offer discounts to overseas buyers. That turned margins negative for refiners in Malaysia and the Government was looking at ways to keep investments flowing into its RM60bil sector. Malaysia usually charges a high duty on crude palm oil shipments to protect its domestic refining industry. It does not impose any export taxes on processed palm oil. The country has 51 refineries with a combined yearly capacity of 22.9 million tonnes. It is planning new capacity of 9.6 million tonnes
3-Mar-12 The Star Biz
“We expect Malaysia will increase its CPO output by only about 0.4 million tonnes to 19.3 million tonnes, while Indonesia is expected to slow its output by 1.6 million tonnes or less, to 25.5 million tonnes,” he said yesterday during the palm oil price outlook session at the Palm & Lauric Oils Conference & Exhibition Price Outlook 2012 with the theme Global Shocks Local Impact. Mistry expects the price of CPO to hover at between RM3,450 and RM3,600 after June.
Another speaker at the conference, Malaysian Palm Oil Board (MPOB) senior research officer Ramli Abdullah, expects CPO prices to range from RM3,100 to RM3,610 per tonne. He said the prices were usually influenced by economic factors such as soybean oil prices, production and crude palm oil. “The production of palm oil for Malaysia is expected to increase to 19.36 million tonnes this year under normal weather situation and increase in new plantings, matured area and replanting,” he added.
LMC International chairman Dr James Fry said he forecast Malaysia's CPO production to be unchanged from the 2011 total at 18.9 million tonnes and forecast CPO price to be at an average of RM3,250 per tonnes if Brent crude oil trades at US$125 (RM375) per barrel. Rabobank International Asia Head of Food & Agribusiness Research & Advisory John Baker forecast Malaysia's CPO production this year to be 19.2 million tonnes, while price was expected to peak to near RM3,500 per tonne before starting to moderate after the second half of 2012.
Godrej International Ltd director Dorab Mistry believes that Malaysia's CPO production this year would be at the range of between 18.6 million tonnes and 19 million tonnes. “I'm expecting a flat production for Malaysia this year as a result of a low cycle for palm trees,” he said. Malaysia's CPO production in 2011 was 18.9 million tonnes. He expects the price of CPO to hover at between RM3,450 and RM3,600 per tonne after June and that it would decline only after evidence of the low cycle end around November. Touching on the export taxes by the Indonesia, he said Malaysia had effectively asked its refiners to fend for themselves. “Malaysia can opt to adopt a carbon copy of Indonesia's export tax regime and do away completely with the duty-free export quota for CPO. As they say, if you cannot beat them, you join them!” he said. It was reported that Indonesia had last year cut export taxes on refined grades that helped its domestic processors restart their factories and offer discounts to overseas buyers. That turned margins negative for refiners in Malaysia and the Government was looking at ways to keep investments flowing into its RM60bil sector. Malaysia usually charges a high duty on crude palm oil shipments to protect its domestic refining industry. It does not impose any export taxes on processed palm oil. The country has 51 refineries with a combined yearly capacity of 22.9 million tonnes. It is planning new capacity of 9.6 million tonnes
3-Mar-12 The Star Biz
Setting price for plywood
Saturday February 18, 2012 By JACK WONG
KUCHING: Malaysia is coming up with a
“constructed” price for plywood in the wake of its manufacturers being
penalised by South Korean authorities on charges of dumping their panel
products. This proposed price is being worked out by the International Trade and Industry Ministry, together with input from the Sarawak Timber Industry Development Corp (STIDC) and plywood manufacturers.
“As most of the manufactured plywood is for the export market, there is at present no domestic selling price,” Sarawak Timber Association (STA) general manager Dr Peter Kho told StarBizWeek.
The proposed constructed price will be determined based on several factors including the production and transport costs of plywood and will serve as a guide to plywood exporters to check against any dumping charges.
To recap, the Korean Trade Commission (KTC) imposed anti-dumping duties on the imports of Malaysian plywood last March, ranging from 5% to 38% for three years.
Possible solution: Setting the domestic selling price for plywood will hopefully end South Korean charges of dumping. The
imposition of the duties followed KTC's probe into complaints by the
Korean Wood Panel Association that nine Malaysian plywood exporters
eight from Sarawak and one from Sabah were allegedly selling their
products below production costs, thereby hurting many South Korean
plywood manufacturers.
The anti-dumping duties imposed on the eight Sarawak plywood suppliers are between 5.12% and 9.75%. The suppliers include Subur Tiasa Plywood Sdn Bhd (5.12%), Jaya Tiasa Timber Products and Hwa Seng Veneer and Plywood Industry Sdn Bhd (6.43%), Shin Yang Plywood Sdn Bhd , Forescom Plywood Bhd , Menawan Wood Sdn Bhd , Shin Yang Plywood Bintulu Sdn Bhd and Zedtee Plywood Sdn Bhd (the five companies are owned by Shin Yang group) (9.75%). The duties on Sabah-based Sinora Sdn Bhd is the highest at 38.1% while it is 8.76% on all other Malaysian exporters.
The anti-dumping duties on some of the Sarawak suppliers were significantly reduced following their appeals. The duties have adversely affected exports of Sarawak plywood to South Korea, a traditional key market.
“As most of the manufactured plywood is for the export market, there is at present no domestic selling price,” Sarawak Timber Association (STA) general manager Dr Peter Kho told StarBizWeek.
The proposed constructed price will be determined based on several factors including the production and transport costs of plywood and will serve as a guide to plywood exporters to check against any dumping charges.
To recap, the Korean Trade Commission (KTC) imposed anti-dumping duties on the imports of Malaysian plywood last March, ranging from 5% to 38% for three years.
The anti-dumping duties on some of the Sarawak suppliers were significantly reduced following their appeals. The duties have adversely affected exports of Sarawak plywood to South Korea, a traditional key market.
Palm oil exports to rise in 2012
KUALA LUMPUR: Palm oil exports from Malaysia, the world's second largest producer, may climb as much as 10% this year, expanding faster than local output and helping to drive down stockpiles and support prices, an industry group forecast.
Exports may climb to a record 19.8 million tonnes from last year's 18 million tonnes as demand in India and China gained, Malaysian Palm Oil Council chairman Lee Yeow Chor, said in an interview. The price may advance 3.9% to RM3,300 per tonne in 2012, according to Lee.
Declining stockpiles in Malaysia, which have held above 2 million tonnes since September, may help futures extend a 15% rally since October, boosting profits at growers IOI Corp Bhd and Sime Darby Bhd. Credit Suisse Group AG raised its forecast for 2012 prices 28% to RM3,200 on Feb 1, saying supplies will be capped, while demand remains strong.
“The market hasn't completely accounted for the amount of vegetable oil demand that's going to be shifting to palm oil this year,” said Erin FitzPatrick, an analyst at Rabobank International in London. Prices were holding above RM3,000 on prospects for lower global soybean oil and rapeseed oil output, FitzPatrick said by phone on Wednesday.
The April-delivery contract fell as much as 1% to RM3,166 on the Malaysia Derivatives Exchange yesterday before trading at RM3,177 at 11.55am. While the price is little changed this year, it's rallied from a 12-month low of RM2,754 on Oct 6.
Dorab Mistry, director of Godrej International Ltd, has forecast a bull market in palm oil this year as demand growth outstrips the projected increase in production. The price may reach RM4,000 by June, Mistry forecast in December.
Global soybean oil exports may decline to 8.56 million tonnes this year from 9.5 million in 2011, according to a forecast from the US Department of Agriculture. Months of dryness caused by the La Nina weather pattern have parched crops in South America. Palm-oil stockpiles may drop to “healthy levels” from April as shipments from Malaysia rose on growing production after the seasonally low-output months of January and February, Lee said. Global vegetable oil demand may grow by 3% to 5% in 2012, said Lee, who's also executive director at IOI Corp, Malaysia's second largest listed producer.
“If we can reduce the stocks to around 1.7 million tonnes, it will be a very positive development,” said Lee, who forecast an increase in shipments of 5% to 10%. Growing demand from China, India and African countries would offset slowing imports in European countries caused by a reduction in biofuel usage and sustainability issues, he said.
Malaysian output would show “moderate” growth of less than 5% in 2012 after a “significant” increase last year, Lee said.
Output climbed 11% to 18.9 million tonnes in 2011 from 16.99 million tonnes a year earlier, according to data from the Malaysian Palm Oil Board. Production may be 19 million tonnes this year as more plantations mature, Plantation Industries and Commodities Minister Bernard Dompoksaid on Jan 19.
Malaysia was promoting new uses for the tropical oil, which included anti-oxidants such as tocotrienols and phenolics, as well as furniture made from the wood from the oil palm's trunk, said Lee.
Indonesia, the biggest producer, cut the maximum tax rate on crude palm oil exports last October and imposed lower duties on processed products to help the local refining industry.
If the export duty in Indonesia was helping its mid-tier refineries, one strategy for Malaysia was to go further up the so-called value chain, said Lee. “Those are very competitive” products, he said, referring to output such as oleochemicals, food esters and specialty chemicals and fats. - Bloomberg
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Batu Kawan,
BLD Plantation,
IOI,
Jaya Tiasa,
Kim Loong,
KLK,
Kwantas,
Sector News,
Ta Ann,
TSH
Tag :
Jaya Tiasa
Malaysia Oil Palm Plantation Company Estate Profile @ FY2010
Gross(Ha) - Total Gross Plantation Area
Planted(Ha) - Planted Area (ha)
Matured(Ha) -Matured Area(ha)
Immat.(Ha) - Planted but immatured Area (ha)
FFB (MT) - Fresh Fruit Bunches (MT)
MT/Ha - Number of FFB produced in a hectares of matured area
Profit (RM) - Total Net Profit in RM'million
RM/Ha - Net Profit Per Matured Area
No. Shares - Total number of shares of the listed company (in million)
(M)Ha/Lot - Matured Area per 1000 shares
(P)Ha/Lot - Planted Area per 1000 shares
Jaya Tiasa to gain from increasing FFB volume and higher log prices
Posted on December 14, 2011, Wednesday
ROBUST
GROWTH: Photo shows logging activities being undertaken in Sarawak.
Jaya Tiasa’s strategy is to maximise its log exports quota first before
using its own harvested logs for downstream plywood manufacturing.
The capex was mainly for oil palm planting (RM90 million), construction of new crude palm oil (CPO) mill (RM70 million), logging machinery (RM50 million) and forest plantation (RM20 million).
According to RHB Research Institute Sdn Bhd (RHB Research), Jaya Tiasa recorded an average selling price (ASP) for its logs of RM741 per cubic metre (m3) in the first quarter of FY12 (1QFY04/12), an increase of 3.3 per cent quarter-on-quarter.
The high log prices were mainly due to acute shortage in log supply during the early part of 2011, as production was hampered by extremely wet weather condition in Sarawak. Log prices had since eased as log production volume normalised over the past few months.
“Due to lower log prices (we estimate its log prices to average about US$220/m3), we therefore expect Jaya Tiasa to report lower earnings from its log division in its upcoming 2QFY04/12 quarterly results,” RHB Research stated in its research report yesterday.
Jaya Tiasa’s strategy was to maximise its log exports quota first (50 per cent currently) before using its own harvested logs for downstream plywood manufacturing, as margins for logs were higher now compared with plywood. Hence, this was why the capacity utilisation rate of its plywood division remained low at only between 50 per cent and 60 per cent.
Tag :
Company Analysis,
Jaya Tiasa
三大因素 牽動2012棕油價
東方新聞網
隨著原棕油（CPO)價格從10月份的每公噸2787令吉反彈，目前價格已衝破3000令吉大關。黃氏星展唯高達研究預測，原棕油價明年將觸及每公噸4000令吉的新高水平。分析員認為，將有三大元素影響2012年棕油價格前景。
Interview with Group Managing Director : Jaya Tiasa Holdings Bhd
Established in 1960, Jaya Tiasa Holdings Bhd is one of Malaysia’s largest fully integrated timber companies, with activities from extraction and trading of logs, to the manufacturing and export of plywood, veneer and sawn timber. The group’s timber concessions span a vast 713,211ha in Sarawak. In addition, the group also has 141,308ha of replantable reforestation land, of which just over 20% has been planted.
Jaya Tiasa has diversified into oil palm plantations in recent years and currently has a plantable landbank of 70,900ha for oil palm. The group posted net profit of RM151.44 million on revenue of RM870.9 million for the financial year ended April 30, 2011.
Datuk Seri Tiong Chiong Hoo, group managing director, shares with The Edge Financial Daily his strategies and dreams for the company.
TEFD: What are the group’s competitive strengths and advantages?
Tiong: The availability of resources is one of our key strengths. We have a sustainable supply of logs through natural and planted forests, as well as a diversified export market for our timber and timber-related products. Our landbank for the development of oil palm plantations is huge, and we have a favourable age profile of palms. Jaya Tiasa has established products and branding, and enjoys good financial standing.
Another major advantage is the strategic location of our facilities. Our timber processing factories are within the vicinity of the concession areas as well as the seaport, providing ease of export. Our existing and future palm oil mills are located within the estates, saving us on transport costs.
What have been the major achievements of the company in the past four years?
A significant achievement for the group is its diversification into oil palm, where we have a plantable area of 70,900ha. As at April 30, 2011, we have planted a total area of 55,017ha, of which 25,058ha have matured. Fresh fruit bunch (FFB) production increased significantly by 96% to 358,798 tonnes from the preceding financial year.
The group’s first palm oil mill commenced operation in 2009 with an initial processing capacity of 45 tonnes per hour of FFB. The mill is currently under expansion to increase the FFB processing capacity to 90 tonnes per hour to support the higher crop levels.
Another achievement is the success of our market diversification strategy. With our logs and wood-based products exported to over 10 countries, we are one of the most diversified, in terms of export sales markets, among Malaysian timber companies. The wood division has also obtained a number of certificates.
What are the major challenges your company has faced over the years and how did it overcome them? Is there anything you would have done differently?
The economic crisis in 2008/09 negatively affected demand and prices of timber and timber-based products. In addition, the volatility of foreign exchange rates, rising costs due to the hike in crude oil prices, inconsistent supply of logs due to unpredictable weather conditions and labour shortages were among the many challenges we have faced over the years.
To overcome these challenges, we focused on increasing sales of products in the higher price segments where margins are better. We also adjusted our inventories to the lower levels of demand by cutting back or temporarily suspending production.
Jaya Tiasa has diversified into oil palm plantations in recent years and currently has a plantable landbank of 70,900ha for oil palm. The group posted net profit of RM151.44 million on revenue of RM870.9 million for the financial year ended April 30, 2011.
Datuk Seri Tiong Chiong Hoo, group managing director, shares with The Edge Financial Daily his strategies and dreams for the company.
TEFD: What are the group’s competitive strengths and advantages?
Tiong: The availability of resources is one of our key strengths. We have a sustainable supply of logs through natural and planted forests, as well as a diversified export market for our timber and timber-related products. Our landbank for the development of oil palm plantations is huge, and we have a favourable age profile of palms. Jaya Tiasa has established products and branding, and enjoys good financial standing.
Another major advantage is the strategic location of our facilities. Our timber processing factories are within the vicinity of the concession areas as well as the seaport, providing ease of export. Our existing and future palm oil mills are located within the estates, saving us on transport costs.
What have been the major achievements of the company in the past four years?
A significant achievement for the group is its diversification into oil palm, where we have a plantable area of 70,900ha. As at April 30, 2011, we have planted a total area of 55,017ha, of which 25,058ha have matured. Fresh fruit bunch (FFB) production increased significantly by 96% to 358,798 tonnes from the preceding financial year.
The group’s first palm oil mill commenced operation in 2009 with an initial processing capacity of 45 tonnes per hour of FFB. The mill is currently under expansion to increase the FFB processing capacity to 90 tonnes per hour to support the higher crop levels.
Another achievement is the success of our market diversification strategy. With our logs and wood-based products exported to over 10 countries, we are one of the most diversified, in terms of export sales markets, among Malaysian timber companies. The wood division has also obtained a number of certificates.
What are the major challenges your company has faced over the years and how did it overcome them? Is there anything you would have done differently?
The economic crisis in 2008/09 negatively affected demand and prices of timber and timber-based products. In addition, the volatility of foreign exchange rates, rising costs due to the hike in crude oil prices, inconsistent supply of logs due to unpredictable weather conditions and labour shortages were among the many challenges we have faced over the years.
To overcome these challenges, we focused on increasing sales of products in the higher price segments where margins are better. We also adjusted our inventories to the lower levels of demand by cutting back or temporarily suspending production.
Tag :
Company Analysis,
Jaya Tiasa
Malaysia's timber industry makes a comeback
THE timber industry is making a comeback, according to a research firm.
AmResearch Sdn Bhd has initiated a coverage on the sector with an "overweight" call and noted that the sector had seen price recovery.
Quoting industry sources, AmResearch said Malaysian timber had survived the onslaught of global economic malaise, mainly due to rising demand from India and China over the past few years.
"True to available data, timber traders tell us that rising demand from India for tropical logs has hugely supported the Malaysian timber industry, as Japan continues to be in the economic doldrums.
"These sources even say that the industry owes its survival in recent years to the insatiable demand from India and China, and now Vietnam too, thereby to a certain extent supporting prices during the most recent global economic crisis," the firm said in a report released yesterday.
Based on the International Tropical Timber Organisation's (ITTO) latest data from Japan, Meranti regular log exports in Sarawak were exported at a high of US$245 (RM747.25) per cubic metre as at end-2010, up 27 per cent from the early part of the year.
The local plywood industry, meanwhile, was nearly gutted in 2009 as housing starts in Japan, the world's single largest importer of tropical plywood, plummeted 28 per cent to its lowest level in four decades, while plywood import volume fell over 20 per cent.
Of the local timber stocks, AmResearch has recommended a "buy" on Jaya Tiasa Holdings Bhd and a "hold" for TA Ann Holdings Bhd.
It rated Jaya Tiasa with a fair value of RM6 per share, based on a target price estimate of 15 times and an estimate price per share of 40 sen for the year ending 2011.
"The fair value offers a 20 per cent upside over its last traded price of RM4.98. Our stance is premised on its rapidly changing earnings profile and high-octane growth in the oil palm business."
For TA Ann, the research house puts a fair value of RM5.61 per share.
AmResearch said the two companies are reaping the fruit of their venture into oil palm about a decade ago.
"Crude palm oil is now trading at between RM3,900 and RM4,000 per tonne versus an average of RM 2,700 per tonne last year. Their rapid growth in oil palm has simply become too significant to ignore.
"For the two companies, a reclassification from the industrial products sector to plantation appears to be inevitable perhaps within the next three years. This will increase their profile among investors," it added.
Read more: Malaysia's timber industry makes a comeback http://www.btimes.com.my/Current_News/BTIMES/articles/jrtimber/Article/#ixzz1E0Vn2Lz3
AmResearch Sdn Bhd has initiated a coverage on the sector with an "overweight" call and noted that the sector had seen price recovery.
Quoting industry sources, AmResearch said Malaysian timber had survived the onslaught of global economic malaise, mainly due to rising demand from India and China over the past few years.
"True to available data, timber traders tell us that rising demand from India for tropical logs has hugely supported the Malaysian timber industry, as Japan continues to be in the economic doldrums.
"These sources even say that the industry owes its survival in recent years to the insatiable demand from India and China, and now Vietnam too, thereby to a certain extent supporting prices during the most recent global economic crisis," the firm said in a report released yesterday.
Based on the International Tropical Timber Organisation's (ITTO) latest data from Japan, Meranti regular log exports in Sarawak were exported at a high of US$245 (RM747.25) per cubic metre as at end-2010, up 27 per cent from the early part of the year.
The local plywood industry, meanwhile, was nearly gutted in 2009 as housing starts in Japan, the world's single largest importer of tropical plywood, plummeted 28 per cent to its lowest level in four decades, while plywood import volume fell over 20 per cent.
Of the local timber stocks, AmResearch has recommended a "buy" on Jaya Tiasa Holdings Bhd and a "hold" for TA Ann Holdings Bhd.
It rated Jaya Tiasa with a fair value of RM6 per share, based on a target price estimate of 15 times and an estimate price per share of 40 sen for the year ending 2011.
"The fair value offers a 20 per cent upside over its last traded price of RM4.98. Our stance is premised on its rapidly changing earnings profile and high-octane growth in the oil palm business."
For TA Ann, the research house puts a fair value of RM5.61 per share.
AmResearch said the two companies are reaping the fruit of their venture into oil palm about a decade ago.
"Crude palm oil is now trading at between RM3,900 and RM4,000 per tonne versus an average of RM 2,700 per tonne last year. Their rapid growth in oil palm has simply become too significant to ignore.
"For the two companies, a reclassification from the industrial products sector to plantation appears to be inevitable perhaps within the next three years. This will increase their profile among investors," it added.
Read more: Malaysia's timber industry makes a comeback http://www.btimes.com.my/Current_News/BTIMES/articles/jrtimber/Article/#ixzz1E0Vn2Lz3
Tag :
Jaya Tiasa,
Ta Ann
价格复苏前景看俏 木材领域获增持评级
2011/02/15 11:16:07 AM
●南洋商报 报道：沈素蕾
（吉隆坡14日讯）木材价复苏，加上本地两大挂牌木材公司随业务架构转型而业绩前景良好，木材领域进而备受看好，获分析员给予“增持”评级。
据大马研究分析员，受全球经济打击之后，木材领域如今已处在复苏阶段。
其中，胶合板（plywood）价格近几周已从2009年的每立方米350美元，回弹至485美元，梅兰蒂木（Meranti）一般原木价格则从每立方米120至130美元，增加至每立方米290美元。
常成大安业务转型
在木材业好转之际，常成控股（JTiasa，4383，主板工业产品股）和大安（TaAnn，5012，主板工业产品股）的业务架构也开始转型，因两者的种植业务将带来主要的业绩贡献。
他说：“这两家公司在大约10年前所进军的油棕业，已开始取得成果。”
●南洋商报 报道：沈素蕾
（吉隆坡14日讯）木材价复苏，加上本地两大挂牌木材公司随业务架构转型而业绩前景良好，木材领域进而备受看好，获分析员给予“增持”评级。
据大马研究分析员，受全球经济打击之后，木材领域如今已处在复苏阶段。
其中，胶合板（plywood）价格近几周已从2009年的每立方米350美元，回弹至485美元，梅兰蒂木（Meranti）一般原木价格则从每立方米120至130美元，增加至每立方米290美元。
常成大安业务转型
在木材业好转之际，常成控股（JTiasa，4383，主板工业产品股）和大安（TaAnn，5012，主板工业产品股）的业务架构也开始转型，因两者的种植业务将带来主要的业绩贡献。
他说：“这两家公司在大约10年前所进军的油棕业，已开始取得成果。”
Tag :
Jaya Tiasa,
Ta Ann
Sarawak timber players bullish on strong prices
By JACK WONG
jackwong@thestar.com.my
PROLONGED shortages in log supply will be a boon for Sarawak timber players, which are expecting higher prices this year.
Jaya Tiasa Holdings Bhd expects log supply to remain tight due to bad weather which has adversely affected logging operations.
Log production is low between December and February as logging camps take a 10-day break each for the Christmas, New Year and the Chinese Lunar New Year celebrations. Log production was significantly lower last year compared with 2009.
“We had not expected so much rain last year but hopefully, the weather will improve this year,” managing director Datuk Peter Yong told StarBizWeek recently.
The impoundment of the Bakun hydroelectric dam in upper Rejang River basin in central Sarawak since last October has also hampered the transportation of logs as some of the logging roads are flooded, says Yong.
The affected concessions have an estimated monthly production of between 20,000 and 30,000 cu m of logs. Log prices had soared by 30% for certain species last year due to a shortfall.
“I believe log prices will stay at the current high levels and remain stable this year,” adds Yong.
Sarawak's largest plywood supplier Shin Yang Group executive director (wood based) Wong Kai Song concurs that log shortage will lead to higher plywood prices this year.
“Strong demand for tropical plywood following the recovery in traditional export markets like Japan, South Korea and Taiwan will push up prices as many processing mills are hit by an acute shortage of raw materials,” he adds.
Wong who is also Sarawak Timber Association (STA) panel products committee chairman predicts a 15% upside in plywood prices this year compared with over 10% increase in prices last year.
“Plywood prices are trending upwards and I expect 2011 will be a better year for the Sarawak plywood industry players,” he says.
As the log supply situation is not expected to improve, Wong expects local mills to achieve an average of between 70% and 80% of their full capacity in 2011.
With several new mills coming onstream last year, the number of plywood mills in Sarawak has increased to 35, with a combined installed capacity of more than four million cu m a year.
Wong says some plywood mills are importing raw materials (soft wood) from Australia and New Zealand but the volume is less than 5% of Sarawak's total requirements.
The average price of concrete panels is US$420 per cu m compared with between US$350 and US$370 per cu m in 2009 when the prices were at historical lows.
There are many outstanding orders from traditional buyers in Japan, South Korea and Taiwan.
Wong says the inventories in Japan are at a very low level now. At theit height, the inventories are about six months of the supply.
Statistics for the first 11 months of last year showed that Japan imported nearly 1.15 million cu m of panel products worth RM1.7bil or close to 50% of Sarawak's total exports of 2.51 million cu m (RM3.43bil).
South Korea is the second biggest importer, consuming 465,000 cu m valued at RM515mil while Taiwan imported 273,000 cu m worth RM341mil from Sarawak during the same period.
Apart from the shortfall in log supply, Wong says most plywood mills are hit by labour shortage due to the low wages and long working hours.
“Most foreign workers prefer to work in the plantations which pay them higher wages,” Wong adds.
Statistics show that Sarawak produces 9.27 million cu m of logs during the first 11 months last year compared with nearly 10.4 million cu m for the whole of 2009.
Sarawak government allows only 40% of the log production to be exported while the remaining is reserved for the local processing mills.
During the January to November 2010 period, Sarawak exported 3.68 million cu m of logs worth nearly RM1.82bil. India was the biggest buyer, taking 2.05 million cu m (valued at RM1.08bil) or 55% of the state's total exports.
This was followed by China importing 547,000 cu m worth over RM234mil and Taiwan paid about RM216mil for 452,000 cu m. Other major importers were Japan, Vietnam and South Korea.
On issues facing the logging industry, he says the rising diesel prices have contributed to higher production cos
jackwong@thestar.com.my
PROLONGED shortages in log supply will be a boon for Sarawak timber players, which are expecting higher prices this year.
Jaya Tiasa Holdings Bhd expects log supply to remain tight due to bad weather which has adversely affected logging operations.
Log production is low between December and February as logging camps take a 10-day break each for the Christmas, New Year and the Chinese Lunar New Year celebrations. Log production was significantly lower last year compared with 2009.
“We had not expected so much rain last year but hopefully, the weather will improve this year,” managing director Datuk Peter Yong told StarBizWeek recently.
The impoundment of the Bakun hydroelectric dam in upper Rejang River basin in central Sarawak since last October has also hampered the transportation of logs as some of the logging roads are flooded, says Yong.
The affected concessions have an estimated monthly production of between 20,000 and 30,000 cu m of logs. Log prices had soared by 30% for certain species last year due to a shortfall.
“I believe log prices will stay at the current high levels and remain stable this year,” adds Yong.
Sarawak's largest plywood supplier Shin Yang Group executive director (wood based) Wong Kai Song concurs that log shortage will lead to higher plywood prices this year.
“Strong demand for tropical plywood following the recovery in traditional export markets like Japan, South Korea and Taiwan will push up prices as many processing mills are hit by an acute shortage of raw materials,” he adds.
Wong who is also Sarawak Timber Association (STA) panel products committee chairman predicts a 15% upside in plywood prices this year compared with over 10% increase in prices last year.
“Plywood prices are trending upwards and I expect 2011 will be a better year for the Sarawak plywood industry players,” he says.
As the log supply situation is not expected to improve, Wong expects local mills to achieve an average of between 70% and 80% of their full capacity in 2011.
With several new mills coming onstream last year, the number of plywood mills in Sarawak has increased to 35, with a combined installed capacity of more than four million cu m a year.
Wong says some plywood mills are importing raw materials (soft wood) from Australia and New Zealand but the volume is less than 5% of Sarawak's total requirements.
The average price of concrete panels is US$420 per cu m compared with between US$350 and US$370 per cu m in 2009 when the prices were at historical lows.
There are many outstanding orders from traditional buyers in Japan, South Korea and Taiwan.
Wong says the inventories in Japan are at a very low level now. At theit height, the inventories are about six months of the supply.
Statistics for the first 11 months of last year showed that Japan imported nearly 1.15 million cu m of panel products worth RM1.7bil or close to 50% of Sarawak's total exports of 2.51 million cu m (RM3.43bil).
South Korea is the second biggest importer, consuming 465,000 cu m valued at RM515mil while Taiwan imported 273,000 cu m worth RM341mil from Sarawak during the same period.
Apart from the shortfall in log supply, Wong says most plywood mills are hit by labour shortage due to the low wages and long working hours.
“Most foreign workers prefer to work in the plantations which pay them higher wages,” Wong adds.
Statistics show that Sarawak produces 9.27 million cu m of logs during the first 11 months last year compared with nearly 10.4 million cu m for the whole of 2009.
Sarawak government allows only 40% of the log production to be exported while the remaining is reserved for the local processing mills.
During the January to November 2010 period, Sarawak exported 3.68 million cu m of logs worth nearly RM1.82bil. India was the biggest buyer, taking 2.05 million cu m (valued at RM1.08bil) or 55% of the state's total exports.
This was followed by China importing 547,000 cu m worth over RM234mil and Taiwan paid about RM216mil for 452,000 cu m. Other major importers were Japan, Vietnam and South Korea.
On issues facing the logging industry, he says the rising diesel prices have contributed to higher production cos
Tag :
Jaya Tiasa
Tight log supply situation in S’wak to persist in 2011
Posted on January 1, 2011, Saturday
KUCHING: The tight log supply situation in Sarawak is likely to continue for a few more months this year due to seasonal factors before log production starts to normalise. The price of tropical logs had performed very well in 2010, partly due to this situation.
Nevertheless, tropical log prices would remain firm even when log production starts to pick up due to the huge and robust demand from India and China, said RHB Research Institute Sdn Bhd (RHB Research) in its recent research report.
Other than that, another year extension of the 50 per cent log export quota was likely to be granted to the timber players once the current extension expires in the first half of this year, as the Sarawak Forestry Department continued to remain supportive of the timber industry, in view of the current low utilisation rate of the plywood division for most timber players.
Prices for tropical plywood had also performed quite well in 2010, rising by between eight per cent and 14 per cent year-to-date on the back of steady import demand from Japan which was up by 12.1 per cent year-on-year (y-o-y) for the January-October 2010 period.
Going into 2011, selling prices and demand for plywood were expected to remain firm, underpinned by improving housing starts in Japan. Hence, industry capacity utilisation rates were likely to remain stable at between 60 per cent and 70 per cent, as timber players were not eager to increase their plywood production volume until demand is on a more stable track.
RHB Research shared its view that the improved and stable outlook for plywood would keep the plywood division of timber players at a profitable level in 2011 unlike previous years, when losses were incurred due to stagnating plywood prices.
To recap, the latest October 2010 Japan housing starts growth of 6.4 per cent y-o-y was the fifth consecutive y-o-y rise following the previous 17.7 per cent and 20.4 per cent y-o-y growth recorded in September and August respectively. This was supported by the number of building permits issued, which was 3.4 per cent higher y-o-y in October 2010.
Going forward, RHB Research expected further improvement in Japan’s housing would start to boost the overall demand and sentiment for the timber sector. However, timber players had to increase selling prices in order to compensate for foreign exchange losses.
RHB Research’s economic team pointed out that the ringgit vs US dollar exchange rate would likely strengthen between RM3 and RM3.10 this year.
While the strengthening of the ringgit would affect timber companies’ US-based revenues, it believed the current rising price trend for both logs and plywood would partially compensate for the exchange rate movement.
For 2011 and 2012, the team projected log and plywood prices to increase between three and six per cent per annum in US dollar terms, but to increase by only between two per cent and five per cent per annum in ringgit terms.
Based on the analysis done by the team, WTK Holdings Bhd was the most sensitive to US dollar price movements, where every five sen/US dollar change in exchange would change earnings by between 11 per cent and 13 per cent, while Evergreen Fibreboard Bhd was the least sensitive, where every five sen/US dollar change would only change earnings by between one per cent and two per cent.
The research house remained positive on Ta Ann Holdings Bhd and Jaya Tiasa Holdings Bhd, as both companies had significant oil palm plantations that were similar to mid sized plantation companies.
The rising crude palm oil price trend, coming in at a time when fresh fruit bunch production for both companies were set to rise significantly over the next few years would provide a major boost and change to their earnings profile from 2011 onwards.
Among the risks stated on the report were the lower than expected improvement in Japan’s housing starts and the price discounting from neighbouring countries with lower cost of production, resulting in lower exports from Malaysia to its major export markets.
KUCHING: The tight log supply situation in Sarawak is likely to continue for a few more months this year due to seasonal factors before log production starts to normalise. The price of tropical logs had performed very well in 2010, partly due to this situation.
Nevertheless, tropical log prices would remain firm even when log production starts to pick up due to the huge and robust demand from India and China, said RHB Research Institute Sdn Bhd (RHB Research) in its recent research report.
Other than that, another year extension of the 50 per cent log export quota was likely to be granted to the timber players once the current extension expires in the first half of this year, as the Sarawak Forestry Department continued to remain supportive of the timber industry, in view of the current low utilisation rate of the plywood division for most timber players.
Prices for tropical plywood had also performed quite well in 2010, rising by between eight per cent and 14 per cent year-to-date on the back of steady import demand from Japan which was up by 12.1 per cent year-on-year (y-o-y) for the January-October 2010 period.
Going into 2011, selling prices and demand for plywood were expected to remain firm, underpinned by improving housing starts in Japan. Hence, industry capacity utilisation rates were likely to remain stable at between 60 per cent and 70 per cent, as timber players were not eager to increase their plywood production volume until demand is on a more stable track.
RHB Research shared its view that the improved and stable outlook for plywood would keep the plywood division of timber players at a profitable level in 2011 unlike previous years, when losses were incurred due to stagnating plywood prices.
To recap, the latest October 2010 Japan housing starts growth of 6.4 per cent y-o-y was the fifth consecutive y-o-y rise following the previous 17.7 per cent and 20.4 per cent y-o-y growth recorded in September and August respectively. This was supported by the number of building permits issued, which was 3.4 per cent higher y-o-y in October 2010.
Going forward, RHB Research expected further improvement in Japan’s housing would start to boost the overall demand and sentiment for the timber sector. However, timber players had to increase selling prices in order to compensate for foreign exchange losses.
RHB Research’s economic team pointed out that the ringgit vs US dollar exchange rate would likely strengthen between RM3 and RM3.10 this year.
While the strengthening of the ringgit would affect timber companies’ US-based revenues, it believed the current rising price trend for both logs and plywood would partially compensate for the exchange rate movement.
For 2011 and 2012, the team projected log and plywood prices to increase between three and six per cent per annum in US dollar terms, but to increase by only between two per cent and five per cent per annum in ringgit terms.
Based on the analysis done by the team, WTK Holdings Bhd was the most sensitive to US dollar price movements, where every five sen/US dollar change in exchange would change earnings by between 11 per cent and 13 per cent, while Evergreen Fibreboard Bhd was the least sensitive, where every five sen/US dollar change would only change earnings by between one per cent and two per cent.
The research house remained positive on Ta Ann Holdings Bhd and Jaya Tiasa Holdings Bhd, as both companies had significant oil palm plantations that were similar to mid sized plantation companies.
The rising crude palm oil price trend, coming in at a time when fresh fruit bunch production for both companies were set to rise significantly over the next few years would provide a major boost and change to their earnings profile from 2011 onwards.
Among the risks stated on the report were the lower than expected improvement in Japan’s housing starts and the price discounting from neighbouring countries with lower cost of production, resulting in lower exports from Malaysia to its major export markets.
Tag :
Jaya Tiasa,
Ta Ann
Jaya Tiasa invests RM173m in oil palm unit
ANOTHER Sarawak timber and oil palm company has invested heavily in the oil palm industry.Public listed Jaya Tiasa had for its financial year ended April 30, 2009 spent RM173 million to further improve its oil palm division.Its chairman Gen(Rtd) Tan Sri Abdul Rahman Abdul Hamid said the group now had a land bank of 83,483 hectares, of which 68,483 was estimated to be arable."Our total planted area has increased by 26 per cent to 43,558 hectares from the 34,531 previously.
"Of this, approximately 17 per cent or 7,595 hectares are mature oil palm," he said in his report to the group annual general meeting here tomorrow.He said for the year under review, the oil palm division had recorded RM44 million or a 20 per cent increase in revenue from the sale of fresh fruit bunches (FFB).This is despite the highly volatile crude palm oil (CPO) price movement and challenging market conditions.He also disclosed that the division's share of contribution to the group profit before tax had increased from 28 to 53 per cent."Our FFB production is projected to increase further over the next few years from additional areas coming into maturity and a higher yield expected from the palm trees at their more productive age,"he explained.Abdul Rahman highlighted that the group now had its first CPO mill in Pulau Bruit in the Sarikei Division."Completed in March this year, it is strategically located to keep logistics costs low and facilitate timely delivery."It can process 45 metric tonnes of FFB per hour but is expandable to 90 metric tonnes, in anticipation of higher and better harvests in future from the surrounding plantations of the group," he said.For the year under review, Abdul Rahman said group revenue decreased from RM794 million in the previous year to RM757 million -- a five per cent reduction."Lower selling prices together with higher operating costs led to an erosion in group profit after tax to RM14.6 million from the RM52.5 million attained the preceding year."As a result, earnings per share was down to 5.20 sen, while net tangible assets per share stood at RM3.80," he said.He said an overview of the current financial position highlighted that the group had applied a balanced mix of equity and long term debt capital to finance a total assets base of above RM2 billion.Touching on the group's reforestation activity, he said it was currently developing three licensed forest plantations, over a total land area of 235,859 hectares in the Kapit Division."To date, we have planted 26,007 hectares, with the average survival rate of the seedlings at 90 per cent."The main species planted are Eucalyptus Deglupta, Eucalyptus Pellita and Kelampayan," he said.On its plywood division, Abdul Rahman said the financial year 2009 had been a challenging one with demand falling in response to weakening global economic conditions. He said the group sales volume was 14 per cent lower than that attained in the previous financial year."But on a brighter note, two of our subsidiaries have renewed the prestigious Japan Agricultural Standard Certification awards, paving the way for a consolidation of the premium position in the Japanese market."In addition, we are pleased to highlight that the group plywood division had on October 30, 2008, successfully obtained the California Air Resources Board(CARB) certificate," he added.He said this meant it had complied with the formaldehyde emission limit as stipulated in the California Code of Regulations."This will give us a competitive edge in the United States market and allow us to export a higher volume to North America," he added.Abdul Rahman said the logging divison, despite facing a very challenging operating condition, had continued to perform well by contributing to a total revenue increase of four per cent although total log production was 11 per cent below that of the previous year.On the group's future outlook, he said it believed that the significant stimulus packages announced by many major countries, would provide some form of support for commodities including wood products.According to Abdul Rahman, the general outlook for the timber industry remained a challenging one, as consumer sentiment was affected by the existing economic uncertainty."We expect a much slower pace in revival of demand and pricing for plywood based on the severity of the existing economic turmoil in Japan, the main global market."However, log prices should remain resilient due to limited supply," he said.For oil palm, he said CPO prices were expected to stabilise at a reasonable level due to factors such as the positive growth in palm oil consumption in China and India, the better acceptance of palm oil and rising demand from the renewable energy sector."With this in mind, we are optimistic of a favourable outlook for the palm oil industry in the long term," Abdul Rahman said. -Bernama
Published: 2009/09/29
"Of this, approximately 17 per cent or 7,595 hectares are mature oil palm," he said in his report to the group annual general meeting here tomorrow.He said for the year under review, the oil palm division had recorded RM44 million or a 20 per cent increase in revenue from the sale of fresh fruit bunches (FFB).This is despite the highly volatile crude palm oil (CPO) price movement and challenging market conditions.He also disclosed that the division's share of contribution to the group profit before tax had increased from 28 to 53 per cent."Our FFB production is projected to increase further over the next few years from additional areas coming into maturity and a higher yield expected from the palm trees at their more productive age,"he explained.Abdul Rahman highlighted that the group now had its first CPO mill in Pulau Bruit in the Sarikei Division."Completed in March this year, it is strategically located to keep logistics costs low and facilitate timely delivery."It can process 45 metric tonnes of FFB per hour but is expandable to 90 metric tonnes, in anticipation of higher and better harvests in future from the surrounding plantations of the group," he said.For the year under review, Abdul Rahman said group revenue decreased from RM794 million in the previous year to RM757 million -- a five per cent reduction."Lower selling prices together with higher operating costs led to an erosion in group profit after tax to RM14.6 million from the RM52.5 million attained the preceding year."As a result, earnings per share was down to 5.20 sen, while net tangible assets per share stood at RM3.80," he said.He said an overview of the current financial position highlighted that the group had applied a balanced mix of equity and long term debt capital to finance a total assets base of above RM2 billion.Touching on the group's reforestation activity, he said it was currently developing three licensed forest plantations, over a total land area of 235,859 hectares in the Kapit Division."To date, we have planted 26,007 hectares, with the average survival rate of the seedlings at 90 per cent."The main species planted are Eucalyptus Deglupta, Eucalyptus Pellita and Kelampayan," he said.On its plywood division, Abdul Rahman said the financial year 2009 had been a challenging one with demand falling in response to weakening global economic conditions. He said the group sales volume was 14 per cent lower than that attained in the previous financial year."But on a brighter note, two of our subsidiaries have renewed the prestigious Japan Agricultural Standard Certification awards, paving the way for a consolidation of the premium position in the Japanese market."In addition, we are pleased to highlight that the group plywood division had on October 30, 2008, successfully obtained the California Air Resources Board(CARB) certificate," he added.He said this meant it had complied with the formaldehyde emission limit as stipulated in the California Code of Regulations."This will give us a competitive edge in the United States market and allow us to export a higher volume to North America," he added.Abdul Rahman said the logging divison, despite facing a very challenging operating condition, had continued to perform well by contributing to a total revenue increase of four per cent although total log production was 11 per cent below that of the previous year.On the group's future outlook, he said it believed that the significant stimulus packages announced by many major countries, would provide some form of support for commodities including wood products.According to Abdul Rahman, the general outlook for the timber industry remained a challenging one, as consumer sentiment was affected by the existing economic uncertainty."We expect a much slower pace in revival of demand and pricing for plywood based on the severity of the existing economic turmoil in Japan, the main global market."However, log prices should remain resilient due to limited supply," he said.For oil palm, he said CPO prices were expected to stabilise at a reasonable level due to factors such as the positive growth in palm oil consumption in China and India, the better acceptance of palm oil and rising demand from the renewable energy sector."With this in mind, we are optimistic of a favourable outlook for the palm oil industry in the long term," Abdul Rahman said. -Bernama
Published: 2009/09/29
Tag :
Jaya Tiasa
