Showing posts with label Sarawak Oil Palm. Show all posts
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
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
SOP’s home ground advantage to propel growth
PROPELLING GROWTH: SOP enjoys home ground advantage in securing more plantation land in Sarawak as the state has another one million hectares of land earmarked for development.
KUCHING: Malaysia’s seventh largest listed plantation company (by planted area), Sarawak Oil Palms Bhd (SOP) is diversifying into downstream manufacturing to capture refining margins and diversify its earnings base from just a pure upstream player.
According to Maybank Investment Bank Bhd (Maybank IB) senior analyst Ong Chee Ting, SOP registered figures to make heads turn. The company accelerated its new planting programme over the last five years by doubling planted oil palm estates from 29,982 hectares (ha) to 58,940ha.
Given the aggressive new planting in recent years and an average age profile at 7.5 years, 25,063ha of its planted oil palm estates was immature while 20,003ha is young matured. “Such a young profile promises explosive production growth in the immediate and medium term,” Ong pointed out.
Oil palm tress grown on peat lands were generally perceived to generate poorer yield. However, SOP had proven otherwise given approximately 65 per cent of its planted area is on peat soil. The research firm believed SOP’s average fresh fruit bunch (FFB) yield of 19.9 tonne per ha per year was commendable as the average tree age profile is merely 7.5 years.
In fact, it was yielding just as good as some players who had peaked in terms of age profile, it added.
As at June 2011, SOP had planted close to 62,000 ha of oil palm estates. It had another 2,000ha to 3,000ha of plantable reserves. “Yet, we believe SOP had the ability to source for new sizeable landbank for its expansion. Its track record speaks for its ability to secure new landbank as it has, over the last decade, acquired 35,854 ha of greenfield land to ensure constant supply of land to meet its expansion target,” said Ong.
Internally, SOP planned to continue its aggressive land banking strategy. It strategically timed its milling capacity expansion in line with its FFB production growth, which was vital to avoid excessive unutilised capacity.
With three new mills built and capacity expanded on one mill during the past five years, SOP managed to sustain 70 per cent average utilisation rate. The company currently has four palm oil mills in Sarawak with a combined annual capacity of 1.7 million tonnes, Maybank IB estimated.“In addition to that, a new 60 tonne per hour mill in Bintulu is expected to be completed by the first half of 2012. Meanwhile, the construction for another 90 tonne per hour mill will begin during the second half of 2011.”
SOP’s oil palm estates were mainly located along the main ‘Trans Borneo Highway’ link from Miri to Bintulu and Mukah to Bintulu, and the coastline. The geographical advantage enabled convenient access to infrastructure, cost savings from lower transportation cost as well as efficient estates management.
Presently, 100 per cent of SOP’s estates are located in Sarawak given the vast amount of opportunities there and its relatively cheaper entry as greenfield land prices in Peninsular Malaysia and Sabah had exceeded RM10,000 per ha. Sarawak, on the other hand, still offers reasonable prices of RM6,000 to RM8,000 per ha.
“With the vast landbank available in Sarawak and government’s efforts to spur agricultural development in the state, areas planted with oil palm in Sarawak has grown by a 10-year compounded annual growth rate (CAGR) of 11 per cent,” Ong pointed out. “This is the highest when compared with the Peninsular, Sabah and also Indonesia over the last 10 years.”
Maybank IB also stated that the pace of growth was expected to sustain over the next decade as the state government had vowed to double the oil palm planted area in the state to two million ha by year 2020. It pointed out that the majority of the land is Native Customary Rights (NCR) land.
On the other hand, the research firm gathered that SOP was the largest listed joint venture (JV) entity, in terms of landbank, with the state government via Pelita. Besides Pelita’s 29 per cent direct interest in the company, it also had one direct joint venture with SOP on NCR scheme.
Given rising greenfield land prices in Sarawak, SOP embarked on a JV strategy with landowners to avoid huge upfront cash for land acquisition. As with any JVs, SOP came up with cash for the development expenditure till maturity whereas the landowner contributed the land. SOP typically ends up with a 60 per cent to 85 per cent of equity stake.
“We believe such a JV structure will be acceptable by the natives as they get to share future income with the operators as opposed to a one-time pay off for the land. Hence, we see further potential for SOP to increase its landbank with its strong track records, financial capability and the strong corporate standing of its major shareholders in Sarawak,” Ong revealed.
On the financial front, SOP planned to spend a combined RM500 million in capital expenditure for 2011 and 2012 to build two mills, one refinery and plantation development expenditures. “We have further imputed RM200 million allocated for new land acquisitions over the next two years. And these capex should be sufficiently funded by its operating cashflows of RM310 million to RM420 million per years.”
By end-2013, it estimated SOP’s net cash would continue to build up to the tune of RM334 million.
With 42.5 per cent of its estates still immature and an average age profile at 7.5 years old, SOP promises robust 16 per cent three-year CAGR in FFB production, 21 per cent three-year earnings per share (EPS) CAGR and yet trades at 8.3 times 2012 price earnings ratio (PER), Maybank IB stated.
Maybank IB pegged SOP’s target price at RM6.80 per share, based on 13 times 2012 PER. “We peg SOP at a slight discount to industry peers which trades at approximately 15.6 times 2012 for its low trading liquidity. Over time, as trading liquidity improves, this discount should narrow or eliminate,” the research house concluded
Tag :
Sarawak Oil Palm
券商買進心頭好．砂油棕．續購地多元發展
券商：馬銀行投資銀行
目標價：6.80令吉
目標價：6.80令吉
砂油棕（SOP，5126，主要板種植）旗下油棕樹樹齡年輕，加上生產成本相對較低，眼下將繼續購地策略，並多元發展，預計未來3年年複成長率料達21%。
在泥炭土地種植油棕樹，油棕樹鮮果串（FFB）產量一般都不見得很好，但砂油棕縱使高達65%種植地皆屬泥炭地，仍無損油棕樹鮮果串產量，去年平均產量為每公頃19.9公噸。
過去5年，該公司在低基準效應下，每股盈利年複成長率高達26%，我們預計，砂油棕仍可保持增長勢頭，未來3年年複成長率約21%。
主要是油棕樹鮮果串業務強勁增長，加上原棕油價料可維持在每公噸3000至3200令吉，上游業務短期內仍是該公司增長主力。
砂油棕近期才拓展提煉及果實壓碎等下游業務，我們預計，是項業務可在2013年開始，貢獻該公司稅務與攤銷前盈利（EBIT）6%，縱使僅是小額貢獻，但也是多元化收益表現。
該公司位于砂拉越一帶的樹齡仍很年輕，平均年齡為7.5歲，每公噸生產成本為1119令吉，與國內其他正處于產出高峰期的種植公司相去不遠。
惟隨著油棕樹漸成熟，產量也相對增加，我們相信，砂油棕仍有機會再降低成本。
該股股價目前遭嚴重低估，我們認為，砂油棕理應享有其他同業相等估值，尤其旗下業務皆表現穩定。
閉市時，砂油棕收在4.42令吉，起8仙，成交量24萬6800股。
Tag :
Sarawak Oil Palm
