Managing director Ahamad Mohamad said the two avenues were among those closely considered under the group’s expansion plan but so far, no time frame has been set.
Ahamad Mohamad
“Kulim is looking at various proposals to unlock its value and further enhance shareholders’ worth.
“Nevertheless, the current pessimism surrounding the global equity market warrants a very cautious approach,” he told StarBiz.
Kulim is involved in four strategic core businesses – oil palm plantations, oleochemicals, biodiesel and quick-service restaurants.
Ahamad said the group planned to increase its landbank in Malaysia and Papua New Guinea (PNG) to ensure expansion in its plantation operations.
“Our strong financial position allows us to explore acquisition opportunities, especially in PNG, but we are doing it cautiously due to the buoyancy and prevailing high prices,” he added.
The group is also committed to the Roundtable on Sustainable Palm Oil (RSPO) principles as “we are cautious in opening new areas that will be regarded as unsustainable”.
He said Kulim was also open to landbank offers in Malaysia although such opportunities were quite limited.
As at March 2008, the group has 31,422ha in Malaysia, 44,714ha in PNG and 6,594ha in the Solomon Islands.
According to Ahamad, PNG would feature prominently in the plantation division’s future expansion.
The New Britain Palm Oil Ltd’s Numundo plantation
Its PNG subsidiary New Britain Palm Oil Ltd (NBPOL) is in the midst of acquiring Ramu Agri Industries Ltd (Ramu), which is listed on the Port Moresby Stock Exchange.
Ahamad said: “Upon the successful acquisition, we will be able to add 30,000ha of agricultural land in PNG.”
Ongoing expansion into new areas adjacent to the group’s existing operation is also taking place at 2,000ha to 4,000ha per year.
NBPOL is also setting up an integrated palm oil refinery in Britain with a production capacity of about 200,000 tonnes per year. It is slated to be commissioned by end of first quarter 2010.
“The move will see NBPOL expanding into the European Union and will make it one of the first palm oil producers to offer fully traceable and sustainable palm oil product,” Ahamad added.
On the group’s biodiesel operations, he said the lower palm oil price, which trades competitively with the crude oil price, does provide support for the viability of Kulim’s biodiesel production.
Kulim has a joint-venture with German-based Peter Cremer (S) GmbH to set up two biodiesel plants – one in Johor and another in Singapore. “We are still cautious on the commencement and operational arrangement of our Tanjung Langsat plant as there are other factors to account for,” he added.
However, the group’s biodiesel plant in Jurong, Singapore, which has been in operation since early this year, has been profitable. This is mainly due to the favourable tax and duty structures.
“We believe that the long-term viability of the biodiesel business rests heavily on legislation or government mandate,” added Ahamad.
As for the foods and restaurants division, QSR Brands Bhd (QSR) and KFC Holdings (M) Bhd (KFCH) have taken measures since early 2008 to stay ahead of competition while the market re-adjusts its spending as a result of the higher cost of living.
He pointed out the the success in securing franchise rights for Pizza Hut and KFC in Cambodia from principle Yum! Restaurants Asia Pte Ltd could see QSR emerging as a dominant force in the country’s food and beverage industry.
“We have introduced two KFC restaurants in Phnom Penh. We plan to open three more KFC outlets in that country in 2008 with an estimated investment of US$3mil,” he said.
This complements the existing plans of QSR to open more Pizza Hut and KFC outlets in Malaysia and neighbouring countries in 2008.
Ahamad said: “We do believe our subsidiaries will continue to perform operational and financial growth in 2008 as it continues to achieve same store sales growth and success in new regional markets.”
By The Star (by Hanim Adnan)
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