KUALA LUMPUR: Kulim (Malaysia) Bhd plans to plant 500 hectares of land in central Kalimantan with oil palm trees in the third quarter of this year.
Kulim's chairman Datuk Kamaruzzaman Abu Kassim said the first 500 ha of land clearing for a new planting programme together with the 80 ha oil palm nursery would start in the third quarter.
"The group's move to secure additional landbank via its 74% stake in PT Wisesa Inspirasi Nusantara (PT WIN) is key to growth for its plantation segment," he said after Kulim's AGM and EGM.
To recap, Kulim re-entered into Indonesia last October and expanded its oil palm land bank by some 40,000 ha in central Kalimantan, which it expected to accelerate its new planting programme.
Kamaruzzaman said as the sales and purchase agreement was signed in October 2013, this was excellent progress as planting would only start after obtaining the environmental and Roundtable on Sustainable Palm Oil (RSPO) approvals.
He added that the next step would be between 5,000ha and 7,000ha per annum.
"As we expand our oil palm landbank, we remain resolutely focused on managing our cost of production to maximise margins and profitability, while at the same time abiding by the principles of sustainability," he said.
Kamaruzzaman said with the limited land in Malaysia, Kulim had to look for other areas where it was suitable to cultivate oil palm apart from Malaysia, Papua New Guinea and the Solomon Islands.
Plantations remain the key driver for the group and contributed 90% to its revenue in 2013.
Currently, Kulim's direct landbank in Malaysia exceeds 50,000ha.
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