Tuesday, March 24, 2015

Sarawak Oil Palm Planted Area targeted 2 million ha by 2020

KUCHING: The state’s plantation sector is poised for growth as Affin Hwang Investment Bank Bhd (Affin Hwang Capital) believes Sarawak can increase its oil palm planted area to two million hectares (ha) through the Sarawak Corridor of Renewable Energy (SCORE).

The firm in its overview report on the state yesterday reiterated the SCORE hopes of increasing the oil palm planted area to approximately two million ha by 2020 from approximately 1.3 million ha as at end-2014.

It was however unclear what proportion of the land available for development is peat, which would be increasingly difficult to develop due to sustainability issues aor consumer requirements, it said.

“Both Sarawak Plantations Bhd (Sarawak Plantations) and Sarawak Oil Palms Bhd (SOP)have plans to increase their areas planted with oil palm,” it divulged in the report yesterday, adding that increasing the scale of operations and yield to lower cost of production are critical to planters, who are effectively price-takers.

Sarawak Plantations, the firm said, has been seeing low yields over the past few years which was further impacted by encumbered estates.

“Poor plantation management, inability to harvest on estates affected by disputes and extreme weather conditions contributed to the downtrend in fresh fruit bunch (FFB) yield since 2005,” it observed.

“Plantation management issues are however being addressed to raise yields. Other strategies to drive growth include accelerated replanting and acquisition of 5,000ha of greenfield or brownfield lands per annum.”

Its current share price implies an extremely low earnings value per ha of land bank, Affin Hwang Capital added.

Looking at SOP, the firm estimated that its estates, milling, refining, kernel crushing and biodiesel currently has a good-sized land bank of 72,653ha of which 63,530ha are planted.

“We estimate the average age of palms at just above 10 years. The group is an integrated plantation company, having expanded into refining in the third quarter of 2012 and biodiesel production in 3Q14. Production of phytonutrient is expected to commence in 3Q15,” it added.

“A key growth driver is its rising FFB production as more areas reach maturity and prime age. Rising production will also contribute to lower cost of production of CPO.

“Refining operations are currently at the breakeven level compared to losses in 2014 while improvement in blending facilities will help drive demand for its biodiesel.”

All these led Affin Hwang Capital to maintain a neutral stance on the plantation sector based on its crude palm oil average selling price assumption of RM2,400 per metric tonne for 2015 and RM2,500 per metric tonne for 2016 to 2017. It retained its stock recommendations.



Read more: http://www.theborneopost.com/2015/03/24/sarawaks-plantation-sector-poised-for-acerage-growth/#ixzz3VIk5b9s4

Sunday, March 15, 2015

Rubber Block Planting

The rubber block planting scheme is one of the National Key Economic Areas (NKEA) initiatives mooted by Prime Minister Datuk Seri Najib Tun Razak to help raise the income of the people.


“I believe the scheme will generate a high income as a hectare of high quality rubber can generate an average monthly income of RM1,500,” he said during an earth-breaking ceremony for a rubber block planting scheme at Rumah Nicholas Egai, Lengain, near here last Friday.


He said more local farmers would participate in the scheme when they realise the potential of rubber as a major commercial crop, because demand in the world market is expected to increase.

Jelaing added that participants from Ulu Sebetan, Empalaie, Awas, Bila Dua, Sungai Bangkong and Lengain have already registered for the programme.


The high quality rubber planted under the programme, he said, is expected to mature and be ready for tapping in six years’ time.



Read more: http://www.theborneopost.com/2013/03/24/saratok-gets-rm12mln-for-rubber-block-planting/#ixzz3UV4O5MHb