umcca sotp part2 (end part)

为什么sotp？

以plantable acreage来说，umcca的规模属小型公司，如果我们沿用大型公司的pe与bv，会造成价值歪曲。

umcca的开发成本是以replanting expenses (与此同时，有关于会计制度的修改，在2007年生效) 计算的，他不同于plantation development expenditure，RE是马上构成p/l account损失的。

得以想象，数年后的balance sheet必会扭曲，他必须面对重估，才能马上materialize出真正的价值。

RE和PDE最大的不同是RE是direct expenses immediate charge in p/l account，PDE is amortizable asset is charged from time of harvesting over next 20year in straight line method, effect from 2007, no need amortisation for PDE through replanting programme.



计算出来的fair value，是感到好笑的，为什么他和股价差别这么大？
原因造成是1)不合理的disc 2)没有milling operation的资料和他的goodwill值 3)或许我计算错误。

30%的disc过分吗？如此低介入点，快速上升的收成，他只值RM6.61？
要在大马找出三倍本益比的种植公司是可以找到的。

也许大股东OCBC足让UMCCA享有medium-sized plantation stock的股价，他何尝不能涨？我们的责任只是算出他合理价而已。


filed: umcca rv

umcca sotp part1

因为时间关系，先简单的拆细umcca有关种植的SOTP(sum-of-the-part)，有时间再看其他的。

quoted from april 2007
PLANTATION OPERATIONS
As at end of financial year 2006/07, the Group has a planted acreage of 33,955 acres (13,742 hectares), comprising 21,855 acres (8,845 hectares) of matured oil palms and 12,100 acres (4,897 hectares) of immature palms.


如果按prevailing price计算，planted area可以workout出RM661,000,000。

但ummca current traded at one billion ringgits value at the share price of RM7.95

另外的资产，有些什么？ to be continued

棕仁油飆漲‧料納入暴利稅行列‧種植公司財測維持 不同策略護盤 四大種植公司風險不一

棕仁油飆漲‧料納入暴利稅行列‧種植公司財測維持
大馬財經 行業快門 2008-06-21 11:31

（吉隆坡）價格飆升的棕仁油步原棕油後塵，加入種植領域暴利稅行列，對種植領域是雪上加霜，但分析員認為，市場供應吃緊、美國潮濕氣候、高油價等因素，原棕油前景持續正面，有助緩和衝擊，維持種植領域“加碼”評級。

根據暴利稅法令，從7月1日起，暴利稅機制將取代原有的食品油津貼機制（COSS），並依據大馬棕油局平均原棕油售價，各別向東馬和半島州屬，每公噸價格超過2000令吉的原棕油和棕仁油，徵收7.5%和15%稅務。

聯昌研究指出，原有的食品油津貼機制並不包括種植面積少於40公頃的種植業者，政府通過落實涵蓋面較廣的暴利稅機制，並將近期價格飆漲的棕仁油納入其中，預計徵收的稅金所得，將較COSS高出近13%，達到29億令吉目標。

14億稅金津貼食品油

“我們預計稅金所得的14億令吉，將用來津貼每月平均7萬公噸的食品油用量，餘額則充作其他食品津貼和政府開銷。”

儘管棕仁油也難逃暴利稅，但預計新措施將對東馬種植業者有利，對在半島擁有大片種植面積的業者則是負面消息。

若原棕油價格達每公噸3350令吉水平，東馬種植業者將可節省2.0%稅務，相反半島業者則需負擔額外1.5%稅務，較先前預測的0.5%高，估計種植公司盈利將受衝擊，幅度介於下滑0.3%至上揚1.8%之間。

相關稅務較預期來得負面，但聯昌認為，這有助市場釐清真相，且對種植公司盈利衝擊不大，加上市場供應吃緊、油價高漲，以及美國潮濕氣候，令大豆種植受到影響，料積極推動原棕油價格走揚，前景依舊良好，維持各大種植公司盈利預測。

不同策略護盤
四大種植公司風險不一

大馬研究預計，上遊和下游領域賺益持續走揚，加上原棕油產量和併購成長帶動，盈利成長集中，唱好原棕油領域前景，維持2008和2009每公噸原棕油平均售價3500令吉目標。

儘管原棕油前景看好，但全球四大種植公司均採用不同的護盤策略，風險程度也各不相同，其中IOI集團（IOICORP,1961,主板種植組）採用預售3個月產量方式，而森那美（SIME,4197,主板貿服組）則是以1+2個月進行期貨交易。

新加坡豐益國際（Wilmar International）和印多福農業（Indofood Agri）則是根據市況和現月貨進行交易。

分析員認為，豐益國際的護盤策略最好，在原棕油價格年初上抵每公噸4000令吉價位時，便對原棕油價格感到憂慮，並預售2008財政年半數產量。在產量方面，IOI集團純鮮果串產量達到每公頃26至28公噸，加上低於市場平均的營運成本，無疑是這環節最大贏家。

但隨著現處於黃金週期的果樹樹齡漸老，以及印尼貢獻尚未顯著，在未來3至5年，新加坡豐益國際和印多福農業將取代IOI集團崛起成為強者，主要是他們的果樹組合平均樹齡尚淺，強勁產能可期。

豐益國際和印多福農業2008至2011財政年鮮果串複合成長率（CAGR）各別將達到7%，IOI集團和森那美則為2%和1%。

此外，豐益國際和印多福農業也是最積極購置地庫的公司，雙雙通過併購其他業者，擴大旗下種植面積。

雖然IOI集團在上遊的擴充計劃不如豐益國際和印多福農業般積極，但該公司正慢慢透過荷蘭鹿特丹的洛德斯克羅科蘭（Loders Croklaan），在美國和歐洲食品領域佔據一席位，並宣佈計劃投資2億美元在美國和歐洲興建新廠房。

豐益國際憑藉其在大馬、印尼和中國的龐大經濟規模，加上在原產品市場的良好判斷紀錄，料是其中最大受益者。不過，IOI集團在特殊油脂領域處在良好位置，有望從中“卡位”爭取成長機會。

大馬研究表示，雖然通膨壓力令人憂慮，但原棕油現較大豆油便宜17至19%，料可從食品公司可能轉向採用更廉價的食品油中獲益。

IOI上游領域具優勢

總結4家種植公司，大馬研究認為，IOI集團在鮮果串產量以及營運效益均比其他公司來得好，上游領域最具優勢；過去數年持續提高派息率，並落實資本回退、拆細股票、股票回購等計劃，在資本管理方面最具效率，但未來資本管理空間有限，主要是公司保留銀彈充作業務擴充用途。

森那美派息具吸引力

森那美則擁有最具吸引力的派息政策，主要歸功於公司大股東國民投資公司（PNB）鼓勵公司積極回退資金。

豐益國際市場延伸能力最強，印多福農業則憑藉其市場領導地位，以及龐大的市佔率，在印尼食品油市場最吃得開。
星洲日報／財經‧2008.06.21

Oriental to expand plantation ops

Friday June 27, 2008
Oriental to expand plantation ops
By DAVID TAN

GEORGE TOWN: Oriental Holdings Bhd has drawn up a plan to expand its oil palm plantation business, which also includes a possible listing of the division.

Group chairman Datuk Loh Cheng Yean said the company aimed to increase the plantation size to 60,000ha from 40,000ha now in two to three years.

“Some RM500mil to RM600mil would need to be invested. We are looking at acquiring more oil palm plantations in Asia,” she said after the company's AGM yesterday.

Apart from Malaysia, Loh said the group had oil palm plantations in Indonesia.

In 2007, the group’s plantations produced a record crop of 512,378 tonnes compared with 399,990 tonnes the year before. The yield in Malaysia, however, fell to 92,956 tonnes versus 104,691 tonnes in 2006.

Loh said the drop was expected because the palms suffered slightly from stress due to the preceding year’s high yield, she said.

“With the anticipated higher crude palm oil price in 2008, our plantation sector should enjoy a price-driven boost to earnings.

“The push for biofuel as an alternative energy source by various governments, coupled with higher soybean prices, will benefit the sector,” she said.

For the first quarter ended March 31, the group posted a pre-tax profit of RM132.7mil on revenue of RM1.27bil. That compares with RM88mil and RM1bil respectively a year earlier.

Boustead plans to sell non-performing assets

Friday June 27, 2008
Boustead plans to sell non-performing assets


KUALA LUMPUR: Boustead Holdings Bhd is looking to dispose of some of its non-performing assets and reduce its gearing to a more acceptable level.

Managing director Tan Sri Lodin Wok Kamaruddin said the company would be undertaking a new corporate exercise to unlock the value of its assets and investments.

“This includes the disposal of some of our non-performing assets to raise more money. We are also looking to lower our gearing to a more acceptable level,” he said yesterday after shareholders at its EGM approved the proposal to take Boustead Properties Bhd private.

Currently, Boustead controls 86% of Boustead Properties. It has given Boustead Properties shareholders till July 10 to accept the RM5.50 per share offer.

Lodin said shareholders had expressed concern over the gearing as payment in cash had to be made to Boustead Properties shareholders who accepted the offer.

He also said Boustead would focus on its six core businesses: properties, plantation, finance, heavy industries, manufacturing and trading.

He said the company was looking to increase its plantation land.

“We will continue to expand as and when we get the opportunity to increase the land-bank. But it must be for the right reason, price and location.

“We are considering options to purchase plantation land in Sabah and Sarawak and we are actively scouting for it there,” he added. – Bernama

Oriental plans RM600m plantation expansion

27-06-2008: Oriental plans RM600m plantation expansion
by Regina William
Email us your feedback at fd@bizedge.com

PENANG: Oriental Holdings Bhd is planning to restructure and expand its plantation sector, involving an expenditure of an estimated RM600 million, as part of its long-term strategy to boost its oil palm acreage. The group is also considering listing its plantation arm in the next few years.

Its chairman Datuk Loh Cheng Yean said plans included increasing the present 40,000ha, located in Malaysia and Indonesia, to 60,000ha within the next two to three years. It is expected to involve investments of RM600 million.

“Most of our expansion will be focused in Indonesia. We are going to increase our acreage for oil palm both in Malaysia and Indonesia as we are doing very well in this sector. Our intention is not only to leverage on the high prices of the raw commodity now but also our expansion is part of our business strategy.

“As a group, this business is ideal for us and since we are also involved in development projects, it augurs well for us,” said Loh after the company’s AGM. He added the company had identified several sites both in Malaysia and Indonesia and negotiations were still underway.

“We are also looking at investing in the plantation industry in other countries in the region as part of our expansion plans in the next few years. Due to our performance in this sector, the group is also contemplating to list the plantation division within the next few years,” Loh added.

The plantation subsidiaries of the group enjoyed a highly profitable year with the Indonesian plantations producing a record crop of 512,378 tonnes in 2007 compared to 399,990 tonnes in 2006. However, in Peninsula Malaysia, total yield for the year amounted to 92,956 tonnes in 2007 compared to 104,691 tonnes in 2006.

The decrease was attributed to the palms suffering stress due to the high yields in 2006 but it was compensated by the higher commodity price averaging RM514 per tonne compared to RM290 in 2006.

The plantation sector is also expected to boost the group’s earnings this year while the push for biofuel as an alternative energy source by goverments coupled with higher soybean oil prices were also expected to benefit this sector.

The group recorded RM4.5 billion revenue in 2007, an increase of 13.9% from RM3.9 billion in 2006 while pre-tax profit was at RM500 million, a 16.6% rise from RM334.1 million in 2006.

Government to lose Tshs. 15 billion

east africa news
By Lilian Lyimo, IPP Media
Wed, Feb 23, 2005

The tariff on raw materials was formerly fixed at 25 per cent, but later reduced to 10 per cent with suspended duty of 10 per cent. In the second move, crude palm olein forced importers to pay 20 per cent tariff.

Crude Palm olein is obtained when crude palm oil undergoes fractionation and refining.

Out of the process, two products result: refined, bleached and deodorised (RBD) olein, which is used in the manufacture of edible oil and RBD stearin that is used in the manufacture of soap.

After the East African Customs Union came into force on January 1, this year, the government decided to lower the import duty on crude palm olein to zero and raised that of basic raw materials used in the manufacture of soap, RBD palm stearin to 25 per cent.

Sources said the removal of the tariff was done after some manufactures argued that crude palm olein could be used to manufacture edible oil and soap.

They also argued that removing the tariff would encourage edible oil mill owners to buy locally produced materials.

Explaining how the government would lose the money, an expert in the soap industry, Egid Marika, told The Guardian recently that importers of the semi-processed palm oil buy an average of 110,000 tonnes of the raw materials per year, valued at US$550 per tonne CIF (A:cost,insurance,freight).

This translates to 60,500,000/- if the material is levied 25 per cent import duty.

By lowering the tariff to zero, the government forfeited the 25 per cent duty it would have earned from import of crude palm olein.

By setting the duty for palm olein at zero, the government stands to lose about 15bn/- this year and in subsequent years to come because of this policy.

I don't see why it should needlessly incur the loss,the expert, who is a chemical engineer and works at a Tanga soap factory, explained.

He argued that there was no rationale in the abolition of import duty on palm olein, as even the suppliers, Malaysia and Indonesia, have imposed export duty on the material.

Stand-alone factories do not have the fractionation facilities and have thus two options: either to import RBD palm stearin from Indonesia or Malaysia and pay duty of 25 per cent or purchase locally from their local competitors.

Either way, local soap manufacturers are being strangled.

The 25 per cent duty is too high to enable them to operate profitably.

On the other hand, local suppliers of RBD palm stearin, who are only three, will only do so after meeting their requirements and at a price that their competitors may not afford,he noted.

According to the sources, at present there are three factories that have fractionation plants, which also manufacture soap and edible oil.

He said that, following the government's decision to impose zero-tariff, factories with fractionation plants could import semi-processed palm oil and process it to get RBD palm stearin, which is not charged import duty.

We don't understand how the government has failed to see that by removing import duty, it has also killed free-market competition in the soap industry and created a conducive environment for those who have fractionation facilities to create a monopoly of the business,he observed.

He added: under the circumstances, the government cannot monitor how much RBD palm stearin the plants would produce, how much they would sell to stand-alone factories, at what price and how much they pay in taxes.

There is also an element of cheating that the government failed to detect.

Those who have fractionation plants do not import crude palm oil as they claim but crude palm olein, which is a semi-processed product.

They thus import a product and not raw material,�he added.

Relating the situation to the East African Community Customs Union, Exaud Shilla, who works in a soap factory in Dar es Salaam as a marketing manager, said that Tanzania soap producers would fail to compete, as their cost of production would be higher than those of their counterparts in Kenya and Uganda.

The Kenya and Uganda governments have set the import duty of BDR palm stearin at zero.

Obviously the cost of production of soap in these countries is cheaper than those incurred by stand alone factories in our country, which have to pay import duty of 25 per cent for the same material.

Subsequently the products from Kenya and Uganda will be cheaper than ours,�he explained.

He warned that under the circumstance, stand-alone factories have less than six months to operate before they will be forced to close down. Six months could be an overstatement,�he noted.

Finance Minister Basil Mramba said that government has not approved the idea of scrapping of import duty on crude palm olein as had been requested by edible oil manufactures who have fractionation plants.

It is true that they had requested that we set the tariff to zero but we turned down the request for several reasons.

One is that we realised they do not import crude palm oil as they claim but a semi-processed product. This cannot be imported without duty,he explained.

Vitamin E and Vitamin A

Vitamin E (The Tocotienols Super Anti Oxidants)
Vitamin E is one of the most important phytonutrients in edible oils. It consists of eight naturally occurring isomers, a family of four tocopherols (alpha, beta, gamma and delta) and four tocotrienols (alpha, beta, gamma and delta) homologues. While most Vitamin E supplements on the market today are composed of the more common tocopherols, tocotrenols are believed to be a much more potent antioxidant than tocopherols.

Tocotrienols are naturally present in most plants, however they are found most abundantly in palm oil extracted from palm fruits. Other sources are rice, wheat germ, oat and barley. It has been proven that alpha tocotrienols is 40 to 60 times more potent than alpha-tocopherol in the prevention of lipid per oxidation. It is predicted that tocotrienols will become recognized as the new super anti-oxidant in the very near future.


Vitamin A (Carotenes from Natural Palm Oil is Nature's Most Abundant Source)
In nature, there are approximately 600 known carotenoids, ranging from yellow orange to red hues and some 50 of these pigments possess vitamin A activity of varying degrees. Red palm oil is one of the richest natural plant sources of carotenoids with concentration of 500-700 ppm. It has 15 times more retinol-equivalent than carrots and 300 times more than tomatoes. No other vegetable oil contains carotenoids in significant quantities. Analysis shows that alpha and beta carotenes constitute approximately 90% of the total carotenoid content.

src: http://www.primahalal.com/technology/safar.htm

olein and stearin seperation

According to the Ministry of Health, Malaysia (MOH) the food regulation for RBD is as stated below. RBD Palm Sterin Regulation 183 (Food Regulations 1985):
Refined, bleached, deodorized palm stearin shall be the solid fraction obtained by the fractionation of either crude palm oil, which is subsequently refined, bleached and deodorized or by the fractionation of refined, bleached, deodorized palm oil as specified in regulation 196.

RBD Palm Sterin shall have: 1. An iodine value of from 21.6 to 49.4.
2. A saponification value of from 193 to 206 milligrams of potassium hydroxide per gram.
3. A melting point of not less than 44 °C.


RBD Palm Sterin shall not contain: 1. 0.15 per cent of water and impurities.
2. 0.20 per cent of free fatty acid(as palmitic acid).


RBD Palm Olein Regulation 183
(Food Regulations 1985):
Refined, bleached, deodorized palm olein shall be the liquid fraction obtained by the process of fractionation of either crude palm oil which is subsequently refined, bleached and deodorized, or by the fractionation of refined, bleached, deodorized palm oil as specified in regulation 196.

RBD Palm Sterin shall not contain: 1. An iodine value of not less than 56.
2. A saponification value of from 194 to 202 milligrams potassium hydroxide per gram.
3. A melting point of not more than 24°C.


src : http://www.primahalal.com/technology/safar.htm

note: it should spell "stearin"

semi-process product from cpo, and other

REFINED, BLEACHED & DEODORISED (RBD) PALM OIL

RBD palm oil is obtained from refining crude palm oil. It is a light yellow liquid and semi-solid at room temperature, melting to a clear yellow liquid on slight heating.

RBD palm oil is used as frying oil for food industries such as instant noodles and snack food. It can also be used in manufacture of margarine, shortening, vanaspathy, ice cream, condensed milk and soap.

Melting Point 33-39º C

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REFINED, BLEACHED & DEODORISED (RBD) PALM OLEIN (软质)
RBD palm olein is obtained from fractionating refined palm oil to separate liquid parts (olein) from solid parts (stearin). It is a clear yellow liquid at room temperature.

RBD palm olein is used as cooking oil as well as frying oil for food industries such as snack food and ready-to-eat food. It is also used as a raw material for margarine and shortening.

Melting Point 24º C max

-----------------------------------------------------

REFINED, BLEACHED & DEODORISED (RBD) PALM STEARIN
RBD palm stearin is obtained from fractionating refined palm oil to separate olein from stearin. It is a white solid at room temperature, melting to a clear yellow liquid on heating.

RBD palm stearin is used in margarine and shortening industries. It is also used in soap, candles and oleochemical industries.

Melting Point 44º C min

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PALM FATTY ACID DISTILLATE
Palm fatty acid distillate ("PFAD") is a by-product from refining crude palm oil. It is a light brown solid at room temperature, melting to a brown liquid on heating.

Palm fatty acid distillate is used in soap industries, animal feed industries and as raw materials for oleochemical industries. Vitamin E can be extracted from PFAD.

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PALM KERNELS

Palm kernel is obtained from palm fruitlet after the removal of the mesocarp and shell.

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PALM KERNEL OIL
Palm kernel oil is obtained from the crushing of palm kernel. It is a light yellow liquid at room temperature.

Palm kernel oil can be refined into RBD palm kernel oil and its main usage is in oleochemical industries and speciality fats.

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PALM KERNEL EXPELLER CAKES

Palm Kernel Expeller Cakes is a by-product from the kernel extraction process.

Palm Kernel Expeller Cakes is used as a raw material for animal feed, especially for cattle feed.

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CRUDE PALM OIL
Crude palm oil is obtained from the mesocarp of fresh fruit bunches. It is an orange liquid and semi-solid at room temperature, melting to a clear red-orange liquid on slight heating.

Crude palm oil can be refined and further fractionated to widen its application.




Copyright © 2003-2006 Kuala Lumpur Kepong Berhad. All Rights Reserved.
source: http://www.klk.com.my/busi_plantation_p.htm

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fresh fruit bunch from every 1 tonnes can produce:
200kg of crude palm oil
50kg of palm kernal(which include 25kg kernel cake and 22.9kg palm kernel oil)

CPO Export Volume Remains High

24-JUN-08

JAKARTA: CPO producers states export volume will remain high despite their worries that the government will apply a 20% export tax in July.

Chairperson of the Association of Indonesian Oil Palm Businesses (Gapki) Akmaluddin Hasibuan said crude palm oil price in Rotterdam had been steadily increasing and was estimated to hit US$1,200 per ton.

Data by the Department of Trade showed CPO price in Rotterdam for July-September shipment reached US$1,195 per ton on June 23. However, the position was still below US$1,220 per ton on June 2.

"We have anticipated the price increase in Rotterdam and a 20% export tax in July. To be sure, we have to keep exporting," he informed Bisnis yesterday.

According to him, export was a must since domestic cooking oil supply was sufficient and producers could reap up profits on the soaring international price.

He continued Indonesia was able to meet the total domestic cooking oil need of 4.45 million tons since its total production volume can reach 19.8 million tons. The Department of Trade targets CPO export volume in 2008 will reach 9.41 million tons.

The government this year sets to record US$7.6 billion in CPO export value, up by 22.45% from US$6.2 billion last year. CPO producers estimate CPO export volume can reach 13 million ton.

In the meantime, the government applies progressive export tax based on the CPO average price in Rotterdam. If the CPO average price is less than US$1,100 per ton, the government will apply a 10% export tax. However, if the CPO average price is more than US$1,100 per ton, the government will apply a 15% tax. Furthermore, if the CPO average prices are more than US$1,200 per ton and more than US$1,300 per ton, the government will raise the export taxes to 20% and 25%, respectively.

In June 2008, the government applies a 15% export tax to CPO with the CPO average price reaching US$1,105 per ton. (Bisnis/faa)

Malaysian palm oil steady, eyes Jakarta export tax

Wed Jun 25, 2008 11:48am IST

KUALA LUMPUR, June 25 (Reuters) - Malaysian crude palm oil futures held firm on Wednesday as investors were torn between crude oil's strength and weaker soyoil, dealers said.

Prices of the vegetable oil fell more than 5 percent last week but Indonesia's move to raise export taxes for palm oil might see more orders coming to Malaysia, pushing the market higher, traders said.

By the midday break, the benchmark September contract KPOU8 on the Bursa Malaysia Derivatives Exchange was unchanged at 3,503 ringgit ($1,074) a tonne.

"The market is sluggish; some strong moves in crude oil might support but the fact is palm end-stocks are going to rise to about 2.2 million tonnes because demand is not keeping pace," said a trader with a foreign broker.

Exports of Malaysian palm oil products for June 1-25 fell 9.4 percent to 899,327 tonnes from 993,093 tonnes shipped between May 1 and 25, cargo surveyor Intertek Testing Services said on Wednesday. [ID:nKLR188108]

Other traded months <0#KPO:> fell between 5 ringgit and 11 ringgit, except for the October contract, which was unchanged. Overall trade stood at 3,083 lots of 25 tonnes each.

"The Indonesia palm oil export tax increase might just be the right thing to get the market in a mood to move higher because demand will eventually be more focused on Malaysia rather than Indonesia," said another trader.

Indonesia will raise palm oil export taxes in July to bring them in line with international prices, a senior trade official said on Wednesday.

The government will raise the palm oil export tax to 20 percent in July, from 15 percent in June, while the base export price for crude palm oil will be increased to $1,144 per tonne from $1,105.

The new prices will be valid from July 1 until the end of the month.

Oil hovered just $3 short of last week's record high on Wednesday, as traders eyed forecasts of a drawdown in U.S. crude stocks and dollar movements ahead of the Federal Reserve's interest rate decision. [ID:nSYD230648]

U.S. soyoil for July BON8 delivery was weak ahead of a U.S government report on 2008 crop acreage on Monday, which will detail the number of acres damaged by the worst flooding in the American heartland in 15 years. [ID:nSEO251501]

In Malaysia's cash market, crude palm oil for June and July shipments in the southern and central regions were quoted at 3,000/3,520 ringgit a tonne. Trades were not quoted by the end of the morning session.

Palm, soy and crude oil prices at 0550 GMT Contract Last Net chg Settle Open High Low Volume PALM OIL JUL8 3491 -5.00 3496 3487 3494 3484 519 PALM OIL AUG8 3492 -11.00 3503 3493 3496 3484 338 PALM OIL SEP8 3503 + 0.00 3503 3502 3504 3490 1871 PALM OIL OCT8 3505 + 0.00 3505 3515 3515 3497 355 CBOT soyoil* 62.98 + 0.06 63.10 N/A 63.16 62.77 N/A NYMEX crude**137.18 + 0.18 137.00 N/A137.34136.71 N/A Palm oil prices in Malaysian ringgit per tonne * Soy oil in U.S. cents per pound ** Crude in USD per barrel ($1 = 3.2620 ringgit) (Reporting by Niluksi Koswanage, Editing by Jacqueline Wong)


印尼的出口税是根据rotterdam期货，每月计算一次。related article

Roadshow harvest

Interest in plantation stocks is still strong. We recently completed a one-week roadshow on the regional plantation sector in Singapore and Hong Kong. The purpose of the trip was to update investors on: (1) our outlook for CPO price as well as the sector; (2) recent changes in palm oil taxes in Malaysia; and (3) highlight our top picks. If our tight schedule is anything to go by, interest in the Asean palm oil sector remains strong.

Investors are neutral to overweight. Most investors are largely in agreement with us and are neutral to overweight on the sector. Some are looking to add to their positions as they are bullish on the medium-term prospects for CPO price. However, others are concerned about the recent volatility of crude oil price and the potential de-rating of the plantation sector following its strong YTD outperformance.

Maintain OVERWEIGHT call. In the short term, we are turning a bit cautious on the sector in view of (1) the high volatility in the oil market, (2) possible demand dent from economic uncertainty and near-record CPO prices, (3) biofuel policy risks, and (4) weak market sentiment. However, we remain upbeat on the sector’s long-term fundamentals and maintain our OVERWEIGHT call given: (1) the strong prospects for CPO price, (2) the sector’s relatively defensiveness against political risks, and (3) the sector’s resilience against an economic slowdown as 80% of crude palm oil is processed and used in edible products. We continue to believe that there is potential upside to our CPO price forecasts given the current tight edible oil supplies and volatile global weather conditions of late.

Top picks in the region. There is no change to our top big-cap picks, which are IOI Corp for Malaysia, Wilmar for Singapore and Astra Agro for Indonesia. Among the mid-cap planters, we like Asiatic in Malaysia, IndoAgri in Singapore and Sampoerna Agro in Indonesia. Key re-rating catalysts for the sector are higher CPO prices, adverse weather, further biofuel incentives and rising crude oil price.

Feedback from regional plantation roadshow

We recently completed a one-week roadshow on the regional plantation sector. During our trip, which covered Singapore and Hong Kong, we met up with approximately 50 fund managers and buy-side analysts from 41 investment management firms. The purpose of the trip was to update investors on: (1) our outlook for CPO price as well as the sector; (2) recent changes in palm oil taxes in Malaysia; and (3) highlight our top picks in the region. Judging from our tight schedule, we believe that interest in the Asean palm oil sector remains strong.

Our message. We highlighted to investors that we remain optimistic on the sector as CPO price is well-supported by strong fundamentals. However, we are turning a bit cautious due to concerns over a potential correction in crude oil price in the event of (1) a major unwinding of funds out of commodities into other market instruments, and (2) a global recession. These events may drag down sentiment on commodities including CPO despite its strong fundamentals. However, we remain upbeat on the sector’s long-term fundamentals and maintain our OVERWEIGHT call given: (1) the strong prospects for CPO price, (2) the sector’s relatively defensiveness against political risks, and (3) the sector’s resilience against an economic slowdown as 80% of crude palm oil is processed and used in edible products.

In terms of strategy, during our roadshow, we recommended that investors opt for highly liquid, big-cap, efficient planters with solid corporate governance track records in view of the poor market sentiment and volatility in the commodity market. For longterm players, we drew their attention to our mid-cap plantation picks, which offer cheaper P/Es than their big-cap peers. We also voiced our preference for the Malaysian-based planters over the Indonesian players due to regulatory concerns.

Feedback from investors. Most investors are largely in agreement with us and are neutral to overweight on the sector. Some are looking to add to their positions as they are bullish on the medium-term prospects for CPO price. However, others are concerned about the recent volatility of crude oil price and the potential de-rating of the plantation sector following its strong YTD outperformance.

Bullish factors supporting the sector

A resilient sector for exposure in the current environment. The palm oil sector stands out as a resilient sector against the current backdrop of economic uncertainty and high commodity prices. We believe the upstream palm oil players are set to enjoy record profits this year as higher palm oil prices more than offset operating cost increases due to rising fertiliser, fuel and labour costs, and higher taxes. Average CPO price for the first five months rose 65% yoy to RM3,451 per tonne. Downstream oil palm players, from refiners to oleochemical and speciality fats players, are also reporting higher earnings, thanks to higher sales volumes and better profit margin per tonne of refined products. Following the consolidation of several big palm oil groups over the past year, the plantation sector has become a more significant component of the market indices – 21.3% for KLCI, 4.96% for FSSTI and 4.2% for JCI.



CPO price may not have peaked yet. Although spot CPO price is currently 14% below its year’s high of RM4,203 per tonne, we believe it is not conclusive that palm oil price has peaked for the year. This is because CPO price may scale new heights in the event of the perfect storm, i.e. record crude oil price, poor weather in major planting areas and export curbs by major edible oil exporting countries. We believe one cannot discount these possibilities as crude oil price recently reached a new high and the key US corn planting areas was reportedly affected by flooding in the Midwest while southern China was also hit by heavy flooding recently. Lastly, governments may resort to drastic measures to secure domestic supply in the event of shortages in the global edible oil market. This may exacerbate the tight conditions, leading to a price rally.

Current price cycle to last longer than previous cycles. We are also of the view that the current uptrend in CPO price will last longer than its historical cycle due to a structural change in demand. Historically, a high portion of the rise in demand went to the food sector, which takes up the bulk of the edible oils. However, this has changed in view of the increase in demand for biodiesel driven by fiscal incentives or mandatory biodiesel blend usage policies implemented by the US, Europe and other governments. This, coupled with the strong demand growth from China and India, has lifted global edible oil demand above its historical average growth of 3-4% by 1-2% pts, evident from the stronger demand growth posted over the past few years. On the supply front, it is taking farmers longer to raise supply despite the high prices. This is mainly because of palm oil’s expanded market share in the global edible oil market. Also, it takes three years for oil palms to reach maturity and expansion into new oil palm areas is affected by local issues and environmental groups, the ongoing fight for acreage between soybean and corn in US due to rising demand for corn for ethanol production in US and high export/windfall taxes imposed on farmers.


Higher oil prices lift floor price for palm oil. The recent sharp rise in crude oil price has improved the economic viability of biodiesel. We understand that some biodiesel producers are taking this opportunity to raise their biodiesel production, thus boosting demand for edible oils. Also, the current high crude oil price acts as a floor price for CPO in the event of excessive supply. We estimate that at a crude oil price of US$130 barrel, the CPO biodiesel breakeven price or floor price for CPO is around RM3,529 per tonne, assuming an exchange rate of RM3.25 per US$. We are also of the opinion that the CPO price is well supported as it currently trades at a wider discount of US$208 per tonne to soya oil than the historical 8-year average of US$100 per tonne. This will increase substitution between palm and soya oil.







Potential upside to our CPO price projections. There is upside to our CPO price projection of US$1,105 (cif) or RM3,350 (fob) per tonne for 2008 and US$1,090 per tonne or RM3,000 per tonne for 2009 as we have conservatively assumed normal weather in key planting areas and an average crude oil price of US$110/barrel. We will review our CPO price in due course to account for these developments if they turn out to be significant. Also uncertain is the outcome of Argentinian farmers’ standoff with the government on the 44% export tax on agriculture products such as sunflower and soybean. If not resolved, this may affect soybean plantings in the upcoming season and will seriously impact the already tight global soybean market. Argentina accounts for 19% of total global soybean oil output and 54% of global soybean oil exports.

Figure 6: Breakdown of soybean oil output and exports by countries


Clarifying changes in Malaysia’s palm oil taxes. We reiterated to clients that the recent move by the Malaysian government to replace the cooking oil cess scheme with a windfall tax is net positive for the East Malaysian planters and slightly negative for planters in Peninsular Malaysia. We also highlighted to investors that the Malaysian planters are still better off than their Indonesian peers as total palm oil taxes (windfall and sales tax) in Malaysia of around 7-11% on CPO selling price is less than Indonesian planters’ current export tax of 15%. We are also of the view that clarification on the palm windfall tax in Malaysia will help lift the uncertainty overhanging the sector. Furthermore, our opinion is that the sector is unlikely to face additional taxes for the next year or so, under the current administration.

Concerns raised by investors

Sustainability of record crude oil prices. Investors voiced their concern over the sustainability of crude oil prices and a potential sharp correction in oils and other commodities on concerns over weaker demand. We agree that this scenario will be negative for CPO price, which is indirectly linked to crude oil price. However, our regional energy analyst believes that the fundamentals for crude oil remain strong and predicted in a report on 14 May 2008 that crude oil should average US$110-120/barrel in 2008-2010. At these crude oil prices, CPO should be firmly supported at RM2,800- 3,000 per tonne over the next three years at the current exchange rate.

Potential U-turn on biofuel subsidies/targets by key countries. We were also asked about the possibility of a U-turn in biofuel targets in the US and European Union (EU), which are increasingly blamed for pushing up food prices globally. Our view is that a complete removal of current biodiesel incentives or targets is unlikely. However, governments may be pressured to reduce the current biofuel targets. Between the US and EU, we believe the latter is likely to make concessions on this front in the near term. However, we do not expect a substantial change. That said, a drastic cut in the EU’s current biofuel target for transport of 5.75% by 2010 and 10% by 2020 would be negative for edible oil prices as it reduces the demand growth prospects for edible oils. We also stated our opinion that the US is unlikely to change its biofuel incentives in the short term, judging from the recent statement by Edward Schafer, the US secretary of agriculture, that renewable biofuels is one of the ways to deal with the high oil prices. He indicated to the media that analysis by his department indicated that biofuel production is responsible for only 2-3% of the increase in global food prices and had reduced consumption of crude oil by a million barrels per day.

Widening valuation gap between planters and market. Other concerns raised are the widening P/E gap between the plantation sector against the market as the sector has outperformed the market YTD. We argued that the valuation gap might narrow over time as there are potential earnings upside to planters’ earnings if CPO price exceeds expectations, in contrast to earnings downside risk for other sectors, which are affected by global economic uncertainty and high commodity prices.

Addressing concerns over high palm oil stocks. Malaysia’s palm oil stock level rose by 0.8m tonnes yoy to a record 1.91m tonnes in May, as exports grew at a slower space than output. On an absolute level, the stock level may appear high relative to historical standards but we believe this is partly due to structural changes in palm oil trades and government policies. Firstly, consumers have been keeping lower stocks due to higher working capital costs following the sharp rise in CPO price. As a result, the key producing countries, in particular, Malaysia, are holding more stock. Secondly, due to the monthly variation in Indonesia’s export tax rate for palm oil according to the monthly average CPO price, the Malaysian refiners have seen an increase in imports of palm oil from Indonesia. This is evident from the 142% yoy jump in palm imports by Malaysia in the first five months of 2008 to 258,951 tonnes. Lastly, the higher stock level represents only 1.6 months of exports coverage, which is not high considering the above factors as well as the fact that refined edible oils can be stored for at least six months. We also pointed out that Malaysia’s palm oil exports increased by 14% yoy in the first five months of the year, which suggests that demand remains healthy and is likely to stay high in view of CPO price competitiveness relative to other edible oils.


Valuation and recommendation

Maintain OVERWEIGHT call. Overall, we remain bullish on the sector’s long-term fundamentals and maintain our OVERWEIGHT call on the sector. However, we are turning a bit cautious in the short term due to (1) the high volatility in the oil market, (2) possible demand dent from economic uncertainty and near-record CPO prices, (3) biofuel policy risks, and (4) the sector’s outperformance YTD. Our views are shared by most investors who are less bullish on the plantation sector compared to a year ago. On a more positive note, we believe our CPO price assumptions are conservative and there is potential upside to our price forecasts given the current tight edible oil supplies and volatile global weather conditions of late. Also, this sector offers the best relative defensive play in the current uncertain market environment.

No change to our recommendations and top picks. There is no change to our top big-cap picks, which are IOI Corp for Malaysia, Wilmar for Singapore and Astra Agro for Indonesia. We like IOI Corp for its share liquidity, capital management and transparent management. Its share price is well supported by its ongoing share buyback programme. Wilmar is our top pick in Singapore for potential merger synergies, M&A possibilities and unique global agribusiness exposure. Indonesia’s Astra Agro boasts strong management, large asset base, attractive valuations and share liquidity. Among the mid-cap planters, we like Asiatic in Malaysia, IndoAgri in Singapore and Sampoerna Agro in Indonesia. Key re-rating catalysts for the sector are higher CPO price, adverse weather, further biofuel incentives and rising crude oil price.





Ivy Ng Lee Fang CFA +60(3) 2084 9697 - ivy.ng@cimb.com
filed: roadshow harvest 24 June 2008.pdf

蓖麻籽的經濟價值

蓖麻籽的經濟價值
中国生物能源化工论坛:北方一年生草本，熱帶多年生灌木。

蓖麻籽含有大量油分，約占50％，而種仁的含油量達58－75％，所以蓖麻籽的主要用於榨油。蓖麻油的粘度高、比重大，其粘度隨溫度的變化也不顯著，且在大氣中不易被氧化，在低溫下也不會凝固，能耐500℃ 高溫面不發生變化，故可做高級潤滑劑的原料。是飛機和高速機械的理想潤滑油。它易溶於酒精，而難溶于冷石油醚。在醫藥上用作緩瀉劑；蓖麻餅粕可養蠶並可作乳牛的青飼料。蓖麻油經濃硫酸處理後，可得到磺化油，俗稱紅油，是紡織工業上常用的乳化劑。蓖麻油脫水後可轉變為軛合酸，具有幹性，可代替桐油之用。大量的蓖麻油以處理後，可供醫藥和生產熟油，特製清漆及搪瓷之用。蓖麻油在用亞硝酸處理時變為固體化合物－－甘油三反蓖麻酸酯。蓖麻杆皮是堅韌的纖維，可制繩索和麻袋。蓖麻油在化學工業上又可用作肥皂、炸藥、油漆、油墨、塑膠和人造橡膠等原料。因此，它被稱為“油中之王”、“可再生的石油資源”。
榨油後的餅粕含蛋白質達40％左右，為糧食作物的3倍，因一般品種的蓖麻籽中均含有蓖麻鹼，其致人死亡量為0.16克 劑 量，因此過去未能充分利用。通過人們的長期研究，蓖麻餅經高溫處理可破壞其中的毒素，近來已開始用作配合飼料和食用蛋白質添加劑。未經處理的餅粕，含全氮7.59％，全磷2.85％，全鉀0.79％，是很好的肥料和燃料。為了充分發揮蓖麻籽的作用，使它發揮更大的作用，國內一些單位就蓖麻籽粕去毒的研究進行了大量工作。
蓖麻籽也和大豆一樣含有優良的蛋白質，蓖麻籽的蛋白質含清蛋白、球蛋白與分解蛋白。但清蛋白中含有蓖麻鹼，毒性很強，能使紅血球沉澱。人或動物誤食了蓖麻籽會造成生命危險。據有關單位分析，成人食入10－20粒，小孩食入5－6粒蓖麻籽就能致命。蓖麻油也同樣有毒，所以不能食用。
二、蓖麻產品的用途
a) 蓖麻餅粕
蓖麻餅粕含蛋白40％左右，因其中含有蓖麻堿，蓖麻毒蛋白、過敏物質、血球凝聚素等有毒成份，致使此蛋白粕長期來一直用作肥料。研究發現，將蓖麻餅粕脫毒處理後用作飼料是完全可以的，對羊、兔做餵養試驗，平均消化率在90％以上，畜禽對蓖麻餅蛋白的消化率為77％。據現代營養學分析，蓖麻餅粕是一種高蛋白食品，含有40％左右的優質蛋白、脂肪1.2％、糖類14％、粗纖維以及鈣、磷物質。在蓖麻蛋白中含有17種氨基酸，詳見下表。
蓖麻餅粕中所含成份（％）（中科院衛生研究所分析資料）



從上表看出，大豆與蓖麻餅所含氨基酸量接近，兩者均尚有不足，如果兩者混合食用（飼料），可達到氨基酸互補作用。蓖麻餅粕還可以用來製造氨基酸醬油，將蓖麻餅酸解後製成總氮含量0.927%的高級醬油,100㎏餅可產500－600㎏醬油，而且，酸解過程中可將餅中各種有毒物質全部破壞，經動物試驗結果表明無毒性反應。蓖麻蛋白由球蛋白、白蛋白、穀蛋白等組成，在堿液中溶解後為膠體，具有高度粘結性，可用作高級機制木板的膠合劑。
b) 蓖麻油
蓖麻油不僅可以直接用來做潤滑油、電氣絕緣用油、刹車油、醫藥用油等，而且還可以製成重要的化工原料及化工產品。蓖麻油的衍生物用途如下：蓖麻油酸、蓖麻油酸甲酯、十一烯酸、脫水蓖麻油、氧化蓖麻油、太古油、氫化蓖麻油、癸二酸。其中癸二酸可以用於生產尼龍610、尼龍9、尼龍810以及尼龍1010等性能優良的工程塑料和纖維材料。癸二酸的酯類可用作增塑膠劑、癸二酸二乙基已酯（即二異辛酯）是一種用於噴氣式發動機的高級潤滑劑。

17-06-2008: Blanket windfall tax rule may hurt small planters

by Sharon Tan
Email us your feedback at fd@bizedge.com


KUALA LUMPUR: The new windfall tax introduced by the government would be a burden to the smaller and newer oil palm players, as their high cost of production for crude palm oil (CPO) is already affecting margins.

New oil palm developers would be especially hard hit by the blanket ruling as the gestation period before oil palm trees begin to provide good yields was long, said Multi Vest Resources Bhd group plantation director Abdul Latip Mohd Zain.

“Imposing the windfall tax would not be a big issue with the bigger and more mature producers. For the smaller and new players, the cost of production is high and our yields are not significant,” Abdul Latip said.

For newcomers, the cost of producing a tonne of CPO is not cheap. The production cost would amount to more than RM2,000 in the first year, with fresh fruit bunches (FFB) yield of five to 15 tonnes per hectare.

The production cost takes into account fertiliser, weeding, maintenance of roads and irrigation, harvesting and transportation costs.

“It takes a long time to yield profits from the plantation land. Therefore, to impose a windfall tax across the board would burden small to medium players who also need to pay their debts and borrowings.

“The early stages of the oil palm plantations are like babies. They need nurturing and care before growing into a mature tree that gives good yields,” he told The Edge Financial Daily recently.

Under the windfall tax framework, plantation companies in the peninsula and Sabah and Sarawak would be charged 15% and 7.5%, respectively, from July 1.

Based on Malaysian Palm Oil Board data, total CPO production of some 15.8 million tonnes would amount to almost RM2 billion collection for subsidising cooking oil.

The amount collected would be quite substantial, considering that cooking oil consumption in the country was only between 750,000 tonnes and 800,000 tonnes against the 15.8 million tonnes of total CPO production, said Abdul Latip.

Instead of imposing a tax solely on palm oil producers, Abdul Latip suggested that the palm oil refiners be subjected to the same tax policy. “The tax should be more spread out and include the refiner. It is unfair and the government should analyse the situation before imposing a blanket tax.”

Abdul Latip added that industries benefiting from the boom in rubber and oil prices should be included in the windfall tax regime.

“If the measures are introduced by the government to raise revenues, then the windfall tax should also be collected from rubber plantations and the oil and gas sector,” he said.

A comment : there was no more discrimination against size of planter and no more punishment against low OER ffb.

Rooting out the windfall tax impact

20 June 2008
CIMB Research Report

Windfall tax on palm kernel oil too
To get to the root of the windfall tax on oil palm planters announced on 4 June 08, we got hold of the Windfall Profit Levy Act. Below are our findings and assessment: Windfall tax replaces cooking oil subsidy from 1 July 2008. The report clarifies that the current cooking oil subsidy scheme (COSS) will be scrapped on 30 June 2008. This means that the payment of cess under COSS will apply to production up to June. The COSS will be replaced by the new windfall tax, which will take effect on 1 July 2008.

Comparing the tax schemes. Under the COSS, the Malaysian Palm Oil Board (MPOB) collects a special cooking oil cess of 2 sen per tonne of fresh fruit bunches for every RM1 per tonne increase in crude palm oil (CPO) price above RM1,500 a tonne. The windfall tax which replaces it will be imposed on the palm oil millers as follows:
(1) 7.5% for every tonne of CPO and palm kernel oil (PKO) exceeding RM2,000 per tonne for palm oil estates located in Sabah and Sarawak
(2) 15% for every tonne of CPO and PKO exceeding RM2,000 per tonne for palm oil
estates located in Peninsular Malaysia.

PKO also subject to windfall tax. We gathered from the official document that the windfall tax will also apply to PKO. This is contrary to earlier news reports that only CPO will be subject to the windfall tax.

Other technical issues.
The tax will be levied on average monthly CPO price published by MPOB and not the CPO price achieved by the respective planters. The new windfall tax applies to all palm oil planters, unlike the COSS, which exempted smallholders.


Comments

Earnings enhancement cut by 0.5% pts. In our earlier calculations, we assumed that the windfall tax will only be applicable to CPO. With PKO also subject to the windfall tax, we now estimate 2% pts savings for East Malaysian players instead of 2.5% pts, based on our CPO price assumption of RM3,350. The additional tax burden on Peninsular Malaysia estates will be 1.5% pts on the selling price instead of 0.5% pts as previously estimated.

This does not alter our earlier conclusion that the new windfall tax favours Malaysian planters with high exposure to East Malaysian estates and is negative for planters with large estates in Peninsular Malaysia. We recalculated the potential earnings impact and found that the impact of the new taxes on the earnings of the planters under our coverage ranges from -0.3% to +1.8% against our earlier expectation of 0.2-2.2% earnings enhancement.

Impact on government – higher collection. We estimate that the government will collect higher taxes under the windfall tax scheme as opposed to the COSS as the new scheme applies to all oil palm planters unlike the COSS which exempted planters with less than 40ha of estates. Secondly, the windfall tax covers PKO products, which currently fetch higher selling prices than CPO. Based on various assumptions laid out in Figure 6, we estimate the government’s collection under the windfall tax scheme to be 13% higher than the COSS scheme. Out of the RM2.9bn estimated tax collection under the windfall tax scheme, we estimate that only RM1.4bn will go towards subsidising the cooking oil in Malaysia based on a monthly usage of 70,000 tonnes. The remaining RM1.6bn could be used to fund other food subsidies and other government expenditure.

Valuation and recommendation

Planters’ share price corrected due to confusion over new windfall tax. The share prices of plantation stocks have more than recovered from the dip caused by initial confusion over the new windfall tax formula. Maintain OVERWEIGHT stance. We are not changing our earnings estimates or target prices for the planters in our universe as the impact is minimal. Also intact is our OVERWEIGHT call on the sector in view of the positive outlook for CPO price, driven by tight supply, high oil price and weather worries at key planting areas. The recent clarification on windfall tax, although slightly less positive than our initial estimates, has lifted uncertainty over the potential earnings impact from the higher tax. On top of that, there is potential upside to our CPO price and earnings forecasts should the current wet weather in the US midwest continue and affect new plantings as well as the development of corn and soybean plantings in the US. There is no change to our top picks in the sector – IOI Corp in the big-cap segment and Asiatic in the mid-cap category.

filed: Rooting out the windfall tax impact.pdf

棕仁油飆漲‧料納入暴利稅行列‧種植公司財測維持

2008-06-21 11:31

（吉隆坡）價格飆升的棕仁油步原棕油後塵，加入種植領域暴利稅行列，對種植領域是雪上加霜，但分析員認為，市場供應吃緊、美國潮濕氣候、高油價等因素，原棕油前景持續正面，有助緩和衝擊，維持種植領域“加碼”評級。

根據暴利稅法令，從7月1日起，暴利稅機制將取代原有的食品油津貼機制（COSS），並依據大馬棕油局平均原棕油售價，各別向東馬和半島州屬，每公噸價格超過2000令吉的原棕油和棕仁油，徵收7.5%和15%稅務。

聯昌研究指出，原有的食品油津貼機制並不包括種植面積少於40公頃的種植業者，政府通過落實涵蓋面較廣的暴利稅機制，並將近期價格飆漲的棕仁油納入其中，預計徵收的稅金所得，將較COSS高出近13%，達到29億令吉目標。

14億稅金津貼食品油

“我們預計稅金所得的14億令吉，將用來津貼每月平均7萬公噸的食品油用量，餘額則充作其他食品津貼和政府開銷。”

儘管棕仁油也難逃暴利稅，但預計新措施將對東馬種植業者有利，對在半島擁有大片種植面積的業者則是負面消息。

若原棕油價格達每公噸3350令吉水平，東馬種植業者將可節省2.0%稅務，相反半島業者則需負擔額外1.5%稅務，較先前預測的0.5%高，估計種植公司盈利將受衝擊，幅度介於下滑0.3%至上揚1.8%之間。

相關稅務較預期來得負面，但聯昌認為，這有助市場釐清真相，且對種植公司盈利衝擊不大，加上市場供應吃緊、油價高漲，以及美國潮濕氣候，令大豆種植受到影響，料積極推動原棕油價格走揚，前景依舊良好，維持各大種植公司盈利預測。

不同策略護盤
四大種植公司風險不一

大馬研究預計，上遊和下游領域賺益持續走揚，加上原棕油產量和併購成長帶動，盈利成長集中，唱好原棕油領域前景，維持2008和2009每公噸原棕油平均售價3500令吉目標。

儘管原棕油前景看好，但全球四大種植公司均採用不同的護盤策略，風險程度也各不相同，其中IOI集團（IOICORP,1961,主板種植組）採用預售3個月產量方式，而森那美（SIME,4197,主板貿服組）則是以1+2個月進行期貨交易。

新加坡豐益國際（Wilmar International）和印多福農業（Indofood Agri）則是根據市況和現月貨進行交易。

分析員認為，豐益國際的護盤策略最好，在原棕油價格年初上抵每公噸4000令吉價位時，便對原棕油價格感到憂慮，並預售2008財政年半數產量。在產量方面，IOI集團純鮮果串產量達到每公頃26至28公噸，加上低於市場平均的營運成本，無疑是這環節最大贏家。

但隨著現處於黃金週期的果樹樹齡漸老，以及印尼貢獻尚未顯著，在未來3至5年，新加坡豐益國際和印多福農業將取代IOI集團崛起成為強者，主要是他們的果樹組合平均樹齡尚淺，強勁產能可期。

豐益國際和印多福農業2008至2011財政年鮮果串複合成長率（CAGR）各別將達到7%，IOI集團和森那美則為2%和1%。

此外，豐益國際和印多福農業也是最積極購置地庫的公司，雙雙通過併購其他業者，擴大旗下種植面積。

雖然IOI集團在上遊的擴充計劃不如豐益國際和印多福農業般積極，但該公司正慢慢透過荷蘭鹿特丹的洛德斯克羅科蘭（Loders Croklaan），在美國和歐洲食品領域佔據一席位，並宣佈計劃投資2億美元在美國和歐洲興建新廠房。

豐益國際憑藉其在大馬、印尼和中國的龐大經濟規模，加上在原產品市場的良好判斷紀錄，料是其中最大受益者。不過，IOI集團在特殊油脂領域處在良好位置，有望從中“卡位”爭取成長機會。

大馬研究表示，雖然通膨壓力令人憂慮，但原棕油現較大豆油便宜17至19%，料可從食品公司可能轉向採用更廉價的食品油中獲益。

IOI上游領域具優勢

總結4家種植公司，大馬研究認為，IOI集團在鮮果串產量以及營運效益均比其他公司來得好，上游領域最具優勢；過去數年持續提高派息率，並落實資本回退、拆細股票、股票回購等計劃，在資本管理方面最具效率，但未來資本管理空間有限，主要是公司保留銀彈充作業務擴充用途。

森那美派息具吸引力

森那美則擁有最具吸引力的派息政策，主要歸功於公司大股東國民投資公司（PNB）鼓勵公司積極回退資金。

豐益國際市場延伸能力最強，印多福農業則憑藉其市場領導地位，以及龐大的市佔率，在印尼食品油市場最吃得開。

Potential supply shock form US Midwest flood 20080616

Cedar River in Iowa, US has burst its banks late last week with a total of 9 Iowa rivers are at or near record levels following heavy rainfalls. Cedar River, which also feeds into the Mississippi River, has already crested 12 ft above flood level. The US National Weather Service predicted crests of 10 ft above flood stage and expects the worst flooding in Missouri and Illinois along the Mississippi River in 15 years. Massive crop destructions in the US could be in the making. We believe the potential supply reduction of soybean oil from the US could amount to 3.6m tonnes, which will need to be met by palm oil. A sharp reduction in palm oil inventory appears inevitable, leading to a spike in CPO prices.

Maintain Overweight.
A repeat of 1993? This appears to be a potential repeat of the 1993 Great Mississippi Flood where massive crop destruction was experienced as the US Midwest is the key soybean and corn planting area in the US. Although rainfalls had slowed down since with flood areas around Cedar River to recede, meteorologists are expecting more rainfall from soon. Already Mississippi River broke its levees (堤岸) in 2 places on Saturday.

Global soybean supply to be negatively impacted. The US is expected to produce 72.4m tonnes of soybean this year or 24.6% of global production
(A: global production should be 72.4/24.6% ,which in turn to 294.31m tonnes)
, according to Oil World. At this point in time, planting progress has been slower than expected for both corn and soybean. The current condition is certainly not promising for planting and if we do experience a repeat of 1993 flood where it stretched all the way to September, both soybean and corn production from the US will be substantially produced this year. Back in 1993, total crop losses due to flooding or saturated fields exceeded 14m hectares. Soybean yield also fell by 17% while corn yield was down by 33%, according to US National Climatic Data Centre.

CPO price spike in the making. Early estimates suggest that crop destruction will be about 25% of total planted area which means an 18m tonne of soybean supply reduction from the US. At 20% crushing yield, this means a shortfall of 3.6m tonnes of soybean oil. Compared to Malaysia’s palm oil inventory of 1.9m tonnes, the shortfall in supply created by the US flood is certainly sizeable. Even if Indonesia has the same inventory level (which we doubt), meeting the soybean oil shortfall will mean palm oil inventory in the two top palm oil producing nations is wiped out. Hence, we should expect to see Malaysia’s palm oil inventory reduced sharply in the coming months, given that in the summer months, palm and soybean oil are near perfect substitutes. Palm oil prices have been extremely resilient despite the high inventory level. We reckon that if inventory level starts to fall, palm oil prices will climb drastically. If the shortfall in soybean oil from the Midwest flood truly amounts to 3.6m tonnes, a spike in CPO prices will be inevitable.

Yield still down in the best case scenario. Even before the Cedar River broke its banks, the USDA (A: United States Department of Agriculture) had already reduced its corn production estimate by 10% to 11.7bn bushels with yield estimate falling to 149 bushels per acre from 154 bushels last month as heavy rain wash away soil nitrogen content. We believe the lower USDA estimates has not taken into consideration a potential crop destruction from flooding.

Rush into corn planting next season. The flooding has pushed up corn prices more than it did for soybean as probability of planting corn has became much lower as corn season ends earlier than soybean. If the profitability spread between the two crops maintains at current level, it will greatly boost corn area next season. This will help to strengthen soybean and indirectly palm oil prices.

Maintain Overweight. The massive crop destruction in the US will be beneficial to palm oil producers. Y-t-d average CPO price stands at RM3,485/t based on West Malaysia MPOB price. We believe our expectation of RM3,500/t for this year could be well exceeded in the event of a price spike. CPO prices do have plenty of room to rise just by closing in on the discount of around $300/t to soybean oil. We continue to recommend to BUY IOI Corp (TP RM8.75), Asiatic Development (TP RM10.90), Kulim (TP RM13.80), IJM Plantations (TP RM5.95), KLK (TP RM18.55) and Golden Agri Resources (TP SG$1.37).

Figure 1: Corn profitability versus soybean suggests a rush into corn planting
next season


filed: Potential supply shock form US Midwest flood _20080616 OSK.pdf

美水災棕油或水漲船高‧種植領域加碼

2008-06-18 11:42

（吉隆坡）美國中西部州屬發生嚴重水災，料將破壞大量農作物，包括美國大豆油的潛在供應將減少360萬公噸，這需要原棕油填補，使棕油存量大幅度銳減，價格漲升勢所難免。

僑豐研究建議“加碼”種植業，而建議“買進”的種植股，包括IOI集團（IOICORP，1961；主板種植組）、亞地種植（ASIATIC，2291；主板種植組）、居林（KULIM，2003；主板種植組）、怡保種植（IJMPLNT，2216，主板種植組）和吉隆坡甲洞（KLK，2445；主板種植組）。

棕油價全年平均達3500令吉

上週美國愛荷華州遭洪水侵擊，經過連綿豪雨後，該州鍚達河崩堤，共有9條河流的水位落在或是接近歷史新高水平。鍚達河水位比洪水水位高出12呎，密蘇里州及伊利諾州也波及，預料將出現15年來最嚴重水災。

僑豐說，美國農作物產量受到影響，這對棕油種植商有利。目前為止的原棕油平均價格落在每公噸3485令吉。若是價格因美國水災因素大漲，相信今年平均價格將可達到3500令吉水平。

若是棕油價格比大豆油價格每公噸折價300美元，原棕油尚有很大上揚空間。

僑豐指出，這可能是1993年美國密西西比大水災重演，使大量農作物被破壞，因為美國中西部為主要的大豆及玉米米種植區。

雖然鍚達河一帶洪水災區已略為消退，不過美國國家氣象服務部預測會有更多雨水侵擊，包括密西西比河已有兩處河岸崩堤。

美玉米大豆產量大減

根據食油世界數據，今年美國預測生產7240萬公噸大豆，或佔全球產量24.6%。目前為止，美國玉米及大豆種植進展緩慢，若1993年水災事件重演，延伸至9月份的話，目前的情況肯定不受看好，使美國玉米及大豆產量大量縮減。

僑豐表示，回顧1993年災情，總共有1400萬公頃的農地受到水災影響。大豆產量下跌17%，及玉米產量則削減33%。這次初步估計美國25%的農作物土地受到水災影響，包括大豆供應減少約1800萬公噸。若以20%搾油率計算，受影響減少的大豆油即達到360萬公噸。比較大馬棕油庫存量僅為190萬公噸。

假設印尼擁有與大馬同等數量的棕油存庫，這意味著今次美國因水災破壞減少的大豆油產量，幾乎完全抵銷大馬與印尼這兩個主要棕油生產國的棕油存量。

大馬棕油存量數月內料劇減

有鑑於此，預料未來數個月的大馬棕油存量將劇減，特別是美國中西部的水災導至大豆油產量重挫360萬公噸，預料原棕油的價格將會大漲。

至於美國玉米產量方面，尚未爆發水災前，美國當局即預測玉米產量會減少10%至117億蒲式爾，而每英畝的產量則從154蒲式爾降至149蒲式爾，主要是土地遭雨水沖淡影響之故。

financial review of year 2007

OPERATIONAL REVIEW
The Plantation Division continued to be the main performer and contributor to the KHB Group’s revenue. The Group’s Fresh Fruit Bunches (“FFB”) production improved by 10.95% to 223,058 metric tonnes (“mt”) in 2007 from 201,046 in 2006 due to larger areas achieving maturity in the Sandakan and Tawau estates. The average yield per hectare for its Sandakan and Tawau estates in 2007 was 26.26 mt and 10.30 mt respectively, against 24.48 mt for the Sandakan estates and 10.79 mt for the Tawau estates in 2006. KHB’s average prices for sales of Crude Palm Oil (“CPO”) and palm kernels were RM2,357 and RM1,310 per mt respectively in 2007 compared to RM1,466 and RM823 per mt respectively in 2006. KHB’s average oil extraction rate was 20.56% and palm kernel extraction rate was 4.73% in 2007. The Plantation Division achieved an improved revenue of RM131.3 million for the year under review resulting from the sustained surge in commodity prices compared to RM75.3 million recorded in the previous year.

The Group reaped a significant increase in its profit by recording a profit before tax of RM49.0 million in 2007 as a result of the improved yields achieved by the Plantation Division and uptrend in CPO prices, compared to a loss before tax of RM595,000 in the previous year.

DIVIDEND
In view of the future commitment of KHB Group pursuant to its Restructuring Scheme as well as the past losses incurred by the Group, the Board does not propose any dividend payment for the year ended 31 December 2007.

RESTRUCTURING SCHEME
To enable the KHB Group to focus on and further strengthen its Plantation Division as its core business, the Board is still continuing with its efforts to divest the Group’s last remaining non-core business, namely its stockbroking business in Sabah, pursuant to its Rationalisation program.

Subsequent to the signing of a conditional Sale and Purchase Agreement on 25 April 2007 between Jeffa Construction Sdn Bhd (“JCSB”), a 51% subsidiary of KHB Development Sdn Bhd which is in turn a wholly-owned subsidiary of the Company, and Mahabuilders Sdn Bhd to dispose the landed properties in Johor Bahru known as Pandan Place Project comprising the wholesale market and eight pieces of contiguous leasehold land titles together with the rights, obligations and liabilities under the Privatisation Agreement dated 17 October 1994 on an as-is-where-is basis for a total consideration of RM50 million, approvals of Majlis Bandaraya Johor Bahru, the Johor Bahru State Government, shareholders of JCSB and KHB and other relevant authorities had been obtained. The disposal of the Pandan Place Project was completed on 25 July 2007.

During the financial year ended 31 December 2007, the following classes of Redeemable Convertible Secured Loan Stocks (“RCSLS”) have been redeemed and Irredeemable Convertible Unsecured Loan Stocks 2003 / 2010 (“ICULS”) converted into fully paid-up ordinary shares of RM1.00 each in KHB, pursuant to the Restructuring Scheme undertaken by the KHB Group in 2003:-



Interest on the nominal amount of 1% Irredeemable Convertible Unsecured Loan Stocks 2003 / 2010 has been paid semi-annually on 10 February and 10 August respectively during the year 2007.

None of the 57,618,375 Warrants was exercised during the financial year ended 31 December 2007.


OUTLOOK FOR THE FUTURE
Cultivation of oil palm plantations and palm oil processing will remain the core business of the KHB Group, although it will be necessary to suspend milling operations for the most part of the current year by Syarikat Kretam Mill Sdn Bhd located at Bode Estate, Sandakan, to allow major overhaul and upgrading of the mill which was constructed 26 years ago.

Production for the first quarter of year 2008 amounted to 49,423 tonnes FFB, including 12,812 tonnes from Silimpopon Estates, being only 0.276% short of crop harvested during the first quarter of the previous year, and it is anticipated that Silimpopon Estates located in the Tawau region will make an increased contribution to total FFB harvested by the Group as further areas of oil palms reach maturity during the year.

Syarikat Kretam Mill Sdn Bhd, located at Bode Estate, Sandakan region, processes FFB from the Group’s Sandakan and Kinabatangan estates as well as some FFB purchased from nearby outside sources. Total throughput for 2007 amounted to 146,949 tonnes FFB which was 16.83% less than the previous year, and outside purchases of FFB accounted for 10.78% of total purchases of FFB compared to 10.71% for year 2006. FFB harvested from the Group’s Silimpopon Estates was sold to palm oil mills in the vicinity.

Although work has not yet started on the construction of the Syarikat Kretam Mill Sdn Bhd’s Palm Oil Mill at Sg. Silimpopon to process FFB from the Group’s estates there, planning has reached an advanced stage and it is anticipated that preliminary work will commence on site during the current year.

Given favourable commodity prices and continued satisfactory crops throughout the year, plus an adequate supply of plantation employees and sufficient rainfall, the Plantation Division of KHB can be expected to operate profitably during the current year despite rising costs.


CORPORATE SOCIAL RESPONSIBILITY
KHB Group, being a caring employer which understands the needs of its employees, gives high priority to the welfare of the employees, especially those working and living in the estates. We continue to provide better housing to the estate employees whereby a housing replacement plan has been implemented to replace older houses in Sandakan region whilst good standard houses are being built in our Silimpopon estates in Tawau region. At the same time, recreation facilities are also being up-graded.

The Company continued to invest in the upgrading of knowledge and skills of its employees through formal and on-the-job training during the past year.

Health and Safety at the work place in the estates remains a high priority. In 2007, we recorded over 8,400 hours on training related to Health and Safety for our estate employees. This had yielded positive results of reducing accidents at work by 67% compared to 2006.

KHB continues to provide training opportunity on its estates for students from local universities and other training institutions when requested.

Blood donation campaign is a regular activity for the estate management. In 2007, we donated over 200 pints of blood for Duchess of Kent Hospital in Sandakan.

The Board and Management are committed to protect the environment through good management of estate practices. The introduction of cattle-rearing projects in both the Sandakan and Tawau regions help to reduce the usage of herbicide.

Realising the inefficiency of our current oil mill in Sandakan region, we are in the process of a major up-grading exercise to modernize the mill and turn it into an environmental-friendly mill where we aim for zero waste water discharge and the recycling of mill by-products.

In Silimpopon, Tawau, we have plans to enhance those areas which we have left unplanted and the riverine reserve with fast growing trees.

KHB’s subsidiary, Innosabah Securities Berhad (“ISB”) accepted 2 students for a 3-month attachment each during the past year and paid them training allowances. Similarly, Innosabah Options Futures Sdn Bhd, subsidiary of ISB, also accepted a student for a 3-month attachment with paid training allowance.

During the past year, ISB also made donations to Kian Kok High School, Tabika Perpaduan Terawi Putatan and Persatuan Hemodialisis Kinabalu for their fund-raising campaigns, to Sabah Family Planning for the purchase of an ultrasound scanning system and to Sabah Society For The Blind for their promotion and creation of opportunities for education, training and employment.

ISB also sponsored electrical goods as gifts for its client’s annual dinner, a full-page advertisement in the Sabah Tshung Tsin Alumni Association’s souvenir magazine, embroidery on 200 hand towels for the golf tournament organised for charity by Kelab AIM Malaysia (Sabah Branch) to help women and children in crisis in Sabah and the basketball tournament for young people organized by Sabah Friendship League. ISB also sponsored a dinner organized by its sports club for its staff during the Harvest Festival.

12-06-2008: Asiatic to develop palm plantation in Indonesia

KUALA LUMPUR: Asiatic Development Bhd’s wholly-owned subsidiary Mediglove Sdn Bhd has proposed joint ventures to acquire and develop 45,000ha of oil palm plantation at Kabupaten Kapuas in Kalimantan Tengah, Indonesia.

In a statement yesterday, it said Mediglove would subscribe for six million shares in Asianindo Holdings Pte Ltd for US$9 million (RM29.25 million) cash while Kara Agri Pte Ltd would subscribe for 3.999 million shares at US$1 each.

Mediglove would also subscribe for 3,000 shares in Gaiaagri Services Ltd for US$3,000 while Gaiaagri Holdings Ltd would subscribe for 6,999 shares at US$1 each.

“Mediglove will initially subscribe for 60% equity interest in Asianindo, and progressively increase its equity interest to 77% in line with additional equity injection of US$37.75 million,” the company said.

It said Kara would have a 40% interest in Asianindo, and pare it down to 23% at a later stage.

Under the agreements, Asianindo would buy, develop and own the oil palm plantation and palm oil mills in Kabupaten Kapuas while Gaiaagri Services would be the sole and exclusive provider of the management services to Asianindo for the cultivation and development of oil palm plantation and setting up take palm oil mill for five years.

“By outsourcing the cultivation and development of oil palm plantation and establishment of palm oil mill of the proposed JV to Gaiaagri Services, Asiatic is able to accelerate its expansion and pursue its growth strategy in increasing its footprint in oil palm cultivation in Indonesia and other parts of the world,” it added.

11-06-2008: TSH: A modestly valued plantation stock

TSH Resources (RM2.96) is an attractively valued, mid-sized plantation company with positive longer-term growth prospects.

Thanks to rising demand and high selling prices for crude palm oil (CPO), the company’s earnings are likely to remain relatively robust in the near to medium term. We estimate net profit will grow at an average compounded rate of about 17% annually in 2008-2010. By comparison, the shares are currently priced at forward P/E only 8.9 times, suggesting room for further capital gains.


Solid 1Q08 earnings results
TSH’s financial results for 1QFYDec2008 reflects the upbeat outlook for the plantation business while contributions from its two other core businesses - timber and wood products as well as cocoa processing - were steady.

Turnover was up by 68.3% year-on-year (y-o-y) to RM284.1 million on the back of sharply higher contributions from the plantation arm while operating profit grew 46.5% y-o-y to RM40.8 million in 1Q08.

Plantation was the biggest contributor - sales more than doubled y-o-y while operating profit was up by some 83% over the same period. Sales and operating profit accounted for 73% and 78% of TSH’s total turnover and earnings, respectively.

The strong performance can be attributed to both higher CPO prices as well as higher throughput. Selling prices averaged at around RM3,100 per tonne in 1Q08, well above the RM1,900 per tonne average in the previous corresponding quarter. Meanwhile, the company processed about 30% more fresh fruit bunches (FFB) y-o-y - about 264,000 tonnes compared to 204,000 tonnes in 1Q07.

Contribution from its 50%-owned associate company, palm oil refinery TSH-Wilmar, also rose sharply to RM9.4 million from RM3.6 million in 1Q07. In all, net profit improved by 79.6% y-o-y to RM30.8 million in 1Q08.

FFB increases to underpin growth
We expect the company will continue to fare well in the near to medium term. Plantation will remain the primary earnings driver for the company, underpinned by strong growth in FFB production.

TSH has land bank totalling 67,841ha, of which about 29% is currently planted. It has a very young palm oil age profile - only about one-third is in the prime production ages of 7-15 years. About 62% of the palm oil trees will mature within the next three years.

Right now, the bulk of FFB processed are purchased from external parties. TSH owns four palm oil mills with a total processing capacity of 1.5 million tonnes a year. But as its own plantations mature, yields and profitability should gradually improve.

We estimate FFB output from the company’s plantations will grow at a compounded rate of about 27% annually in 2008-2011. Two new mills are on the drawing board, slated for completion in 2009-2010, to cater to rising FFB output from its newly matured landbank.

At the same time, TSH will continue to plant up in its remaining landbank, primarily in Indonesia - an estimated 2,000-2,500ha by end-2008 and beyond this, up to 10,000ha annually. If all goes to plan, its entire landbank will be fully planted by 2013.

Current CPO prices appear sustainable
CPO prices have held up fairly well in the past two months, after falling off their peak in early March. Prices averaged at around RM3,400-RM3,500 per tonne in the first four months of the year. The benchmark CPO futures contracts are trading at around RM3,600 per tonne currently.

It appears that prices at current levels are sustainable in the near term. Worldwide consumption of edible oils is still on the rise. There is also competing demand for oilseeds and commodities like corn to be used for the production of biofuel, which is supported by record high crude oil prices and government subsidies. Land is scarce and global supply is expected to remain tight.

Better off with new windfall tax
TSH should be better off with the newly-announced windfall tax, to be levied on all palm oil planters, in place of the existing cooking oil stabilisation scheme.

All of the company’s planted land in the country is located in Sabah, where the tax rate is half of that levied on planters in the peninsula. Under the new windfall tax scheme, a 7.5% tax on CPO output works out to be a lesser amount compared to that payable under the cooking oil stabilisation scheme structure.







research by insisderasia and paste from authorised publisher,theedge.


Note: This report is brought to you by Asia Analytica Sdn Bhd, a licensed investment adviser. Please exercise your own judgment or seek professional advice for your specific investment needs. We are not responsible for your investment decisions. Our shareholders, directors and employees may have positions in any of the stocks mentioned.

Date Announced 12/06/2008

Proposed acquisition of a new wholly-owned subsidiary

Pursuant to paragraph 10.07(a)(In the case of a transaction where the percentage ratio is less than 5%:-) of the Listing Requirements of Bursa Malaysia Securities Berhad, the Board of Directors of Hap Seng Plantations Holdings Berhad [“the Company/Purchaser”] is pleased to announce that the Board has on even date approved of and accordingly, the Company has on even date entered into a conditional sale of shares agreement [“said SSA”] to acquire the entire issued and paid-up share capital of of Bumilaju Construction Sdn Bhd (667412-H) [“Bumilaju”] comprising 1,000,000 ordinary shares of RM1.00 each [“Sale Shares”] at a purchase consideration of Ringgit Malaysia Twenty Seven Million only (RM27,000,000.00) on the terms and conditions contained in the said SSA. Upon completion of the said SSA, the Company will assume a RM15,000,000 liability owing by Bumilaju.

Bumilaju will become a wholly-owned subsidiary of the Company upon completion of the said SSA.

Bumilaju is a private limited company incorporated in Malaysia on 27 September 2004. It has an authorised share capital of RM1,000,000.00 divided into 1,000,000 ordinary shares of RM1.00 each. Bumilaju is principally involved in land development and construction, general trading and plantation of agricultural crops.

Presently, Bumilaju is the beneficial owner of the following two (2) parcels of plantation land fully planted with oil palm of 6 to 7 years of age:-
i) all that parcel of land held under Country Lease No. 225326170, measuring approximately of 403.1 hectares;
ii) all that parcel of land held under country Lease No. 225319013, measuring approximately 323.6 hectares,
both situated at Kampung Datu, District of Kota Marudu, Sabah [the “said Land”].

Bumulaju also has an interest in a land application for 200 acres of land adjoining to the said Land under the Land Application (LA) No. 20-07222044 fully planted with oil palm of 2 to 4 years of age.

The proposed acquisition of Bumilaju is in the ordinary course of business of the Company with the objective of expanding its plantation activities.

To the best of the knowledge of the directors, none of the directors or major shareholders or persons connected to the directors or major shareholders of the Company has any interest, direct or indirect, in the Proposed Acquisition.

C c: Securities Commission




analysis by author

estimate book value of land: 27m + assuming debt by 15m = 42m
discounted value of immature land concern over the future development expenditure may accur: 200/2.47 x RM3500 = RM283400

total land in ha: 403.1 + 323.6 + 200/2.47 = 807.67ha

EV/ha = (42m+RM283400) / 807.67
EV/ha = RM52350

conclusion
estimate acquisition P/E is 8 and is not compelling,becasue this is offset by transparency of information.

克隆的简介

克隆是英文"clone"或"cloning"的音译，而英文"clone"则起源于希腊文"Klone"，原意是指幼苗或嫩枝，以无性繁殖或营养繁殖的方式培育植物，如杆插和嫁接。 如今，克隆是指生物体通过体细胞进行的无性繁殖，以及由无性繁殖形成的基因型完全相同的后代个体组成的种群。克隆也可以理解为复制、拷贝，就是从原型中产生出同样的复制品，它的外表及遗传基因与原型完全相同。 时至今日，“克隆”的含义已不仅仅是“无性繁殖”，凡是来自同一个祖先，无性繁殖出的一群个体，也叫“克隆”。这种来自同一个祖先的无性繁殖的后代群体也叫“无性繁殖系”，简称无性系。简单讲就是一种人工诱导的无性繁殖方式。但克隆与无性繁殖是不同的。无性繁殖是指不经过雌雄两性生殖细胞的结合、只由一个生物体产生后代的生殖方式，常见的有孢子生殖、出芽生殖和分裂生殖。由植物的根、茎、叶等经过压条或嫁接等方式产生新个体也叫无性繁殖。绵羊、猴子和牛等动物没有人工操作是不能进行无性繁殖的。科学家把人工遗传操作动物繁殖的过程叫克隆，这门生物技术叫克隆技术。

complete in http://baike.baidu.com/view/1364.htm

brief copy-oil palm age and productivity

Oil palm trees require approximately three years to mature and do not reach peak production of fresh fruit bunches until 8 years after planting. Their peak production years range from their 8th year until their 17th year, after which production of fruit gradually declines. As of June 30, 2007, the weighted average age of its plantations was about 7.8 years, and the substantial majority of palm trees are entering into prime production age. Production of fruit bunches increased from 440,550 tons in 2001 to 1,120,765 tons in 2006, an average yield of about 20 tons per hectare.

Detailed Product Description
The oil palm tree is a tropical plant which commonly grows in warm climates at altitudes of less than 1,600 feet above sea level. There is one species, the Noli or Elaeis oleifera (H.B.K) Cortes which is native of America; another species is Elaeis guineensis Jacq. which originates from the Gulf of Guinea in West Africa (hence its scientific name) and better known as the African oil palm.

This tree produces one of the most popular edible oils in the world a versatile oil of superb nutritional value. It is the most prolific of all oil plants and in commercial terms the one which offers major prospects of development.

Oil palm is normally monoic; in other words, it has both male and female flowers on the same tree. It produces thousands of fruits, in compact bunches whose weight varies between 10 and 40 kilograms. Each fruit is almost spherical, ovoid or elongated in shape. Generally the fruit is dark purple, almost black before it ripens and orange red when ripe.

Some 40 leaves crown the stately column of the oil palm and as it reaches middle age its leaves spread out - between 10 and 25 feet in length and almost parallel to the ground. Each leaf has short thorns at its base and about 250 leaflets in an irregular pattern on both sides of the petiole. Thus, these leaflets are not continuous like the tines of a feather. In fact, the irregular appearance of the frond is one of the characteristic features of this species.The fruit has a single seed the palm kernel protected by a wooden endocarp or shell, surrounded by a fleshy mesocarp or pulp. This fruit produces two types of oil: one extracted from the pulp (palm oil) and the other from the kernel (palm kernel oil).

Its stem stands straight in the form of an inverted cone. In the wild it may grow to heights of one hundred feet and more. The stems of young and adult plants are wrapped in leaves which give them a rather rough appearance. The older trees have smooth stems apart from the scars left by the leaves which have withered and fallen off.

Primary roots grow downwards from the base of the palm and radiate outwards in a more or less horizontal direction close to the surface of the ground. Their length and depth depend on the type of soil.

Oil palm plants have bright male and female flowers which bear fruits by the thousands. Its fruits are round, ovoid or elongated in shape which make up compact bunches weighing between 10-40 kgs. Before ripening, palm fruits are dark purple, almost black, and when they become ripe under a tropical sun turn a bright, colorful orangey-redcolor. Inside each fruit is a single seed, the kernel or palm kernel,protected by a woody endocarp or shell which is surrounded by a fleshy mesocarp or pulp. Both the pulp and kernel produce large quantities of oil. Two types of oil are produced, palm kernel oil from the kernel and the palm oil extracted from the pulp.
he stem of the palm tree is straight and the plant forms the shape of an inverted cone. Young palms have rough, jagged stems. Later older palms have smoother stems but have scars left behind as some 40 leaves wither and fall off, giving the stems a layered and segmented texture.

When the oil palm tree has reached middle age, its leaves lie almost parallel to the ground, between 3- 6 meters long. Each leaf is made up of some 250 linear follicles, which grow out of the sides of its stalk in an irregular pattern. The messy and disorganized appearance of the leaves is a special feature of the oil palm.

The oil palm is a perennial tree, normally lasting more than 50 years. But after 20-30 years, the oil palm is difficult to harvest because of its height. Normally at this stage, plantations are cleared out and replanted.

Cultivating oil palm not only requires the right climate and soil. Obtaining maximum yields at each production stage also depends on the quality of seeds used, a rigorous selection process of seedlings in the nursery, good soil preparation before seeds are planted, the setting up of plantations correctly and the right use of fertilizers.

Oil palm plantations require intensive labor and much care. Palm trees need to be protected and nurtured carefully so that they grow, develop and reach their maximum yields as quickly as possible. Good plantation management also involves protecting the oil palm throughout its lifespan and ensuring that other crops do not take away the water, light and soil nutrients it needs. The oil palm also needs to be protected against pests and diseases and requires the right amount of water and nutrients when necessary. Finally, it is important that leaves and bunches are cut carefully so as not to damage the plant.

A varied labor force with different levels of expertise and experience work on oil palm plantations. The way fruits are harvested, transported and processed all affect the quality of oil produced in the end.

The design of a plantation, including the lay out of its lots, paths and canals and the site of a palm oil mill, all play an important role in oil palm cultivation, including how fruits are harvested and transported to the mill.

APPLIED AGRICULTURAL RESOURCES SDN BHD

新科技研究油棕

世界最大的複製油棕實驗室，昨日正式開幕。這家位于雪州依約，佔地3萬5000平方尺的“組織培育實驗室”（Tissue Culture Lab），由Applied Agricultural Resources有限公司經營。 此項實驗採用最新科技，進行油棕組織培育複製，不僅有效縮短油棕樹成熟期，也提供更長的收成經濟周期。據瞭解，每公頃棕油園可生產10.6噸棕油，比一般園坵高出20%至25%。這家化驗室耗資700萬令吉興建，每年可生產高達100萬棵油棕複制幼苗。Applied Agricultural Resources有限公司由國內兩家主板上市公司寶實得控股(bstead)，以及吉隆坡甲洞公司(klk)聯合經營。


培育幼苗
油棕種植也邁向現代化，實用農業資源有限公司通過基因複製技術，在瓶罐內培育油棕幼苗。

認識品種
配合最大油棕組織培育實驗室開幕禮，主辦單位也展出不同品種油棕果實切片，讓公眾更瞭解國內油棕品種。

盛產油棕
馬來西亞熱帶氣候最適合油棕生產，我國也是世界主要出口棕油國家之一。
人工繁殖
油棕幼苗率先在經過溫度調較的花圃內繁殖，在成長到特定階段時，再移到空地種植，每株幼苗都是寶。


#圖片解說
改良基因研究中心生產線技術人員，正在忙著培育油棕幼苗，改良其基因。

油棕果實不同重量與大小的果實，所能生產的棕油不定，主辦單位直接展覽實物，讓參觀者自行比較。
清理根部
清理油棕幼苗根部，挑出潰爛部分，確保油棕組織不會壞死，功虧一簣。

研究中心坐落在雪州雙溪毛糯的實用農業資源有限公司，擁有一所現代化研究中心，以現代化與大量培植油棕。
幼苗分類
技術員正分類不同天數與種類的幼苗，希望每株幼苗都得到最好照料，健康成長。








http://www.aarsb.com.my/LatestNews/AARNews/TCOpenAgroworld.html
http://www.aarsb.com.my/LatestNews/AARNews/TCOpenAgroworld_Chi.html




The production of AAR oil palm clone is No. 1 in Malaysia (Dr. Chee Kheng Hoy FISP)

Note: This article is written by Dr. Chee in mandarin and published by Agroworld, Issue No. 201, March 2008, Kuala Lumpur: 24-26. Agroworld is a Chinese magazine for farmers. Please read the original article . To subscribe to Agroworld, please email or contact Agroworld Enterprise, No. 10, Jalan 3/18D, Taman Mastiara, Off Jalan Ipoh Bt 5 1/2, 51200 Kuala Lumpur, Malaysia. Tel: 603-62500975 / 0972 / 0915

(Translated by Soon, S.H.)

AAR Tissue Culture Laboratory can produce 1 million seedlings of oil palm clone yearly, which is the largest production in Malaysia. AAR oil palm clone is able to produce up to 10.6 t/ha/yr of crude palm oil which is 20-25% higher than the yield of conventional seedlings. Besides that, AAR oil palm clones have shorter maturity period and thus, prolonged economic lifespan. Due to their shorter height, they are easier to harvest also.



On 17 th January, AAR Deputy Director of Research, Mr. Goh Kah Joo came to fetch me early in the morning to attend the opening ceremony of AAR tissue culture laboratory in Ijok, Selangor. The Captains of many plantation companies attended the ceremony including Tan Sri Lee Shin Cheng from IOI and Senior Executives from Indonesian plantation companies. Before the opening ceremony, I chat with some friends from the planting industry regarding election issues and the phenomenon of the highest palm oil price. I asked a lady who managed her family palm oil mill and oil palm estate on how she spent so much income and what was the highest price of palm oil per tonne that she sells? She was shy to answer the first question and the answer for the second question was RM 3387. This was admirable indeed.

The challenges of palm oil production

I hardly listened to the two speeches by YB Datuk Peter Chin Fah Kui, Minister of Plantation Industries and Commodities on the same day, i.e. one during the AAR tissue culture opening ceremony in the morning and another lecture during MSSA dinner. The contents of both speeches were about the challenges faced by oil palm and their solutions.

According to the minister, various challenges were faced by the palm oil industry in Malaysia. These challenges included stagnating production rate, low quality and high transportation cost especially when compared to Indonesia. The challenges by non-government organizations: oil palm plantings destroy environmental ecology, threaten the life of orang utan and so on. Minister said that our oil palm advertisement in BBC had also been terminated.

AAR is owned by two public listed companies, Boustead Holdings Berhad and Kuala Lumpur Kepong Berhad on a 50:50 share basis. The minister complimented that the combined resources from both companies resulted in the best economic benefit. AAR is advanced in R&D and directly gives chances to young scientists to develop their capabilities. There are 140 employees working in the laboratory alone.

The main expenditure of tissue culture laboratory is electricity due to sterilization and long period of lighting on ortets. Consequently, the minister said that 50% rebate on electricity bill will be given to R&D laboratory.



25% higher yield than conventional seedlings

AAR Tissue Culture Laboratory can produce 1 million seedlings of oil palm clone yearly, which is the largest production in Malaysia. 90% of the ramets are planted in AAR principals' estates while the remaining 10% are sold to AAR advisory clients.

#pic
AAR ramets have been planted in 40 estates in Peninsular Malaysia, Sabah and Sarawak with a combined hectarage of 8000. This is the largest planting of oil palm ramets in the world.
pic#

According to Dr. Kee Khan Kiang (Director of Reseach, AAR), AAR oil palm clones are able to produce up to 10.6 t/ha/yr of crude palm oil which is 20-25 % higher than the yield of conventional seedlings. Besides that, AAR oil palm clones have shorter maturity period and thus, prolonged economic lifespan. Due to their shorter height, they are easier to harvest also.
AAR ramets have been planted in 40 estates in Peninsular Malaysia, Sabah and Sarawak with a combined hectarage of 8000. This is the largest planting of oil palm ramets in the world.


The brand name of AAR oil palm clones is AAR Vitroa. The brand name of Dumpy. Yangambi. AVROS (DxP seed from selected good quality of planting materials) is called AAR Hybrida. The brand names of Vitroa and Hybrida come from scientific term : Vitro and Hybrid. AAR creatively added an “a” at the end of these two words to form new terms.

I am familiar with AAR researchers. The research work is very flexible and some interesting stories always happened. For instance, the short form of AAR can refer to commercial company Applied Agricultural Research Sdn. Bhd. or research company Applied Agriecological Research Sdn. Bhd. The expenses of the latter company are tax deductable from its parent company.
In year 2007, I attended the opening ceremony of FELDA tissue culture laboratory at Nilai, Selangor. Now I attended the opening ceremony of AAR tissue culture laboratory. The chief executive officer from IOI Plantation Tan Sri Lee Shin Cheng said he neglected the development of oil palm tissue culture. Although IOI tissue culture laboratory is the most advanced laboratory in earlier years but today it can only produce 200 thousand oil palm clones per year. The former chief executive officer from MPOA Mr. Chandran said the truth on high yielding oil palm is 50% dependant on genetic factor of high yield from planting materials while the other 50% on estate management.

#pic
AAR Tissue Culture Laboratory can produce 1 million seedlings of oil palm clones yearly, which is the largest production in Malaysia.
pic#

Oil palm planting enters new century

Oil palm planting materials from normal DxP become better quality DxP (hybrid) and clones. Oil palm planting industry in Malaysia has already entered the new century. Let's imagine a laboratory can produce 1 million seedlings of oil palm clones and plant 6000 hectares of clonal palms. Based on the basic oil yield of 5 t/ha, clonal trees have 20% higher yield, i.e. 1 tonne higher oil per hectare. Based on RM 2000 per tonne, 6000 ha of clonal palms are worth RM 12,000,000. From harvesting for 15-20 years, the total income of 20 years is RM 240,000,000.

Palm oil industry in Malaysia is currently the number 2 export commodity in the country. According to the latest statistics report, from January-October 2007, the export of oil palm was 7.2% of the total export in Malaysia, closed to RM 36,000,000,000. Oil palm industry provides job opportunity directly to 500 thousand people and indirectly to 2 million people. Oil palm plays an important role in Malaysia economy.


The first step in tissue culture is ortet selection. Because environmental factors influence the production rate, it is not easy to determine the high yielding ortets. Furthermore, the hereditary percentage of high yield is low and human error can also occur during testing for high yield. Thus, ortet and ramet may be different.


In order to get good quality ortet, it is best for a plantation company to have its own selection of planting materials so that we can select potential ortets from the oil palm with different planting materials. Hence, we only select good quality materials for tissue culture to increase the efficiency. Although yield is an important factor during ortet selection, but it is important also to select the tree with many bunches and high oil extraction rate. This is because these two factors have higher hereditary and thus they are not easily influenced by the environment.

#pic
The first step in tissue culture is ortet selection. Because environmental factors influence the production rate, it is not easy to determine the high yielding ortets.
#pic


High price yet high demand
There are more than 10 oil palm tissue culture laboratories in Malaysia with a production rate of 2 million seedlings of oil palm clones per year. Although the cost and price are high, the demand is still high and most are planted in their own companies' fields. Every tissue culture laboratory is currently increasing their production and hopefully, they will achieve a total production of 4 millions in 2010.

#pic
There are more than 10 oil palm tissue culture laboratories in Malaysia with a production rate of 2 million seedlings of oil palm clones per year.
#pic
Besides United Plantations Berhad, a few plantation companies produce this type of seeds.
pic##

MPOB is willing to sponsor the producers of clones and planters who planted them in order to encourage both parties to promote the production and planting of oil palm clones. Due to the high yield of oil palm clone and high value of fresh fruit bunches, the profit for planters is high.

According to the estimate of MPOB, the areas planted with clones in 2005 are about 29,000 hectares. According to the analysis of age of oil palm plantings in Malaysia, 22% or 880,000 ha have to be replanted and 120,000,000 oil palm seedlings are needed. To culture such a large amount of oil palm clones will be time consuming and the solution is to produce clonal seeds. This has been mentioned in Agroworld issue no. 199. Clonal seeds come from the selected parents which has been cloned. The first generation seeds from parent clonal palms are called bi-clonal F1 seeds. Besides United Plantations Berhad, a few plantation companies produce this type of seeds. The yield of these planting materials is approximately 7-8 t/ha/year.

The abnormality of oil palm clones is always there but the severity is lower if compared to the past. According to researcher from FELDA, the clones need to be checked carefully when they are in the tissue culture laboratory and nursery. Any abnormal clones need to be discarded immediately to reduce abnormality in the field to at most 4%.

Oil palm clones are precious. They should be planted in optimal area for oil palm growth. This includes good soil, sufficient rainfall, with legume cover crop for protecting the soil and providing nitrogen, weeding, manuring, pest and disease management. Sufficient and balanced fertilizer is very important. Research has shown that the fertilizers needed by oil palm clones and normal DxP palms are the same.


Harvest after two years

Under proper growth environment, oil palm clones can be harvested two years after planting. The production of fresh fruit bunches for the first two years is 30% higher than normal DxP. The experiment to compare different types of oil palm clones has shown that the yield for half of the clonal materials is 8 t palm oil per ha per year and up to a maximum of 8.8 t.

According to the report from FELDA, there is a difference between yield and origin of ortet. The yield of Yangambi material is 22% higher than DxP, 30% higher than NIFOR, 17% higher than La Me and 14% higher than the rest.

It is very important to increase the yield because more oil means higher net profit if the costs for harvesting, transportation and oil extraction remain the same.


作者注明：相信是新品种的体积较小，需要的面积比较小，因此可以栽种166.66棵/每公顷(density)。按文中解释，马来西亚的平均density是136。