Who's who in brief

Malaysian Business, Jan 1, 2007
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BOUSTEAD Holdings Bhd
The total landbank of the group under cultivation in 2005 was 78,739 ha, out of which oil palm continued to be the predominant crop accounting for 78,238 ha. The group intends to ride on the biofuel trend and has recently announced that it is setting up a joint venture with CTI Biofuels Malaysia LLC on a 55:45 basis to construct and operate a processing plant for the production of palm oil-based biodiesel fuel. The plant is expected to produce five million gallons of biodiesel per year with an estimated project cost of RM24.0 million.

Far East Holdings Bhd
Far East Holdings is a small pure palm oil player with a small plantation size of just around 12,900 hectares. The group is mainly linked to the Pahang State Government through Perbadanan Kemajuan Negeri Pahang, which has a 19.1% stake in the company. Its other major shareholders are Prosper Trading Sdn Bhd (27.0%) and Lembaga Kemajuan Perusahaan Pertanian Negeri Pahang (9.6%).

The group recently had a one-for-one bonus issue completed in November 2005, which increased its paid-up share capital from RM66.52 million to RM133.10 million. The group has also entered into a joint- venture project with Rangkaian Delima Sdn Bhd to develop 2,833 ha of oil palm plantation land, which is to be fully planted by the middle of 2007.

IJM Plantations Bhd
A small mid-sized player, IJM Plantations Bhd is a pure palm oil player with its estates mainly located in Sabah. The group has also tied up with CTI Biofuels Malaysia LLC to build and operate a biodiesel plant in Sandakan, Sabah, on a 60:40 basis.

IJM currently has a plantation size of only around 25,000 ha. The group is controlled by listed construction giant IJM Corporation Bhd, which owns a 47.9% stake. IJM Corporation is one of the biggest construction players in the country and has also ventured abroad, primarily to India.

Kulim (Malaysia) Bhd

Kulim (Malaysia) Bhd is primarily the plantation arm of the Johor State Government's investment agency, Johor Corporation. Kulim is one of the large mid-sized players in the local plantation sector and has a planted plantation size totalling around 92,000 ha located in Malaysia, Indonesia and Papua New Guinea. The group is also a large oleochemical player, having acquired Natural Oleochemicals Sdn Bhd (NatOleo) back in July 1994. NatOleo today has one of the largest oleochemical plants in a single site in the world.

In February 2006, Kulim also expanded further by entering into a joint- venture agreement with Peter Cremer (Singapore) GmBH for the production of biodiesel. The joint venture will see two biodiesel plants being set up, a 100,000-tonne-per-annum (TPA) facility in Tanjung Langsat, Johor, and another 100,000 TPA facility in Jurong, Singapore. The plants are expected to be operational in the second half of this year.

Kulim has also expanded and diversified out of its core plantation business through the acquisition of QSR Brands Bhd, a leading player in the quick-service restaurant industry, with franchise ownership of the international brands `Pizza Hut' and, via KFC Holdings Bhd, `KFC' and the homegrown brand `Ayamas'. With a general offer completed successfully on Dec 12, 2005, Kulim now has a 52.1% interest in QSR.

Kurnia Setia Bhd

Oil palm plantations remain the core activity of Kurnia Setia Bhd, and will also remain as the major contributor to this pure palm oil player's profitability in the near and medium term. The company is believed to be focusing more on increasing its production of FFB and the expansion of landbank for cultivating more oil palm plantations.

However, in the short term, the group has only a small plantation size of just around 10,000 ha. The group is linked to the Pahang State Government through Lembaga Kemajuan Perusahaan Pertanian Negeri Pahang, which has a controlling 26.9% interest in the company.

Rimbunan Sawit Bhd

Rimbunan Sawit Bhd is a relatively young and small plantation company based in Sarawak. It has only about 13,700 ha of plantation landbank located in Miri, out of which 75% is planted with oil palm. According to a research report from AmResearch, Rimbunan Sawit's FFB yields are below average due to its young trees, although its oil extraction rates are considered decent. Its operating costs are also said to be within industry norms, which the research house believes is partly due to its landbank, which sits on mineral soil compared to the landbanks of some Sarawak-based plantation companies, which are on peat soil.

Rimbunan Sawit is planning to increase its plantation landbank in the future. However, AmResearch says in its report that it believes any injection of landbank by the sister company, Rimbunan Hijau Group Bhd, is unlikely in the coming few years as Rimbunan Hijau's oil palm trees are still very young. Rimbunan Hijau, which is substantially- owned by Rimbunan Sawit's major shareholder Tan Sri Tiong Hiew King, has approximately 180,000 ha of landbank in Sarawak, although out of this amount, only 18% are planted with oil palm. .


TDM Bhd

The TDM group is mainly concentrated in three main divisions, mainly, plantation, healthcare and food. However, plantation is still the main income contributor to the group. For example, the plantation division contributed the bulk of the group's pre-tax profit of around RM22.8 million in financial year (FY)05 at RM17.1 million, with the balance attributed to non-operational income. The other two business divisions of the group are still in the red. TDM has a plantation size of around 26,300 ha, which is still considered small compared to the big plantation players with landbanks of over 100,000 ha each. The group is linked to the Terengganu State Government, with Perbadanan Memajukan Iktisad Negeri Terengganu (32.08%) and Perbadanan Menteri Besar Terengganu (18.6%) having the controlling stakes in the company.

The food division of TDM is focused on its integrated poultry farming. The division is still loss-making, although the results improved from a loss of RM2.1 million in FY04 to a much smaller figure of RM0.4 million in FY05. The production capacity here has increased for its day-old chick production from an average of 3.7 million in FY04 to 3.9 million chicks in FY05.

Meanwhile, the healthcare division of TDM is also loss-making, although the results again improved to a loss of just RM0.9 million in FY05 from RM4.2 million in FY04. The improvement was mainly attributed to increased efficiency of the two hospitals under the division. The group has finalised its plan to open another medical centre in Kuala Terengganu, which is scheduled to start operations in FY06.

TH Plantations Bhd

Just like most of the small plantation companies, TH Plantations Bhd falls into the category of having just less than 20,000 ha of plantation landbank or 16,227 ha to be exact. According to a report from AmResearch, despite the common lack of economies of scale from its small-sized plantations, the group's milling and processing efficiencies are almost on par with the bigger players and above that of the national average.

TH Plantations' landbanks are all located in Peninsular Malaysia, in the states of Pahang, Terengganu and Johor. In the short term, TH Plantations' profit growth would come from enhancements in the crude palm oil price and operational efficiencies resulting from improvements in yields and extraction rates. However, in the longer term, AmResearch believes that excitement in TH Plantations is likely to come from the injection of plantation assets from its parent company, Lembaga Tabung Haji (LTH). LTH is estimated to own 121,773 ha of landbank in Malaysia and Indonesia (excluding TH Plantation's landbank).

Should there be a need to inject size or economies of scale into TH Plantations, analysts say that it is likely that more landbanks are likely to be sourced from the group from LTH in the future.

Tradewinds (M) Bhd

Tradewinds (M) Bhd is primarily involved in two core businesses, ie, sugar refining and plantation. The group's wholly owned subsidiary, Central Sugars Refinery Sdn Bhd, is one of the largest sugar refineries in the country. Meanwhile, the group has a total plantation landbank of 112,096 ha, out of which 77,424 ha or 69.1% is cultivated.

The group undertook a merger acquisition last year where it acquired the plantation business of Johore Tenggara Oil Palm Bhd and the sugar business of Gula Padang Terap Sdn Bhd. The plantation merger, completed early this year, has increased the group's plantation landbank from 112,096 ha to 140,684 ha.