KUALA LUMPUR: Asiatic Development Bhd is confident its leadership in oil palm genome research will propel the company to the forefront of the plantations industry, with the expected commercial application of genome technology to improve palm oil yield in nine years.

Its unit, Asiatic Centre for Genome Technology Sdn Bhd (ACGT), has managed to complete up to 98% of the sequencing and annotation of two varieties of oil palm genome as of last December. The next stage will involve the commercial planting of the high- yielding “super palm” tree.

The plan was revealed to shareholders during the company’s AGM here on June 15. ACGT is a subsidiary of Asiatic, which in turn is 55% owned by gaming and leisure group Genting Bhd. Asiatic itself is changing its name to Genting Plantations Bhd.

Asiatic chief executive officer Tan Sri Lim Kok Thay told shareholders at the AGM that it was an “industry changing breakthrough” and the unlocking of the genomes would increase its understanding of the crop, leading to substantially improved oil yield.

He said that since Asiatic was a relatively small plantation player, its focus had been on improving yield and was expected to be the first company to apply the technology.

When completed, the super palm could help raise oil palm fruit crop yields by up to 30% and potentially contribute around RM12 billion in annual revenue boost for the country.  

Malaysia, which supplies around 40% of the world’s palm oil, has long planned to increase palm oil yield that has been stagnant for the past 20 years. The target set by the government back in 2003 was to increase the fresh fruit bunches (FFB) per hectare to 35 tonnes and oil extraction rate (OER) to 25%. 

Asiatic is reputed to be one of the lowest cost palm oil producers in the industry. Plantation business contributed over 90% of its 2008 revenue of RM1.03 billion, while the rest came from property development.

Last year, it achieved a FFB yield of 22.6 tonnes per ha and an OER of 20.63% versus the industry averages of 20.18% and 20.21%, respectively.

Started in 1980 as the plantation arm of Genting, Asiatic has over the years embarked on several significant acquisitions in Malaysia, in particular its expansion into Sabah. It has spent over RM500 million and managed to increase its landbank from 40,000 hectares at the turn of the millennium to around 66,000 hectares currently.

It also has two joint ventures in Kalimantan, Indonesia, in which its unit, PT Asiatic Nusantara, has 70% and 60% stakes respectively.