“About 40,000 hectares have already been planted and planting of the balance is expected at end-2011,” its director Sandra Wong told The Edge Financial Daily.

“About 8,000 hectares are mature and each year will see another 10,000 hectares maturing.”

The main board-listed company has a total of 70,000 hectares of oil palm land in Sarawak. It had been planting 10,000 hectares annually since 2006 and the process would continue, said Wong.

The average age of its palms is four to five years old, with the oldest at around seven years. It is worth noting that the yield of fresh fruit bunches (FFB) from its plantations is about 21 tonnes per hectare, which is higher than the industry average of 19 tonnes per hectare.

For the nine months to Jan 31, 2009, its oil palm division contributed RM36.55 million, or 5.9%, to its total revenue of RM613.67 million. Timber contributed 92.51% of turnover, while reforestation and other business made up 1.53%.

At pre-tax level, its profit totalled RM19.21 million, with the oil palm segment contributing RM9.69 million and timber division RM16.05 million, which were offset by losses incurred in the reforestation and other business divisions.

“There are no plans to acquire palm oil assets as there have not been many distressed sales of such assets,” said Wong.

As at Jan 31, 2009, its debt-to-equity ratio stood at 0.88 times versus 0.73 times in the previous year.

“Funding for oil palm development has come from timber operations and bank financing,” she said. “Bank financing has been secured for planting the balance of the land.”

On its plywood business, Wong said new markets like India and the Middle East had been key factors for Jaya Tiasa, especially since traditional markets like Japan had slowed down significantly.

The major markets for the company’s plywood included the US, Middle East, South Korea and Japan, according to Wong.

“Jaya Tiasa will continue selling to the same markets but Japan has been slow since February,” she said. “Hopefully, Japan will pick up after June.”

Wong said for the current fiscal year (FY10), the company would reduce plywood production while taking the opportunity to carry out major maintenance and alignment of its production facilities.

“The major maintenance of the production facilities is part of efforts to get ready for market recovery,” she said.

The company would also focus on selling profitable products like thin panels and floor-based certified plywood products and logs.

Industry players are hoping that the demand for plywood in Japan might recover in the second half of this year as the country’s stimulus package for house buyers took effect.

Commenting on the logs market, an industry player said the demand for logs remained strong, particularly in India but demand from China was expected to remain flat.

For Jaya Tiasa, India is currently the largest revenue contributor to its log sales.

“India continues to be a major market for Jaya Tiasa’s logs (about 50%) and this is not expected to change,” Wong said. “To grow market share in India, the company has started to sell logs to direct and end-users to support customers with consistent quality and price.”

Jaya Tiasa’s other log markets include Taiwan, Japan and China.

Shares of the company, trading at a current price to earnings ratio of 28.4 times, closed one sen or 0.52% lower at RM1.93 last Friday in thin trade.

The counter hit a 52-week high of RM4 on May 23, 2008 while its low was recorded on Oct 28, 2008. As at Jan 31, Jaya Tiasa’s net asset per share stood at RM4.02.

This article appeared in The Edge Financial Daily, June 1, 2009.