The company would be focusing its attention on its vast, unplanted tracts of about 57,000 hectares (140,790 acres) which are mostly in Indonesia.

In its last fiscal year, TSH acquired an additional 28,300ha in Indonesia through the purchase of two Singaporean holding companies.

The acquisition of PT Farinda Bersaudara through the takeover of Elaeis Oversea Pte Ltd has been completed while the transfer of Martinique Cove Pte’s PT Mitra Jaya Cemerlang is expected to be completed next year.

“We are a medium company but we want to be bigger,” TSH group managing director Tan Aik Sim said yesterday after the company’s annual general meeting.

“We have been buying land in Indonesia over the past year and we have acquired two companies. Basically, we would like to be a regional player in plantations.”

Presently, TSH’s landbank earmarked for palm plants measures 78,000ha, but only 21,000ha have been planted.

Of that total, about 6,000ha are planted in Sabah while the rest are in Indonesia.

Also, the Indonesian plantations are mostly immature palms, which do not produce much crude palm oil (CPO).

Tan said the yield of fresh fruit bunches (FFB) from its Sabah plantations amounted to about 29.6 tonnes per hectare (mt/ha), which is substantially higher than the industry average of 19 mt/ha.

“If you look at the most efficient companies, they average above 25 tonnes per hectare. (A yield of) thirty tonnes is a good yardstick for us to hunt for,” he said.

TSH’s latest financial results announced for the first quarter ended March 31 showed the company’s revenue and earnings had dropped by 36% and 81% year-on-year respectively.

1Q09 revenue was down to RM182.6 million from RM284.13 million, while net profit declined to RM5.7 million from RM30.76 million.

Tan said the poorer performance was due to the low price of CPO, which according to Bloomberg averaged RM1,894 per tonne in the first three months of this year.

The increase in CPO prices meant better quarterly performances, he added.

“Second quarter will be better and hopefully it will sustain in the third quarter. We are comfortable at the current level of RM2,600-RM2,700 per tonne,” Tan said.

TSH is planning to plant an additional 5,000 hectares of oil palm in 2009.

Meanwhile, Tan said the company’s 65%-owned Ekowood International Bhd fell into the red in 1Q09 ended March 31 because of slowing foreign demand. Tan is also the managing director of the wood flooring company.

Ekowood posted a net loss of RM2.36 million in the quarter, down from a net profit of RM3.4 million a year earlier.

Some 80% of Ekowood’s revenue comes from exports, which have fallen 30% since the onset of the crisis, Tan said.

Ekowood, however, was profitable during more regular times, and that’s enough reason for TSH to maintain a stake in the company, Tan said.
“If you look at the history of the company, it’s been quite profitable over the past four to five years.

“Just like any downturn, (the current one) will blow over. The group intends to keep the company and we are looking at different ways to step up efficiency and improve our timber yield during these hard times,” he said.

However, he said that the going would be tough for the company over the next two quarters or so.

This article appeared in The Edge Financial Daily, May 22, 2009.