New Listing: Boustead Plantations to focus on improving efficiency

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KUALA LUMPUR (June 26): The newly-listed Boustead Plantations Bhd (BPB) intends to focus on improving its operational efficiency before acquiring more plantation land.

Its Vice Chairman Tan Sri Lodin Wok Kamaruddin said the company was more concerned with improving production efficiency using better seeds and agronomic practices at its estates, as it attempts to replace manual workers with mechanised instruments.

He said the group hoped to slightly improve production from 1.06 million tonnes reported last year.

"We hope to improve it slightly by at least 10%, if not, we hope to maintain it at last year's level," Lodin said.

On acquiring more plantation land, Lodin said that there were no specific plans currently, adding that BPB was "not in a hurry".

The group had earlier stated in its prospectus that it was targeting to acquire an additional 20,000ha of plantation land in the next three to five years.

Lodin said the group would consider acquiring land in the ASEAN region, besides Malaysia when the opportunity arises.

"I think the focus is more on improving the efficiency of our own estates," he said.

Chow Kok Chong, chief operating officer of BPB, said the group had allocated about RM10 million per annum for research and development activities.

Going forward, the group maintains a positive outlook on the plantation segment, as the El Nino phenomenon is expected to support crude palm oil (CPO) prices.

"If El Nino happens, we expect the price of CPO to probably be around RM2,700 to RM2,800 per tonne.

"For the second half of the year, we believe CPO prices could be around RM2,600 to RM2,800 per tonne, mainly due to rising prices of crude oil," said Lodin.

At 10.40am, BPB was traded at RM1.64, up 4 sen from its IPO price of RM1.60 with some 63.2 million shares done.

The counter had earlier risen as much as 9 sen to a high of RM1.69.

BPB shares commenced trading at RM1.66, a 6 sen premium to its IPO price.