Kulim ... Sept 2008

It will be looking at plantation REITs (real estate investment trusts) and a separate listing for its plantation unit as part of its effort to unlock the value of the group’s diversified portfolio.

Kulim is involved in four strategic core businesses – oil palm plantations, oleochemicals, biodiesel and quick-service restaurants.

The group planned to increase its landbank in Malaysia and Papua New Guinea (PNG) to ensure expansion in its plantation operations.

Its strong financial position allows it to explore acquisition opportunities, especially in PNG, but they are doing it cautiously due to the buoyancy and prevailing high prices.

The group is also committed to the Roundtable on Sustainable Palm Oil (RSPO) principles as they are cautious in opening new areas that will be regarded as unsustainable.

Kulim was also open to landbank offers in Malaysia although such opportunities were quite limited.

As at March 2008, the group has 31,422ha in Malaysia, 44,714ha in PNG and 6,594ha in the Solomon Islands.

PNG would feature prominently in the plantation division’s future expansion. Its PNG subsidiary New Britain Palm Oil Ltd (NBPOL) is in the midst of acquiring Ramu Agri Industries Ltd (Ramu), which is listed on the Port Moresby Stock Exchange. Upon the successful acquisition, we will be able to add 30,000ha of agricultural land in PNG.

Ongoing expansion into new areas adjacent to the group’s existing operation is also taking place at 2,000ha to 4,000ha per year.

NBPOL is also setting up an integrated palm oil refinery in Britain with a production capacity of about 200,000 tonnes per year. It is slated to be commissioned by end of first quarter 2010. The move will see NBPOL expanding into the European Union and will make it one of the first palm oil producers to offer fully traceable and sustainable palm oil product.

Kulim has a joint-venture with German-based Peter Cremer (S) GmbH to set up two biodiesel plants – one in Johor and another in Singapore.

As for the foods and restaurants division, QSR Brands Bhd (QSR) and KFC Holdings (M) Bhd (KFCH) have taken measures since early 2008 to stay ahead of competition while the market re-adjusts its spending as a result of the higher cost of living.
The success in securing franchise rights for Pizza Hut and KFC in Cambodia from principle Yum! Restaurants Asia Pte Ltd could see QSR emerging as a dominant force in the country’s food and beverage industry.