TSH Resources Targets 1.8 Mln Tonnes Of Palm Oil By 2010

By 2010, its total landbank of 65,000 hectares, with 90 percent in Indonesia, would have been fully planted compared with only 20,000 hectares now, group managing director Datuk Dr Kelvin Tan Aik Pen said.

He said the new mill in Kalimantan, the company's fifth, would be able to provide a 20 percent boost in capacity.

"There will be a significant growth in the planted area over the next three years," he told reporters after the company's annual general meeting here today.

Construction of the new mill costing between RM30 million and RM40 million was due to begin by year-end, he added.

Looking ahead, Tan said TSH Resources planned to acquire more new planted and unplanted land in Indonesia.

"We hope for the Indonesian operations to become a key profit contributor by 2010, possibly 60 percent to revenue and profit in next three years from 30 percent currently," he said.

Although Tan was non-committal on how much the company could earn as a result of its measures, stockbroking analysts said TSH Resources was well-positioned to reap net profit of RM83 million this year, RM105 million in 2008 and RM133 million in 2009.

For the financial year ended Dec 31, 2006, TSH Resources posted a higher turnover of RM624.7 million, up 15.4 percent from RM541.4 million in 2005, following improved crude palm oil and palm kernel prices.

The company also recorded a 140 percent rise in net profit to RM17 million for its first quarter ended March 31, 2007, due to improved performance of the palm oil division.

Tan said the company was also looking to invest in downstream activities by setting up more new mills.

It planned to build one or two new oil palm mills per year, involving an investment of between RM30 million and RM40 million each, he said.

He also said that the company's joint venture with Singapore's Wilmar International Ltd in a palm oil refinery in Kunak Jaya, Sabah, had contributed positively to TSH Resources' performance in the first quarter of this year.

The refinery, which was commissioned in January, recorded a profit of RM7.2 million in the first quarter.

On TSH Resources' share prices, Tan said: "I'm not happy with the prices because we are still underappreciated by 40 percent despite recording strong growth."

Shares of the company traded at a sen higher at RM2.79 on Bursa Malaysia as at 3.05pm today.

Source: Bernama.com