From: http://www.theedgemalaysia.com/index.php...9&Itemid=79KUALA LUMPUR: TSH RESOURCES BHD is looking at expanding its PLANTATION acreage in Indonesia, and is currently scouting around the central and East Kalimantan regions for large tracts of land that are reasonably priced.
By Lam Jian Wyn
By Lam Jian Wyn
"We are looking for green fields. Land prices are hard to disclose, but they are still quite okay," group managing director Datuk Tan Aik Sim told reporters after its AGM here on Thursday, May 20.
He said TSH would finance the expansion via internal funds. As at end-March this year, TSH had some RM68.38 million in cash and bank balances while its trade receivables stood at RM132.44 million.
The company aimed to plant about 40,000ha of land with oil palm trees over the next five years, said the company's chairman Datuk Kelvin Tan.
The group will have 43,000ha of land planted with oil palm this year. Currently, 13,000ha of land are planted with oil palm trees that are at least four years old - classified as mature trees.
"Our planting exercise will be undertaken on a joint-venture basis. For that we will borrow some funds. Our current gearing level is 0.65 times, which is lower than the industry average of 1.5 times," said Kelvin.
Last January, TSH announced that it was acquiring 20,000ha of plantation land in Indonesia, of which some 1,200ha had already been planted with oil palm trees.
Towards this end, the company planned to plant between 8,000ha and 9,000ha of land with oil palm trees on a joint-venture basis to boost its palm bio-integration business, said Tan.
"Palm oil contributes 80% of our revenue. It will be a more important core activity going forward," he said.
Other than oil palm plantation, TSH's other core businesses include wood products and cocoa manufacturing. The company at present has total land holdings of 127,000ha in Sabah and Indonesia.
Apart from its oil palm estates, the group also had 40,000ha of land dedicated to timber and rubber trees, said Kelvin. About 1,500ha of land were planted with rubber trees while 5,000ha were planted with timber trees, he added.
TSH's net profit nearly doubled to RM11.26 million in its first quarter ended March 31, 2010 due to higher average price of crude palm oil on the back of a 32% rise in revenue to RM240.48 million.