KUB TO IMPLEMENT RIGHTSIZING
Group also in advanced talks to sell Sarawak palm oil mill, says president
ADIVERSIFIED KUB Malaysia Bhd will undertake a rightsizing exercise for the financial year ending December 31 in order to return to the black.
President and managing director Datuk Abdul Rahim Mohd Zin said KUB was discussing the move with its employees.
“We are figuring out how many employees will be affected, but I can say that oil palm estate workers will not be affected,” he said after KUB’s annual general meeting, here, yesterday.
He said the group would offer “good packages” to affected staff but did not elaborate.
Rahim is also positive on the impending sale of its palm oil mill in Sarawak. KUB is in advanced discussions with a potential buyer to sell KUB Maju Mill Sdn Bhd, which is worth about RM45.48 million.
“This will help improve our
cash flow, especially since we have bank borrowings, and help eliminate losses from the mill.”
KUB has two other oil palm estates, in addition to the mill, in Sarawak.
On whether the company would increase its landbank in Sabah and Sarawak, Rahim said: “We are badly hit on our cash flow and so we need to focus on our investments.”
It has allocated between RM40 million and RM50 million in capital expenditure this year.
Last year was challenging for KUB due to the slump in crude palm oil (CPO) prices and floods in Sarawak.
“CPO prices have plummeted from an average of RM2,800 to RM3,000 per tonne to below RM2,000 per tonne , which has caused a huge loss for our plantation sector.
“For Sarawak particularly, floods had affected our operations and increased our productions cost,” he said.
Last year, KUB sold its entire stake in A&W Malaysia for RM34 million.