TH Plantation to garner RM150 mln from estate assets disposal this year

KUALA LUMPUR: TH Plantation Bhd ( THP), the plantation arm of Lembaga Tabung Haji, will gain RM150 million from the disposal of several estate assets this year.

Chief executive officer Datuk Seri Zainal Azwar Zainal Aminuddin said the intended assets were non- core, nonstrategic and non-performing estate assets.

“We want to hold on to the best performing assets to enable us to grow further,” he told reporters after the company’s annual general meeting (AGM) yesterday.

The disposal of THP Gemas Sdn Bhd for RM154 million in December 2016 also partly boosted the company’s 2016 bottom line, said Zainal.

On crude palm oil (CPO), he said prices rallied beginning the third quarter of the year and remained buoyant until the end of the year.

“Palm kernel prices continued to trade at levels higher than CPO, an unprecedented trend that was brought about by the shortage of copra,” said Zainal, adding that CPO prices were expected to fetch between RM2,500 to RM2,700 per tonne.

“Going forward, with better weather condition, the market also expected production to gradually improve, particularly in the second half of this year, and prices were expected to normalise to sustainable levels,” he said.

While remaining resilient, amid the challenges faced by the industry, he, however, said the group must still be mindful of the uncertainties ahead.

“The industry, TH Plantations included, has evolved with the times to ensure that we protect our margins in difficult periods; to explore new ways of doing things, to increase productivity, optimise costs and ensure that we gain stronger footing once the challenges pass,” he said.

Zainal said through a structured development and replanting programme carried out in the past few years, the group’s plantation under oil palm cultivation now spanned over 60,000 hectares throughout Malaysia.

Approximately 60 per cent of the group’s mature area is made up of young and prime estates, with more coming into maturity in the next two to three years, promising a steady revenue growth in coming years.

“The group’s yield and oil extraction rate improvement programmes are ongoing while its consolidation of brownfield acquisitions is progressing well,” he said. — Bernama