WTK aims for 25% increase in FFB production

KUCHING: WTK Holdings Bhd, which has seen strong growth in its oil palm plantation business, is targeting to raise fresh fruit bunches (FFB) production by about 25% this year.

This is on top of a nearly 45% hike in FFB output to 79,500 tonnes in 2017 from 55,000 tonnes in 2016. FFB production is expected to increase to 98,700 tonnes in 2018, as more mature palm hectarage comes on stream, according to WTK, the Sarawak-based traditional timber outfit.

Total mature palm area rose to 7,300ha last year from 6,100ha in 2016 or a jump of nearly 20%. Higher FFB production was also attributed to improved yields.

WTK group currently owns five oil palm estates located in the central and northern regions with a combined landbank of 31,800ha. Under its two planted forest licences in central Sarawak, another 3,200ha have been designated for oil palm plantation, bringing its total plantation landbank to 35,000ha.

Seeing the growth potential and increasing contribution from the oil palm business to the group’s earnings, WTK commenced the construction of its first palm oil mill in Limbang Division in 2016.

The mill, which has a processing capacity of 30 tonnes per hour of FFB, was commissioned in the second half of 2017.

“The mill has since added a new revenue stream for the group from the sales of crude palm oil (CPO) and palm kernel (PK). The mill has processed 38,600 tonnes of FFB to produce 8,700 and 2,000 tonnes of CPO and PK, respectively, for the short duration until end-2017. This is achieved on the back of a decent oil extraction rate of 22% and 5% for CPO and PK,” said WTK in its 2017 annual report.

With the increase in FFB sales of RM13mil and combined sales from CPO and PK of RM23mil, the group’s plantation segment recorded a sharp rise in revenue to RM36mil last year from RM24mil in 2016, or up by 150%.

With the expected increase in FFB production from its own estates and third-party estates, the company expects this year’s CPO production to more than double to 19,000 tonnes and PK production to shoot up to 4,000 tonnes. Currently, the mill obtains 80% of FFB requirements from third-party estates and only 20% from its own estates.

WTK said to enhance the value and marketability of its palm oil products, the group endeavoured to have its oil palm estates and palm oil mill certified under Malaysia Sustainable Palm Oil (MSPO).

So far, two of the estates have gone through the audit stage of the MSPO certification and are expected to obtain the certification by next month. The remaining three estates and palm oil mills are in the process of obtaining the certification by June 2019.

On its planted forest project, WTK said it had so far planted some 8,700ha of fast grown commercial tree species. The group expects to start first harvest of plantation logs in 2020. The investment in the planted forest project, added the company, was to ensure long-term sustainable supply of logs to supplement the use of timber from natural forest concessions for wood-processing industries such as plywood.