MKHOP seeks land for plantation in Indonesia
Group plans to acquire 5,000ha in East Kalimantan
“The land identified will be nearer to the new capital Nusantara compared to the current plantation land. We have been in active discussions for over two years. We are ready to embark on it anytime now.”
Tan Sri Alex Chen Kooi Chiew
KUALA LUMPUR: Main Market-bound MKH Oil Palm (East Kalimantan) Bhd (MKHOP) is actively seeking land in Indonesia to expand its land bank for oil palm plantations.
The company, which has about 18,000ha of plantation land currently, plans to acquire another 5,000ha in East Kalimantan by the second quarter of 2024.
“The land identified will be nearer to the new capital Nusantara compared to the current plantation land. We have been in active discussions for over two years.
“We are ready to embark on it anytime now,” chairman Tan Sri Alex Chen Kooi Chiew said at a briefing in conjunction with the company’s prospectus launch yesterday.
He added that its plantations are mainly in Indonesia, under PT Maju Kalimantan Hadapan and PT Sawit Prima Sakti, both situated about 100km from Nusantara.
MKHOP, which is a subsidiary of property developer MKH Bhd, aims to raise Rm136.4mil from its initial public offering (IPO), with about Rm42mil or 31% allocated to expanding land bank for oil palm plantations while Rm9mil or 6.6% for the setting up of a palm kernel crushing facility.
Some Rm42mil will go to capital expenditure for existing plantation land, refurbishment and upkeep of existing palm oil mill, refurbishment and construction of workers housing quarters and expansion of electricity supply.
From the listing proceeds, Rm30mil or 22% will go towards repayment of loans while the remaining Rm13.4mil or 10% will be used as working capital and to cover listing expenses.
With an IPO price of 62 sen per share, MKHOP is set to debut on the Main Market on April 30, giving it a market capitalisation of Rm635mil.
Chen said about 95% of the trees within its estates are in prime mature stage, marking the peak of production.
He added that the group is a property developer at heart and hence, it is not just looking at plantations.
“While our plantation business is very successful, we would like to emulate some of the successes that we have on the property front over there in the near future,” he added.
Chen highlighted the presence of Port Bontang, a deep-sea port in close proximity to PT MKH Estate.
“So going forward, if we want to industrialise that area, it is something that is very feasible because of the geographical factors are all there,” he added.
Chen expressed confidence in the company’s ability to establish plantations successfully based on its experience.
“We will ensure that the plantation can be rebuilt, drawing from our previous experiences. Whether it is a brownfield or greenfield, to us, it is not a problem,” he said.
With a firm commitment to advancement, Chen highlighted the company’s proactive approach towards mechanisation and utilisation of technology.
“We are going forward with mechanisation and technology that will give us the operational efficiency and quality that we would like to have,” he said, adding that the group’s current mechanisation level stands at 40%, with a target to increase it to 90%.
This forward-looking strategy includes the utilisation of powered wheelbarrows as well as farm all-terrain vehicles and utility terrain vehicles to enhance the efficiency of fresh fruit bunch collection, while reducing delivery time to the crude palm oil mill.
Furthermore, MKHOP focuses on optimising water management, utilising canals and drains to discharge rainwater during the wet season and storing it during the dry season to maintain soil moisture levels.
In terms of technology, the company employs cutting-edge tools such as apps and drones for efficient monitoring of the plantation.
To bridge the distance between Malaysia and East Kalimantan, Chen said MKHOP implements real-time CCTV monitoring at its Malaysian office, allowing for remote supervision of its plantation operations in Indonesia.