PALM OIL MILL & MANAGEMENT & MOTIVATION

Sunday, October 19, 2014

MYpalmoil

CBIP: Good order flow for Modipalm mills

Posted: 17 Oct 2014 07:07 PM PDT

Subang Jaya: CB INDUSTRIAL Product Holding Bhd (CBIP), which holds the patent for constructing Modipalm mills, said its current order book of some RM500 million will keep it busy for another 18 months.

CBIP managing director Lim Chai Beng said while low palm oil prices were slowing oil palm estate owners' investments, orders were still coming in for mill upgrades.

"We're getting orders, although there may be slight delays here and there. Out of the RM500 million orders to put up new mills and upgrade old ones, 70 per cent are from outside Malaysia.

"Old mills in Malaysia need to be upgraded and our Modipalm technology has been proven to minimise oil loss. This helps contribute to better oil extraction rates at the mills," Lim said after the company's extraordinary general meeting held here yesterday.

CBIP shareholders approved the company's plan to issue 1-for-1 bonus shares and free warrants.

Lim said oil palm planters have everything to gain if they upgraded their conventional mills to an automated Modipalm. Its continuous steriliser system is compact, he said, as it took up less space, fuel and labour; produced more and higher quality oil; and therefore, the overall impact is kinder to the environment.

At a Modipalm mill, there is no need for tractors and hydraulic skid-steer loaders or wire-rope winches to move the fruit-cages around. There is also no need for monorail hoists to lift the cages to the threshing machine.

This means less machinery to maintain and, in two shifts, the Modipalm mill needs only 30 workers, or half the staff strength to operate a conventional 60-tonne mill processing 300,000 tonnes of fresh fruit bunches in a year.

"Fewer workers also means less houses to be built on the plantation. So, you see, with tremendous improvement in safety and minimal oil wastage it is worthwhile to upgrade to a Modipalm mill," Lim said.

On CBIP's other sources of income, executive director Mak Chee Meng said the company's oil palm landbank in Indonesia totalled 65,000ha, of which about 10 per cent is planted up.

In Malaysia, CBIP has a joint venture with Tradewinds Group, with its portion of investment amounting to 7,500ha.

"We're now working hard to top up the landbank in Indonesia. We may be slow (in land acquisition) but we are sure in our investments because we go through all the legal compliance step by step," Mak said.

Wednesday, October 15, 2014

MYpalmoil

Smallholders urged to apply for replanting grants

Posted: 13 Oct 2014 07:01 PM PDT

KUALA LUMPUR: Plantation Industries and Commodities Minister Datuk Amar Douglas Uggah Embas urged smallholders to apply for replanting grants to replace ageing oil palms with higher yielding seedlings.

Last Friday, Prime Minister Datuk Seri Najib Razak, in his 2015 Budget speech, announced that RM41 million had been allocated for smallholders to embark on new plantings and replanting of their unproductive rubber and oil palm trees.

Smallholders are those who own 40ha or less.

When asked on the portion for the replanting of oil palms, Uggah said the allocation worked out to RM7,000 per hectare for oil palm land in Peninsular Malaysia and RM9,000 a hectare in Sabah and Sarawak.

This subsidy is meant to raise the annual national oil yield, which has been stagnating at below four tonnes a hectare over the last two decades.

It is hoped that by 2020, the annual fresh fruit bunch yield would improve to 26.2 tonnes a hectare from 21 tonnes currently.

In response, Malaysian Palm Oil Association chairman Roy Lim Kiam Chye urged the government to extend and top up replanting grants for all oil palm planters and not just the smallholders.

"Incentives to accelerate replanting at current low prices will ensure future competitiveness of the industry. The replanting grant is good for the smallholders but what about estate owners? They need to replant, too," he added.

Last Friday, the government also took a pre-emptive measure to extend the crude palm oil (CPO) export duty exemption until December.

"Although it is a good gesture from the government, it is common knowledge that at current price levels, CPO export duty is already zero. With the current global edible oils supply situation, prices are not likely to rise significantly to trigger the duty factor," he said.

Lim added that the exemption had levelled the playing field for Peninsular Malaysia exporters against those in Sabah and Sarawak. "If we look deeper, zero export duty has somewhat dented the advantage of producers in Sabah and Sarawak as they no longer enjoy the 30 per cent discount on duty."

Maybank Investment Bank senior analyst Ong Chee Ting concurred with MPOA, saying Malaysia's palm oil exports can be freely exported during these high production months until the end of the year. "It aims to quickly flush out incoming supplies to help a more sustained CPO price recovery next year."

On price forecast, Ong said CPO had lost its price competitiveness due to the recent slump in crude oil price and narrowed price discount to competing soyabean oil.

CPO price, therefore, needed to trade lower at RM2,000 per tonne to stimulate demand and flush out incoming supplies during these peak production months, Ong said.

"We think CPO prices will be under near-term price pressure to stimulate demand. We expect CPO prices to continue trading sideways at between RM1,900 and RM2,200 per tonne until early December. Hopefully, it closes the year above RM2,400 per tonne," he added.

Tuesday, October 14, 2014

MYpalmoil

‘FGV ending pursuit of NBPOL’

Posted: 13 Oct 2014 03:46 AM PDT

This is written by my colleague Zaidi Isham Ismail.

KUALA LUMPUR: Felda Global Ventures Holdings Bhd (FGV) will not pursue the acquisition of New Britain Palm Oil Ltd (NBPOL) after Sime Darby Bhd's fresh RM5.63 billion offer for the planter.

A reliable source said FGV will not counter offer as it will be too expensive. "No, they will not continue to bid for NBPOL as it's too pricey," the source told Business Times.

After Sime Darby pulled out of the deal, FGV took the opportunity to bid for NBPOL but now that Sime Darby has made an about-turn, FGV will not push for it any more.

Sime Darby launched a general offer to buy all shares in NBPOL for £7.15 (or RM37.52) each last Thursday, less than two weeks after it had turned down the chance to buy Kulim (Malaysia) Bhd's 48.97 per cent stake in the London-listed NBPOL.

Sime Darby's offer is a 30 per cent premium over Kulim's previous offer of £5.50 a share to increase its stake in NBPOL.

"This acquisition is conditional upon Sime Darby obtaining 51 per cent voting rights in NBPOL," said Sime Darby president and group chief executive Tan Sri Bakke Salleh last week.

NBPOL owns about 80,000ha of oil palm plantations, more than 7,700ha of sugarcane land and a further 9,300ha of grazing pasture in Papua New Guinea. It also owns 12 mills and two refineries — one in Port Moresby and the other in Liverpool, the United Kingdom.

Sunday, October 12, 2014

MYpalmoil

Pricey offer for NBPOL justified

Posted: 10 Oct 2014 06:24 PM PDT

KUALA LUMPUR: SIME Darby Bhd may be paying a lot for New Britain Palm Oil Ltd (NBPOL), but this is justified by the latter's valuable assets, analysts said.

Affin Hwang Capital calculated that Sime Darby's general offer price of RM5.6 billion for all NBPOL shares works out to be an enterprise value per planted hectare of RM84,200 for the Papua New Guinea-based planter.

Although this looks high when compared with Felda Global Ventures Holding Bhd's proposed acquisition of Asia Plantations' estates in Sarawak, Affin Hwang said NBPOL has a better oil palm age profile, higher fruit yield and plantable reserves of 22,000ha.

The research house is positive on Sime Darby for seeking board and management control in NBPOL, and had upgraded its rating on the conglomerate. It thinks Sime Darby's shares can rise to RM9.31.

MIDF Research, too, is positive on Sime Darby buying NBPOL despite the £7.15 (or RM23) offer price representing a 85 per cent premium over NBPOL's last closing price on Wednesday.

"NBPOL is one of the best performing palm oil companies in the world with consistent fresh fruit bunch yield of more than 23 tonnes per hectare," it said yesterday.

While it valued Sime Darby's shares at RM9.70, MIDF Research has kept a "neutral" stance on its overall performance due to the risks of other businesses not performing well.

Sime Darby's net gearing is seen to be manageable. "We believe Sime Darby is able to increase its borrowings without jeopardising its credit risk," said MIDF Research.

Hong Leong Investment Bank (HLIB), meanwhile, has recommended a "hold" call and maintained Sime Darby's target share price at RM9.75. It noted that the high price tag of £7.15 per NBPOL share is justified, given the scarcity of sizeable brownfield plantation landbank. "NBPOL estates are seen to be a good platform for Sime Darby to expand into PNG's palm oil industry," it added.

HLIB said the acquisition would only raise Sime Darby's net gearing from 0.22 times to 0.44 times. "Earnings-wise, we estimate that the acquisition will add 2.5 per cent to Sime Darby's forecast earnings in the next financial year."

AmResearch Sdn Bhd has maintained a "buy" call on Sime Darby while valuing the conglomerate's shares at RM10.58. It viewed Sime Darby's offer as "pricey" at 22 times of next year's forecast earnings but admitted that this price tag had to be attractive enough to obtain a controlling stake of at least 51 per cent in NBPOL.

Saturday, October 11, 2014

MYpalmoil

Sime Darby makes RM5.63 billion offer for NBPOL

Posted: 09 Oct 2014 06:43 PM PDT

KUALA LUMPUR: Sime Darby Bhd is finally able to make a RM5.63 billion offer for New Britain Palm Oil Ltd's (NBPOL) hand in marriage, now that the Papua New Guinea (PNG) government has wholeheartedly given its blessing.

Sime Darby yesterday launched a general offer to buy all shares in NBPOL at £7.15 (or RM37.52) each. This was less than two weeks after it had turned down the chance to buy Kulim (Malaysia) Bhd's 49 per cent stake in London-listed NBPOL.

The cash offer is a 30 per cent premium over Kulim's previous offer of £5.50 a share to increase its stake in NBPOL.

"This acquisition is conditional upon Sime Darby obtaining 51 per cent voting rights in NBPOL," said Sime Darby president and group chief executive Tan Sri Bakke Salleh, here, yesterday.

He explained that "right from the start, Sime Darby was not only focusing on Kulim's block in NBPOL because ideally, we would like to end up with at least a 51 per cent stake so that we can assume both NBPOL's management and board control."

"In the course of our negotiations with the stakeholders, we realised the key factor here is to get the support from the PNG Government. Right till the last day of our exclusivity agreement with Kulim, which fell on September 28, we still had not received any written letter of confirmation from the PNG Government."

However, on October 1, Sime Darby finally obtained the support letter from PNG's Prime Minister Peter O'Neill, which paved the way for it to reactivate its proposed offer for NBPOL. O'Neill emphasised that this deal must be in line with PNG's national interest in relation to Rule 27A of the PNG Takeovers Code.

"It is not often that an opportunity such as this presents itself. The strategic fit between NBPOL and Sime Darby Plantation is the key factor that will ensure the success of this deal. We hope to complete this deal by year-end," Bakke told reporters in a briefing.

He then dished out NBPOL's vital statistics to support Sime Darby's offer. Among them is ownership of about 80,000ha of oil palm plantations, more than 7,700ha of sugar cane land and a further 9,300ha of grazing pasture in PNG. NBPOL also owns 12 mills and two refineries — one in Port Moresby, PNG, the other in Liverpool, the United Kingdom.

Post-acquisition, the combined landbank of the two companies would be nearly a million hectares, he said, adding Sime Darby shareholders can look forward to around five per cent contribution to the bottom line in the next couple of years, if the merger with NBPOL is a success.

Bakke also said there are plans to delist NBPOL from the London Stock Exchange. "The stock is illiquid and its current market price is not reflective of the value of the company. In the last 12 months, the average cumulative trading volume on the LSE and the Port Moresby Stock Exchange represents less than 1 per cent of the float.

"We believe it will be good to move NBPOL's listing from London to this part of the world, either to Bursa Malaysia or the Singapore Stock Exchange," he said.

Last night, NBPOL's largest shareholder, Kulim, told the stock exchange yesterday said it intends to accept Sime Darby's proposal, provided there is no higher offer. It will soon call for a shareholders' meeting to decide on this. If the deal goes through, Kulim will gain RM2.75 billion from the disposal.

Friday, October 10, 2014

MYpalmoil

I want to hold your hand

Posted: 09 Oct 2014 01:12 AM PDT

I WANT TO HOLD YOUR HAND

Oh yeah I'll tell you something
I think you'll understand
When I say that something

I wanna hold your hand
I wanna hold your hand
I wanna hold your hand

Oh please say to me
You'll let me be your man
And please say to me
You'll let me hold your hand

Now let me hold your hand
I wanna hold your hand

And when I touch you I feel happy inside
It's such a feeling that my love
I can't hide, I can't hide, I can't hide

Yeah, you got that something
I think you'll understand
When I say that something

I wanna hold your hand
I wanna hold your hand
I wanna hold your hand

And when I touch you I feel happy inside
It's such a feeling that my love
I can't hide, I can't hide, I can't hide

Yeah you, got that something
I think you'll understand
When I feel that something

I wanna hold your hand
I wanna hold your hand
I wanna hold your hand
I wanna hold your hand

Songwriters
LENNON, JOHN WINSTON / MCCARTNEY, PAUL JAMES
-----------------------------------------------------------------------------

I was at Sime Darby Bhd's urgent press conference this morning when Tan Sri Bakke Salleh was dishing out the vital statistics of New Britain Palm Oil (NBPOL).

As I was listening in, this song came to mind. "It's such a feeling that my love ... I can't hide, I can't hide, I can't hide"

I guess Sime Darby couldn't contain its love for NBPOL when the Papua New Guinea government finally gave its blessings for this courtship to blossom.

Love affairs are seldom predictable. She loves me ... she loves me not ... she loves me ... she loves me not ... SHE LOVES ME!!!

Like all anxious parents, the government of Papua New Guinea would only agree to a hand in marriage if a suitor is ready and willing to cherish and love its daughter, NBPOL.

When so many livelihoods are at stake, it's crucial that the suitor of NBPOL is in for the long haul. That means he's committed to be Mr. Right, not someone who is unsure of his feelings and can only offer to be Mr. Right-Now.

Love is in the air. May there be many more happy unions in the oil palm industry.

Wednesday, October 8, 2014

Tips by Warren Buffet

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