Lau family-owned BLD Berhad makes nearly RM 2 Billion revenue from plantations in Sarawak

BLD sees 44 pct revenue jump on the back of robust CPO, FFB prices *new!

by Ronnie Teo, ronnieteo@theborneopost.com. Posted on June 21, 2012, Thursday

COMPANY PROGRESS: (From left) Lau, company secretary Alvin Lau and independent non-executive director Chong Chon Chee during the AGM.

KUCHING: Sarawak-based BLD Plantations Bhd (BLD) registered a a revenue of RM1.89 billion for the financial year ended Dec 31, 2011 (FY11), translating into a 44 per cent increase from RM1.31 billion recorded the previous year.

This increase was attributed to higher sales volume of 21 per cent as well as higher selling prices for palm oil products by an estimated 19 per cent, revealed BLD Group executive chairman Datuk Henry Lau during its Annual General Meeting (AGM) held yesterday.

It also saw a 63 per cent increase in pre-tax profit to RM125.76 million from RM77.07 million in the previous corresponding period.

“If you look at last year’s performance, a big part of the contribution of the increase in profits comes from good fresh fruit bunch (FFB) and crude palm oil (CPO) prices,” he said.

“Another part comes from BLD’s continuous efforts to expand activities over the years in terms of production, further downstream activities such as setting up refineries and at the same time, trying to improve our yields and reduce costs as far as possible.”

During the AGM, a final single-tier dividend of 14 sen per share for FY11 was also approved and will be paid on July 31, 2012.

In the financial year under review, the group had a total planted area of about 25,100 hectares (ha) of which about 93 per cent was in the maturity stage.

From this, the group produced about 359,900 metric tonnes (MT) of FFB for FY11 with an expectation that output would continue to grow at a sustainable pace as more oil palms reached maturity.

When asked on the plans for the remaining land bank yet unused, Lau affirmed that plans were underway for its development over the next five to seven years.

“So far, as the expansion is concerned, I think with the kind support of shareholders, we are able to retain some of the profits that we have accumulated to continuously expand our activities because we have a sizeable area yet unplanted. This will ensure the volume also increases over the years.

“This is dependent on the present economic situation. If the prices escalate, we will speed up the development. But generally, in the next five to seven years, we hope that we can complete the development of the areas,” he said.

Lau also affirmed that BLD was taking other measures to increase the group’s productivity, such as venturing further downstream. The group, which originally started as a pure plantation player, is now involved in palm oil milling, kernel crushing as well as refinery activities.

“For example, the refinery that we set up via Kirana Palm Oil Refinery Sdn Bhd (Kirana) – we were fortunate that we were able to register profits even though we were very new in the market as far as Kirana and oil refinery activty was concerned.

“In spite of fierce competition, we were able to achieve full production and even exceeded the production target and thus derived profits there. This is an ongoing process,” he outlined.

“We will continue to expand our planted area and also further processing activties in order to diversify rather than just continue our core plantation business.”

The expansion of this existing refinery via the installation of a second plant through Kirana was tentatively expected to commence in the last quarter of 2012 with an estimated RM51 million in expansion expenditure, he revealed.

The group’s palm oil mill and refinery plant, with 60MT of FFB per hour and 1,200MT per day respectively, operated at its installed capacity during the financial year under review.

Additionally, the group’s kernel crushing plant, with 450MT per day, operated at about 76 per cent of its present capacity during the financial year under review.

Meanwhile, the group’s second palm oil mill at the Kabang Land District in Sibu through Bintulu Lumber Development Sdn Bhd had commenced operations with a current processing capacity of 60MT of FFB per hour, Lau added.

BLD hopes to achieve a total land development area of about 27,000ha in 2012, of which about 90 per cent will be in the maturity stage.
“BLD is continuously in the process of exploring new avenues of income and cost reductions for the benefit of our shareholders and evolve to enhance our competitiveness in the market,” he said.