Boustead to list plantation division next year, add more land-bank

PETALING JAYA: Boustead Holdings Bhd is planning to create another plantation giant by listing its plantation division next year. It is also eyeing to add more plantation land-bank to its portfolio.
“We are planning to submit our Boustead Plantations Bhd initial public offering (IPO) plans to the Securities Commission by the year-end,” said group managing director Tan Sri Lodin Wok Kamaruddin after its EGM yesterday.
“The exercise should take another three to four months’ time, but might take longer. However, ultimately, we would want to list it,” he said.
The enlarged Boustead Plantations, with a plantation size of about 83,000ha, will make it among the top five plantation counters on Bursa Malaysia, after the group consolidates its assets under one entity from its soon-to-be privatised Al-Hadharah Boustead Real Estate Investment Trust (REIT). Al-Hadharah is the country’s first Islamic plantation-based REIT listed in 2007.
With an IPO in hand to raise capital, he said the plantation division would be looking to expand its estate size to about 100,000ha in two years. However, Lodin stopped short of revealing the exact amount Boustead intended to raise from the IPO.
“It would be more than the privatisation (of the REIT),” he said.
He added that Boustead was not in a rush to add more estates and would be focusing its business on Malaysia.
“We have just exited Indonesia and have no plans to venture overseas,” he said.
Yesterday, shareholders unanimously approved the RM664.8mil attempt to privatise the group’s plantation REIT, which is expected to be completed by the year-end.
In September, the group had also snapped up a 2,400ha oil palm plantation in Lahad Datu, Sabah, for RM184.6mil.
“Any expansion would have to depend on opportunities, and for now we would like to confine ourselves to our current operations. There are no plans yet to go further downstream,” he said.
Its plantation business produces over 1.2 million tonnes of fresh fruit bunches and 245,000 tonnes of crude palm oil (CPO) annually, and year-to-date it has realised an average price of RM2,300 per tonne for CPO. Its plantation business contributes about 25% to the group’s overall profit.
“We are upbeat on the prospects of CPO for 2014, driven by downward pressure on production and also increased demand globally,” he said.
Lodin also said the company had set in motion preliminary plans to explore opportunities in the oil and gas sector, where contributions were currently quite small as Boustead was only involved in the supply of certain systems and equipment. “We are cautious about the opportunities and would be looking at joint ventures with experienced partners,” he said.
Meanwhile, the group also said it was on track to complete the 50:50 joint-venture mixed development project in Jalan Cochcrane by 2016 with its partner Swedish home furnishing retailer IKEA.