Kim Loong looking for more land to increase oil palm plantation

JOHOR BARU: Kim Loong Resources Bhd will look for more land in the country as part of its long-term plan to increase its oil palm plantation acreage.

Executive chairman Gooi Seong Lim said the company preferred to have the land located near its existing palm oil mills to achieve better economies of scale.

“No doubt it is getting more difficult to find new land for oil planting purposes now but we have to work harder to look for it,” he told StarBizWeek after the company AGM recently.

Gooi said the company would probably focus its search in Kelantan as it still has large tracts of land for plantation activities.

Sabah and Sarawak too have great potential for a plantation-based company like Kim Loong as the land areas in these two states have not been fully exploited or utilised for planting activities.

The company would either be acquiring the land or have joint-ventures with the existing landowners.

“But we prefer greenfield - our experience shows that it is much better, easier and more cost effective to work on a green area instead of a brown field,” he added.

However, Gooi said landowners were now becoming more demanding and were asking for high prices.

The company’s main focus now was to speed up the development of its plantations in Sarawak and maintain good relationships with native owners operating on native customary rights (NCR) land projects.

The recent High Court ruling on returning of native land would not have much impact on the company as only 20,234ha out of the disputed 80,937ha disputed land came under the NCR land, he said.

It has 23,512ha of oil palm estates in Johor, Sabah and Sarawak of which 1,093ha was in Kota Tinggi, Johor, Telupid (1,997ha), Sandakan (2,731ha) and Keningau (7,220ha) in Sabah and Sg Tenggang/Kranggas (10,471ha) in Sarawak and three palm oil mills in Johor and Sabah with a total processing capacity of 205 tonnes of fresh fruit bunch hourly.

For the financial year ended Jan 31, Kim Loong registered net profit of RM71.61mil on revenue of RM563.40mil compared with RM59.52mil and RM451.53mil respectively in financial year 2010.