TSH aims to be major regional player

TSH Resources Bhd aims to become a regional plantation player in the next few years by expanding its planted hectarage specifically in Indonesia.

TSH chairman Datuk Dr Kelvin Tan Aik Pen said the company is on a solid financial footing and well positioned for strong earnings growth in the future.

“The company has a good story to tell and share with the public and investors as it is now doing very well and on its way of becoming a regional plantation player,” Aik Pen told Business Times in an interview recently.

TSH group managing director Datuk Tan Aik Sim said the company has a large unplanted area of about 60 per cent for expansion and plans to spend between RM100 million and RM120 million per year to expand its activities.

“We already have a sizeable landbank for expansion with high-yielding tissue culture to further boost productivity in the future. Our productivity will be further enhanced,” said Aik Sim.

TSH has total landbank of 98,996ha in Sabah and Indonesia. Out of the 98,996ha, a total of 38,784ha are already planted.
Aik Sim said 54 per cent of the company’s planted hectarage will mature next year which augurs well for the company as this translates to earnings growth.

The company has achieved a yield of about 30 tonnes of fresh fruit bunches (FFB) per hectare per year for its matured plantation in Sabah.

This is considered as productive and above average. The group foresees the current plantation in Indonesia to reproduce the results when they come to maturity.

"Earnings contribution from the plantation segment has increased from 95 per cent in 2010 to 98 per cent this year and will continue to be the main income driver for the company," said Aik Sim.

TSH also aims to have 85 per cent of its planted landbank made up of oil palm and the remaining rubber. This will be a good spread for both commodities.

The rubber plantations also provide the company a natural hedge in times when crude palm oil prices are not doing well.

The company owns seven mills in Sabah and Indonesia as well as a refinery jointly owned by TSH and Singapore's Wilmar group.

TSH also owns its own research and development arm, Wakuba TSH Biotech Sdn Bhd, which collaborates with the Malaysian Palm Oil Board to stay a step ahead of the industry with the aim of producing high quality ramets with high FFB and OER (oil extraction rate) yield supplying to its own estates and for sales to third parties.


Zaidi Isham Ismail, btimes.com.my