Kuala Lumpur Kepong Bhd is hopeful of its record performance in the year as the CPO market so far has been resilient in sustaining the prompt position of above RM5,000, its chairman R.M. Alias said in its latest Annual Report
He said that 2022 will be the year we focus on consolidating our assets, enhancing synergies and operational integration. “Approved capital expenditure will exceed RM1.8 billion but likely will stretch out over 2 years. Our focus will be on executing these projects well and managing our costs in an inflationary environment efficiently whilst improving productivity,” he said.
On its integrated refinery and oleochemicals complex currently under construction in East Kalimantan, he said that it will enable KLK to capture further margins from our approximately 80,000 hectares of nearby producing plantations. “This could be a game-changer once commissioned starting end 2022 and will enable us to have better control and traceability,” he said.
Meanwhile its Chief Executive Officer Tan Sri Dayo Lee Oi Hian said that its core plantation business more than doubled our pre-tax profit contribution to RM1.585 billion mainly the result of the unforeseen prices of CPO and PK, as well as the improved performance of its refineries.
He said that had its management not taken the earlier aggressive move to mechanise field operations, the slight decline of our Fresh Fruit Bunches (“FFB”) production (3.849 million tonnes) will be much more.
Admittedly, while our CPO yields of 4.66 mt/ha is unacceptably low, we take encouragement from our 98,000 hectares of mature palms in Indonesia averaging CPO yields of 5.15 mt/ha, though still a long way from our 6 mt/ha target.
