PETALING JAYA: Boustead Plantation Bhd has allocated RM58mil for capital expenditure (capex) this year with a large chunk of the spending set aside for its replanting programme.

Vice-chairman Tan Sri Lodin Wok Kamaruddin said RM40mil would be allocated to replant 1,800ha of plantation, nationwide, while the rest would be utilised for the construction of staff and workers quarters, as well as, replacement and upgrade of plant and machinery.

“Year to date, we have replanted 30% of the areas.

“We are targeting to replant all the areas with new planting materials,” he told reporters after the company’s AGM in Petaling Jaya on Wednesday.

For the financial year ended Dec 31, 2016, Boustead Plantation’s pre-tax profit surged to RM276mil compared with RM95mil in 2015.

Revenue increased to RM708mil from RM615mil previously supported by gains, realised on disposal of lands in Kulaijaya (Johor) and higher palm product prices.

Moving forward, Lodin said crude palm oil (CPO) prices were expected to trade between RM2,600 per tonne and RM3,000 per tonne this year, after recording an average price of RM2,600 per tonne last year.

Among factors supporting CPO prices were Indonesia’s biodiesel programme, weak ringgit and higher crude oil prices, he said.

Lodin said fresh fruit bunches (FFB) production was also expected to recover this year from the El-Nino weather phenomenon last year.

He added that FFB production was expected to reach one million tonnes this year from 909,000 tonnes last year.

Lodin said the company was planning to develop land in prime locations on their own or through joint ventures.

Currently, he said, there were three pieces of land identified to have high value for development — 701 hectares in Penang, 647 hectares in Kulai (Johor) and 4,451ha in east Johor.

The company was looking to acquire new plantation areas within Malaysia to compensate the loss of plantation land which were either sold or converted into property development, he said.

Lodin said the company currently has a landbank of more than 80,000ha nationwide, with more than 60,000ha currently under cultivation. – Bernama