Published December 24, 2008

Sime would be happy with CPO at RM1,800

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(KUALA LUMPUR) Malaysia's largest palm oil producer Sime Darby expects the price of crude palm oil (CPO) to stay between RM1,800 and RM2,000 (S$747-830) a tonne next year, the Edge business weekly reported.

'I'm happy with RM1,800, provided fertiliser prices come down,' said Ahmad Zubir Murshid, Sime Darby's group chief executive officer.

Sime's current production cost is about RM1,133 per tonne and Mr Ahmad hopes it will drop to below RM700 per tonne.

Sime courted controversy last week with its proposal to privatise the country's top heart hospital.

Its bid to acquire a 51 per cent stake in IJN Holdings Sdn Bhd, the operator of the National Heart Institute, has effectively been rejected by the government following widespread criticisms that the poor will no longer be able to afford seeking treatment there.

The company is in the process of setting up a refinery in Port Klang and another in Kalimantan. 'The current capacity expansion only caters for our own consumption,' Mr Ahmad said. The refineries will be capable of producing 600,000 to 800,000 tonnes of CPO per year.

Sime, the world's biggest listed plantation company, owns 600,000 acres of oil palm plantations in Malaysia and Indonesia.



It has the biggest property landbank in Malaysia, with the bulk of the land located on the fringes of Kuala Lumpur. -- Reuters