Published June 22, 2009

M'sia's CBIP to grow plantation land bank

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(KUALA LUMPUR) Palm oil mill builder CB Industrial Product (CBIP) is buying plantation land in Indonesia as it wants to grow its plantation land bank, its head said on Thursday.

'We have to create growth for our plantation (division),' CBIP managing director Lim Chai Beng told Reuters. The company aims to grow its plantation land bank to 60,000ha in five years from about 14,000ha now, he said. Currently, oil palm plantation makes up about a quarter of CBIP's earnings, with the remaining coming from its engineering division.

The engineering division builds palm oil mills and manufactures palm oil equipment for major planters such as IOI Corp, Sime Darby and Wilmar International .

Mr Lim said he expects contract flows for the palm oil mill business to improve in the second half of the year as crude palm oil prices recovered from last year's low.

The company is expected to secure new contracts worth about RM200 million (S$82 million) in the second half of 2009, up from about RM120 million in the first half. -- Reuters