TH Plantations Bhd (THP), which is 67.9 per cent owned by Lembaga Tabung Haji, has set aside RM150 million in capital
expenditure (capex) for plantation development and to part finance the construction of a RM70 million palm oil mill in Sarawak.

Chief Executive Officer Datuk Zainal Azwar Zainal Aminuddin said the plantation development would include the planting and replanting of oil palm on its current hectarage. In 2007, THP acquired 10,000 hectares of land in Sarawak.

'Of the 10,000 hectares, 2,000 hectares will come into maturity this year and this would contribute towards achieving our targets.

'To cater for the requirement, we are constructing a 60 metric tonne palm oil mill which will be commissioned in 2012.

'About forty per cent of this year's capex would be set aside for the palm oil mill and that explains why this year's capex is on the high side.

'The remaining amount would come from next year's capex,' Zainal told Bernama after a press conference here today.

Currently, THP's total landbank stood at 39,113 hectares, of which, 96 per cent was planted with oil palm. It planned to increase the current land bank size to 50,000 hectares by 2012.

The company also managed Tabung Haji's 120,199 hectares of oil palm plantation.

Speaking at a press conference earlier, after the company's annual general meeting, Zainal said the company targeted to achieve 504,901 metric tonnes of fresh fruit bunches (FFB) this year compared with 463,949 metric tonnes produced last year.

It also aimed to increase yield to 22.03 metric tonnes per hectare compared with last year's output of 20.58 metric tonnes per hectare.

'We are not satisfied with the current yield, however, we are upbeat over the prospects of achieving higher yields this year,' he added.

On palm oil prices, Zainal said THP targeted a budgetted price of RM2,800 per tonne for the year.

'But as of today, the price is hovering around RM3,000 per tonne,' he said, adding that, hypothetically, revenue for the current financial year could reach RM420 million, from RM365.97 million, raked in last year if prices averaged around RM3,400 this year.

THP today declared its highest dividend payout of 12.5 sen per share, less tax, for the financial year ended Dec 31, 2010 against 8.5 sen per share declared previously.

It will pay out RM45.8 million to members, up from RM31.1 million paid out for 2009.

Zainal also said THP has shortlisted several parcels of land for acquisition in Sabah and Sarawak, Indonesia, Kalimantan and Sumatera.

'We hope to make an announcement by end-June,' said Zainal. -- Bernama