MKHOP SEEKS TO CAPITALISE ON HIGHER CPO PRICES AMID TIGHTER GLOBAL SUPPLY

KUALA LUMPUR, April 30 (Bernama) -- The tighter global crude palm oil (CPO) supply resulting from the ongoing El Nino dry weather in Malaysia is expected to support the CPO prices, said MKH Oil Palm (East Kalimantan) Bhd (MKHOP).

Chairman Tan Sri Chen Kooi Chiew @ Cheng Ngi Chong said this presents a favourable outlook for the company as it focuses on improving production efficiency to enhance oil extraction rates to capitalise on the higher CPO prices.

“As we progress, we are confident in the long-term growth prospects of the oil palm industry, driven by the upward trajectory of global population and escalating demand for edible oils and fats worldwide," he said in a statement in conjunction with the company’s debut on the Main Market of Bursa Malaysia today.

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He, however, did not give a CPO price forecast.

MKHOP’s share price opened at 63 sen, representing a premium of 1.6 per cent over the issue price of 62 sen, with an opening volume of 12.134 million shares.

The company plans to use the RM136.4 million proceeds raised through the initial public offering (IPO) to expand their plantation estates by acquiring land near its existing estates.

“Our focus will also be on enhancing operational efficiency, increasing processing capacities, and diversifying product offerings through new machinery and equipment, as well as establishing a new palm kernel crushing facility,” Chen said.

He said that as part of MKHOP’s continuous initiative to improve the living conditions of its workforce and their families, it will construct new staff quarters and upgrade existing ones.

“We will also expand coverage of electricity supply at our plantation estates, reducing our reliance on diesel generators,” he added.

Meanwhile, during a press conference today, MKHOP executive director Datuk Andy Lee Khee Meng said the company stays optimistic that its CPO production would not be affected by climate changes, especially during the El Nino season.

He said the company has utilised soil stopper built in the plantations’ drainage system to ensure that there is always water inside the plantations.

“When it comes to El Nino, the effect comes about if there is no water in your plantation. Then generally, the water uptake in your plantation would be affected including the fruiting, the flowering.

“So with this (stopper) in place -- and we have already practised this for many years already -- we can see that our crop does not get affected during El Nino like the rest of the industry,” he said.

Lee also said that even when the whole CPO industry is affected by El Nino, CPO prices will be on the right track, which can maximise the company’s revenue further.

-- BERNAMA