Hap Seng Plantations Holdings Bhd is cautiously optimistic of growth in 2009 due to focus on boosting productivity and minimising cost, says MD Datuk Edward Lee Ming Foo.
What are your views on the challenges for the local oil palm plantation players in 2009?
Crude palm oil (CPO) prices are currently reacting in tandem with falling (crude) oil prices. Concerns of slowing demand due to the global economic crisis have also clearly impacted prices.
Nevertheless, as we are always focused on the long-term perspective, we remain confident of the prospects of this much-needed commodity.
Moreover, there are always opportunities during challenging times. From the onset, since Hap Seng Plantations’ initial public offering in 2007, we have been exploring and identifying opportunities in terms of strategic plantation landbank to further enhance performance.
Hence, we are in a good position to continue seizing the opportunities that may present themselves, more so during these times, to benefit our shareholders in the long term.
What are the immediate and long-term strategic measures taken by the group to counter the sharp drop in CPO prices?
We intend to stay focused on our existing strategies that are aimed at continuous improvements in productivity and cost efficiency. On this score, we are today one of the country’s leading plantations in terms of productivity and cost efficiency.
Again, we look towards the long term. We are confident that prospects for this commodity remain encouraging due to its constantly expanding utilisation as a source for biofuel as well as food.
Do you expect the group’s consistent topline growth of 18%-20% to be disrupted in 2009?
While we are unable to comment on the exact percentage of our future earnings, suffice to say the operating environment next year will be challenging.
Nevertheless, with our continued focus to maximise productivity and minimise cost, we are cautiously optimistic that we will still be able to deliver a positive growth performance.
Is Hap Seng Plantations looking at holding back its oil palm landbank expansion in Sabah, given the downturn in CPO prices and the global economic turmoil?
On the contrary. As I’ve mentioned earlier, there are always opportunities in challenging times. We will continue to explore, identify and seize opportunities that can further enhance our performance.
Will the group continue to reward shareholders with its generous dividend policy in 2009?
Barring any unforeseen circumstances, we are optimistic that we will continue distributing up to 60% of our group’s after-tax profit annually to shareholders.
This is a dividend policy we have determined and stated in the prospectus in conjunction with our listing last year.
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