PETALING JAYA: Kim Loong Resources Bhd is optimistic that the current downtrend in crude palm oil (CPO) prices will not hurt its profit for the financial year ending Jan 31 (FY09).
Executive chairman Gooi Seong Lim said the company had locked in 25% of total CPO production up to December at RM3,400 a tonne and was not under pressure at this juncture.
He said even if CPO price were to drop to below RM3,000 a tonne and sustain for six months, its overall average price would still be relatively higher than RM3,000 this year against RM2,500 last year.
“The company is confident that the current downtrend in CPO price is temporary and anticipates it (CPO price) would not take long to shoot up again,” he said after the company AGM and EGM yesterday.
With a relatively tight national palm oil stock and uncertain soybean production, coupled with poor weather in the US, the tight vegetable oil supply would push CPO price back to its high.
Asked if Kim Loong would further lock in its production, Gooi said: “We will not sell below RM3,000 per tonne and do not think it’s necessary as the CPO price downtrend is unlikely to stay anyway.”
On its diversification into the palm nutraceuticals project, which involves the extraction of tocotrienol concentrates (a vitamin E concentrate), he said Kim Loong was currently busy building the distribution network to market the product.
“We are also in the process of capsuling the vitamin E product, which is in a soft gel form,” Gooi said, adding that the current production capacity of tocotrienols at its Kota Tinggi plant in Johor was 3,000 tonnes per year.
“We hope to find a niche market for tocotrienols in Japan, the US and China,” Gooi said.
The company also plans to sell in bulk to local pharmaceutical companies with strong network.
“We estimate a profit contribution from the palm nutraceuticals project of RM3mil to RM4mil yearly and return on investment in three to four years,” he said.
Meanwhile, Kim Loong is investing RM10mil each in a new solvent extraction plant for palm kernel in Kota Tinggi and another for fibre oil in Keningau, Sabah, for its downstream business.
On dividend payout, Gooi said Kim Loong had paid out 23 sen per share for FY09 to date, higher than its total dividend of 18 sen per share for FY08.
More Recent Palm Oil News 
- Crude Palm Oil Ends Up On Weekend Short Covering; Upside Limited
- Crude Palm Oil Recovers Late On Short Covering
- Crude Palm Oil Ends Down As Demand Prospects Weaken
- Crude Palm Oil Rises Slightly; Weak Demand Limits Upside
- Crude Palm Oil Ends Up On South America Crop Worries
- Crude Palm Oil Rises On Pre-Holiday Short-Covering
- Crude Palm Oil Falls Due To Bearish Export Outlook
- Crude Palm Oil Ends Higher On South America Weather
- Crude Palm Oil Ends Down On Profit Taking; USDA Report In Focus
- Crude Palm Oil Rises In Light Trade; USDA Data In Focus
- Crude Palm Oil Steady; South America Weather May Underpin
- Crude Palm Oil Ends Up In Light Trade; Fresh Cues Awaited
- Crude Palm Oil Ends Up On Weather Concerns; More Gains Likely
- Crude Palm Oil Ends Down On Profit Taking, Europe Worries
- CPO Ends Unchanged; May Slip Toward MYR3,200 After Recent Rally
PRO Palm Oil Live Market News
- European Veg Oil PM Palm Oil & Lauric Oil Prices – Feb 3
- European Veg Oil AM Palm Oil & Lauric Oil Prices – Feb 3
- India Edible Oil Prices Down On New Crop Arrival, Strong Rupee
- India Commodity Prices Including Palm Oil – Agriculture
- Crude Palm Oil Ends Up On Weekend Short Covering; Upside Limited
- Malaysian PM Cash Market Prices For Palm Oil – Feb. 3
- Indonesia Eyes Lower Pakistan CPO Duty, Adds Trade Path To Central Asia
- China Soybean Futures Retreat From 12-Week High On Profit Taking, Argentina Rains
- Malaysia Cash Palm Olein Prices Slip On Tepid Demand
- China Dalian Commodity Exchange Grain Stocks, Feb 03
- China Dalian Grain Futures Closing Prices, Volume
- BMD Crude Palm Oil (CPO) Futures Lower Midday; May Fall More
- Malaysian AM Cash Market Prices For Palm Oil – Feb. 3
- Malaysia May Reform CPO Export Tax Structure -Report
- BMD Crude Palm Oil (CPO) Futures Steady; To Remain Rangebound
