FORGING AHEAD - Tradewinds Plantation Berhad

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PERFORMANCE REVIEW
CHAIRMAN’S
STATEMENT
While the latest financial results attest to
the Group’s solid fundamentals, we will
continue to practice financial prudence,
incurring capital expenditure on a ‘need
basis’. We will keep a close watch on
managing our spending, the priority
being on programmes to enhance
p r o d u c t i v i t y a n d o p e r a t i o n a l
efficiencies. At the same time, a raft of
measures and strategies will be rolled
out to enhance on the existing cost
control measures. Among others, these
include the adoption of labour-reducing
technologies, mechanisation of field
operations and widening the coverage
of centralised purchasing functions to
lower input costs.
For 2011, closer attention will be given
to yield enhancement. Apart from
improved agronomic management
practices, we will also embark on
utilising high-yielding elite planting
materials through the tissue culture
programme.
Efforts will also be channelled to further
improve efficiency in our mills
operations. The focus will be on
achieving an improved utilisation rate
vis-à-vis a higher throughput of quality
third-par ty crops. We are also
strengthening operational management
via the regionalisation of mill advisory
functions and the establishment of a mill
engineering committee.
TRADEWINDS PLANTATION BERHAD
Annual Report 2010
At the current rate of FFB production,
the Group’s mills are already nearing
full capacity. Plans are in the pipeline to
construct three additional mills in stages,
with the first set to take off sometime in
2011 with the state-of-the-art milling
technology which will have a capacity
of 40 tonnes per hour and will be
located in Kuala Suai, Miri, Sarawak.
OUTLOOK AND PROSPECTS
Financial Year 2011 is already shaping
up to be a promising one. Global
supply of vegetable oils remains tight
while the prospects of a shortage of
rubber continue to hang over the world.
Due to growing unrest in the Middle
East, crude oil prices have already
surged past the US$100 per barrel and
positively impacting commodity prices,
including those of palm oil and rubber.
In the first quarter of 2011, CPO prices
were already trading above the industry
expectations of RM3,000 per tonne
compared to an average of RM2,701
per tonne achieved in 2010. With
higher crude oil prices, many countries
will also be encouraged to turn to palm
oil as a feedstock for the manufacture of
bio-fuels. Meanwhile, global rubber
prices had already rallied to fresh
historical highs in 2010. Supported by
healthy demand by the tyre and other
rubber-based industries and strong
imports from countries like China, the
price of rubber is expected to continue
its upward trajectory in 2011.
The Group is well positioned to meet the
global demand for palm oil, with 49%
of our planted area currently at its
prime. Meanwhile, rubber is set to
contribute positively to Group’s revenue
when our subsidiary, Tradewinds
Corridor Sdn. Bhd.’s rubber plantation
reaches maturity in subsequent years.
While we have enough land in reserves
to support our development plans for
the next four years or so, we will
continue to explore opportunities to
expand our landbank.
Moving forward, we are exploring for
the right opportunities to move further
down the value chain by investing into
the downstream businesses to further
enhance the long-term shareholders
value. As we progress, downstream
expansion will enable us to achieve the
goal of vertical integration across the
entire spectrum of our palm oil business,
which is in line with the Company’s
vision to be an integrated agri-business
organisation. If the proposed acquisition
of Mardec is approved, this will also
provide a strategic fit to our plans to
move further downstream in the rubber
sector. Mardec has a proven track
record in the processing and trading of
natural rubber and the manufacturing of
value-added rubber and polymer
products.