Palm | Kelapa Sawit

This is written by my colleague, Rupa Damodaran.

CB INDUSTRIAL Product Holding Bhd (CBIP) expects profit to jump by 50 per cent this year on strong palm oil prices and prospects of more estates building and upgrading their palm oil mills.

"We should be doing much better as long as palm oil prices do not drop below RM2,000 per tonne," managing director Lim Chai Beng said after the company's annual general meeting in Petaling Jaya, Selangor yesterday.

Its engineering division, which contributes 60 per cent of its total earnings, is expected to improve although it has been affected by currency fluctuations as half of its contracts are quoted in US dollars.

For the first quarter of this year, results also improved by almost 50 per cent to about RM13 million from RM8.5 million previously, Lim said, adding that the second quarter is likely to be better due to the prices. Last year, CBIP posted RM49 million in pre-tax profit and turnover of RM331 million.

CBIP's has jobs worth RM350 million in its order book till the end of next year, Lim said. "With palm oil prices  hovering at RM2,500 per tonne, we can expect strong and promising growth in our engineering division," he said.

Lim said the economic crisis affected CBIP's profits last year as plantation companies deferred their milling projects. CBIP offers a range of palm oil mills designed to the requirements of oil palm planters, priced between RM3 million and RM40 million.

Lim said CB Industrial is also making a name within palm oil milling circles in Africa and Central America. It has started construction work on a milling plant in the Ivory Coast and three smaller ones in Guatemala and Mexico.