June 6, 2011

BP Plastics expects approval soon for rubber plantation in Cambodia


BATU PAHAT: BP Plastics Holdings Bhd expects to get an approval from the Cambodian government soon to start a rubber plantation there.

Chairman and managing director Lim Chun Yow said the application was “progressing well” and the company would make the necessary announcement once it received the greenlight.

He said BP Plastics decided to venture into rubber cultivation in Cambodia due to the availability of arable land and the low cost there.

“The outlook for natural rubber demand in the next few decades remain good as there is still no better alternative for natural latex,'' Lim told StarBiz after the company's AGM recently.

He said it was difficult to find land that could be turned into rubber plantation in Malaysia as much had been planted with oil palm.

Lim said although there were some pieces of land available, most were unsuitable for rubber planting.

The company had acquired 100% interest in BPPlas Plantation Sdn Bhd in June 2010 and set up a wholly-owned subsidiary, Baoman Rubber Ltd, in October.

It had applied for concession rights to cultivate rubber trees on 10,000ha government-alienated land in Mondulkiri, on the northeast of Cambodia.

“We already have some rough ideas on how we are going to invest to plant the rubber trees but we can't tell you the figure until we make the announcement to Bursa,'' added Lim.

On why BP Plastics decided to venture into rubber tree cultivation, which did not add synergy to its core business of manufacturing plastic products, Lim said what's most important was the activity would bring revenue to the company.

He said there were several public-listed property developers, plastic injection moulding companies and food-based outfits in Malaysia that ventured into their non-core activities such as plantation and mining.

For the financial year ended Dec 31, 2010, BP Plastics registered a net profit of RM17.13mil on revenue of RM220.75mil compared with RM15.61mil and RM175.21mil respectively in the previous year.

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