Posted by lmenwe > 2014-02-26 04:08 | Report Abuse

Totally ridiculous! Even the best company in the industry like United Plantation and First Resources also unable to achieve this kind of profit margin. The profit margin is gross profit margin. Besides that the article doesn't take into account the age profile of the trees! The trees are below 5 years to achieve the optimum production level it need at least another 5 years! If CPO price is pegged at RM 3k/tonne even with the most optimistic assumption the net profit is no way to reach 87 million. Assume a profit margin of 30% and FFB/ha of 28 tonnes the CPO price must reach a whopping RM 4,215. A profit margin of 30% only achievable on the most favourable year. Furthermore output of 28 mt/ha and profit margin of 30% are not achievable given WTK's land are located at peat soil. Moreover the wood business are highly cyclical how sure are you that after 5 years the price will remain favourable?

Posted by tanhoonthean > 2014-02-26 06:35 | Report Abuse

plesa