Proposed plantations merger up to shareholders, says Nazir

Since last week, CIMB Investment Bank have proposed to use Synergy Drive Sdn Bhd to merge the three largest plantation companies in Malaysia, namely the Sime Darby Bhd, Golden Hope Plantation Bhd and Kumpulan Guthrie Bhd.

According to the bank, by merging the plantation operation, the new company can cut cost and improve profit and it will become the world largest plantation company that contribute 8% to the world total palm oil production.

Proposed plantations merger up to shareholders, says Nazir
By Surin Murugiah

CIMB Investment Bank is leaving it up to Sime Darby Bhd, Golden Hope Plantations Bhd, Kumpulan Guthrie Bhd and their shareholders to decide on the proposed RM31.4 billion merger of the three companies by Dec 27.

"We have made presentations to the boards (of the three companies) and tabled the offer.

"We now leave it to them to decide," CIMB Group chief executive officer Datuk Nazir Razak told reporters in Genting Highlands on Dec 5 when asked to comment on the merger proposal.

He said the companies had 30 days to decide on the offer by Synergy Drive Sdn Bhd, which is the proposed special purpose vehicle to group together the three companies and their subsidiaries.

Asked what would happen if no outcome was achieved by that date, Nazir said: "We will cross that bridge if we have to. The offer date cannot be in perpetuity."

CIMB Investment Bank announced on Nov 27 of Synergy Drive's offer to buy the assets of the three plantations companies. It will see their existing major shareholders Permodalan Nasional Bhd, retaining control of the new enlarged entity.

Meanwhile, Sime Darby chief executive officer Datuk Ahmad Zubir Murshid told reporters in Kuala Lumpur that its directors planned to meet by Dec 25 to consider the proposed merger.

Renewable Energy from Palm Waste

Not only we can get bio-diesel from crude palm oil (CPO), but the Empty Fruit Bunches (EFB) that used to be production waste from the palm oil mill has since become quite valuable. Instead of burning liquid petroleum gas (LPG), some factories have modified their furnaces to burn EFB as fuel. For every 1 tonne of CPO produced, the palm oil mill will produce 1.1 tonne of EFB as waste. Therefore, for countries like Malaysia and Indonesia where the oil palm industry has matured, you can get unlimited supplies of EFB.

The Indonesian government has looked into this seriously and the result is promising.

According to Directorate General of Estate Crops, Ministry of Agriculture, 5.3 million ton of EFB was produced throughout Indonesia in 1997. Utilization of this amount of EFB as power plant fuel would potentially result in generation of 229 MWe.

The project described in this report is a power plant combusting 220,000 ton/year empty fruit bunches (EFB) in a specially designed high-pressure boiler and generating 10.3 MW electricity with a steam turbo-generator. The plant will be located in Pangkalanbrandan (regency of Langkat), a small town about 80 km northwest of Medan, the capital city of North Sumatra province (see Map). The EFB is collected from six existing palm oil mills and transported to the site. EFB is a technically challenging fuel due to high moisture content, fibrous nature and the high potential of the ash to slag in the furnace. Equipment has been specifically designed for dealing with this waste. The estimated economic life of the power plant is 20 years.

The objective of this project is to generate electricity for sale to the grid of PLN (the State Electricity Company of Indonesia) through utilization of surplus biomass residue from palm oil mills. This renewable energy project will offset the requirement of diesel generation to satisfy the ever-growing demand of electricity in the surrounding area. Thus this project would fit well to the principles and rules of Clean Development Mechanism (CDM). Potential estimated net reductions in Greenhouse gases (GHGs) emissions are 55,650 ton CO2-equivalent per year. (PDF)

Carotech MD: Incentives for biotech a good start

Seems like all the rage and venting of Carotech MD, David Ho Sue San has brought him some good news. StarBiz reported government announced incentive for Biotechnology industry as below.

THE incentives given for biotechnology are an encouraging start, but more can be done to “fast-track” the industry's development, said Carotech Bhd managing director David Ho Sue San.

“Biotechnology is a high investment and risky business.

“Locally, there are many individuals with bright ideas in the biotech industry but are afraid to take their ideas further due to financial constraints and lack of support,” he said.

He said the Government had been proactive in creating a biotech centre or resource base.

However, he added, more could be done to attract individuals as well as companies, both foreign and local, to set up their bases here.

Ho welcomed as “positive and encouraging” the incentives for Bionexus-status companies that merge with or acquire biotechnology companies within the next five years. These companies will be given stamp duty and real property gains tax exemptions.

“It is also good that the Government has given more incentives for biotech companies to set up bases here,” Ho said.

He noted that many developed countries like the US had provided attractive packages and incentives to entice more industry players and experts in specific fields of biotechnology from around the world to do pioneering work in their countries.

“Our Government should consider providing grants to biotech companies that show encouraging work in research and development that potentially could be commercialised,” he said.

Ho said the Government might want to look at providing specific and customised packages to attract individuals or companies to work here.

Malaysian American Electronics Industry chairman Datuk S.H. Wong said the RM210mil allocation for developing the biotechnology sector was consistent with the Penang state government's effort to build a biotech hub.