Boustead sees benefit in maritime allocation

KUALA LUMPUR: Boustead Holdings Bhd hopes to benefit from the RM3 billion allocation in soft loans under the Maritime Development Fund announced under Budget 2014 last Friday, said group managing director Tan Sri Lodin Wok Kamaruddin.

“We are very much involved in shipbuilding [under Boustead Heavy Industries Corp Bhd], we hope in some way to get a slice of that allocation in the budget,” Lodin said.

Speaking to the press after Boustead’s presentation at the iCapital.biz Bhd 2013 Investor Day last Saturday, Lodin said the group could also benefit from the proposal in the budget to extend the pioneer status for hotels for another three years until December 2016.

Boustead, which owns the Royale Chulan, Royale Cherating and the Royale Bintang hotels under its property division, stands to benefit from this as it looks into more hotel developments for the group.

Lodin also said the increase in real property gains tax and purchase price limits on property purchases by foreigners should translate into more sustainable growth for the sector in the future.

On the group’s plan to list its plantation division, Lodin said once the privatisation of Boustead Al-Hadharah (REIT) is completed, it will proceed with the listing slated for the first or second quarter of next year.

“We are thinking of putting the estates owned by Al-Hadharah into our plantation division, and then list it,” he said.

The plantation division will contribute at least 25% to 30% to the group’s profit upon listing, Lodin said.  

“We are looking around to expand our plantation land, though confined to Malaysia for the time being,” said Lodin.

Boustead recently proposed to acquire 2,409.8ha of oil palm land in Lahad Datu, Sabah.

Lodin said he expects crude palm oil (CPO) prices to improve and hover around RM2,400 to RM2,600 per tonne. CPO futures have averaged RM2,378 this year.

As for Affin Holding Bhd’s acquisition of Hwang-DBS (M) Bhd’s financial service businesses, Lodin said the group would proceed with it once the deal is approved by the authorities.

“We are on track, and hope to finalise the merger and acquisition (M&A) by the end of this year,” he said.

Affin and Boustead have a common major shareholder in Lembaga Tabung Angkatan Tentera.

On Sept 4, Affin and Hwang-DBS signed an exclusivity agreement in relation to the former’s proposal to acquire 100% interest in HwangDBS Investment Bank Bhd and HDM Futures Sdn Bhd, 70% interest in Hwang Investment Management Bhd and 49% interest in Asian Islamic Investment Management Sdn Bhd.

The property division’s growth prospects include the development of Mutiara 482 Cochrane in Kuala Lumpur as well as a joint venture with Ikano Group for a commercial and residential development in the same area.

“We will try to replicate the development of The Curve in Jalan Cochrane. It will involve the set-up of the second IKEA in the country,” said Lodin.

Both developments are being undertaken by the group’s wholly owned subsidiary Mutiara Rini Sdn Bhd.

Under the group’s trading and industrial division, Boustead targets to build up to about 500 BHPetrol stations within the next five years. It currently operates 330 petrol stations nationwide.

Boustead group is one of the largest conglomerates in Malaysia, with involvement in six sectors — plantations, property, pharmaceutical, heavy industries, trading and industrial, and finance and investment. It had a market capitalisation of RM5.43 billion as at Oct 25 this year.

This article first appeared in The Edge Financial Daily, on October 28, 2013.