Golden Palm Growers to sell all plots by 2013

KUALA LUMPUR (Mar 13): Golden Palm Growers Bhd, a subsidiary of Australian Stock Exchange-listed Sterling Biofuels International Ltd, is confident of selling all the plots under its golden palm growers (GPG) scheme by the end of 2013, according to group executive chairman Andrew Phang.

"I think by the end of next year, we'll be able to sell all our plots," said Phang at a media luncheon on Monday.

The group is developing 11,000 acres (4,400ha) of oil palm plantation in Gua Musang, Kelantan, under the GPG scheme. One grower plot entitles its owner to a net yield for the 23-year period, after which investors will vote to either sell the plantation or to replant new trees.

To date, a total of 44,000 plots have been created, with the group retaining 30% of the land, while the remainder will be sold to the public. The quarter-acre plots are sold at RM8,800 each. As at Feb 8, 14,601 of the 30,800 plots  available to the public had been sold.

Phang said the group guarantees a 6% per annum (pa) return for the first six years and a minimum of 9% pa from the seventh year onwards if crude palm oil (CPO) prices are above RM1,500.

"We would hope to match last year's performance and at least 8% in returns this year," he added. In 2010, the group declared a 6% return with an additional 2% discretionary bonus.

Phang explained that assuming CPO prices is at current levels (RM3,300) and at the point of maturity of the trees between the 8th and 20th year of growth, the scheme may yield returns of between 12% and 25% pa for investors.

At present, he said the group is always on the lookout to expand its landbank and may even buy other young existing plantations in the country as the cost of land is not cheap.

"We are looking at maybe Kelantan and possibly Kedah. Sarawak has much land, but it has distinctively different land laws and indigenous issues to deal with. Outside Malaysia, Kalimantan in Indonesia is a great area but we are not ready to take any risks right now," Phang said.

"Depending on where opportunities are, if the land is not suitable for oil palm, then we may use that land to start a different scheme — to plant rubber, perhaps," he added.