Friday, May 20, 2011

TDM on aggressive healthcare, oil palm drive

By Zaidi Isham Ismail

KUALA TERENGGANU: TDM Bhd, one of Malaysia's smallest plantation and healthcare companies, is on an aggressive mode to expand its landbank by more than threefold to 100,000ha in eight years, and own more hospitals from four at present.

TDM chairman Datuk Roslan Awang Chik said the company plans to spend RM30 million to set up its first oil palm mill in Kalimantan, Indonesia, once its hectarage reaches 10,000ha in the next three years, from 3,000ha at present.

"Ultimately, we aim to own a total of 40,000ha in Indonesia in eight years and will need an oil palm mill for each 10,000ha. Each oil palm mill will cost RM30 million.

"We have spent RM44 million on our oil palm estates in Indonesia and the first batch will start to impact our earnings in 2013," Roslan told reporters after its annual general meeting here yesterday.

TDM, which is 70 per cent-owned by the Terengganu state government, has a total of 33,284ha and two mills in Malaysia.

It aims to own a total of 100,000ha of oil palm estates, of which 30,000ha will be in Malaysia and 40,000ha in Indonesia.

The location of the remaining 30,000ha has not been decided yet.

TDM chief executive officer Badrul Hisham Mahari said the firm, which has a warchest of RM208.7 million, plans to open estates in Cambodia and Papua New Guinea but it has to balance its growth with dividend payments, cash reserves and staff strength.

Badrul said it is also on the lookout to buy or build new hospitals when the opportunity arises.

"We want to grow both our plantations and healthcare businesses but plantations will always be our core business."

TDM's plantation division currently accounts for 90 per cent of its earnings, healthcare (9 per cent) and food (1 per cent).

It started construction of its RM120 million Kuantan medical centre last year, which is slated for completion by the first quarter of 2013.

TDM also owns and manages the Kuala Terengganu Specialist Hospital and Kelana Jaya Medical Centre. It acquired the Taman Desa Medical Centre for RM16.5 million last year.

"We plan to build a new medical centre in Kuala Terengganu to replace the current one for RM150 million with 150 rooms."

Roslan said TDM's growth prospects are good as crude palm oil prices are expected to remain above RM3,000 a tonne from last year's average of RM2,659 a tonne, and ride on good export of oil palm products.

The company also plans to build its second biofertiliser plant, which can give it a 15 per cent, or RM10 million, savings on chemical fertiliser purchase.

Roslan said the firm is still in the process of selling its poultry business to Vision Poultry Sdn Bhd for RM9 million. It will be completed in the next two to three weeks and the state government has no plans to divest its 70 per cent stake.

TDM has a dividend policy of paying at least 30 per cent of its annual net profit. It employs almost 3,000 workers and has total assets of RM965.6 million with almost zero gearing.