IOI Corporation

'Reading' faces of Asia's most prominent tycoons

2011-07-11T10:38:00.000+08:00

This is the first of a three-part series featuring extracts and information from Faces Of Fortune, a new book that ‘reads’ the faces of 20 of Asia’s most prominent tycoons.

DO you know that simply by looking at a person’s face, you can tell his character and where he’s headed – that is, if you know the Chinese art of face reading, or Mian Xiang.

In ancient times, Mian Xiang was used by the emperors to choose imperial officers and masters, their disciples.

In Faces Of Fortune, author Tee Lin Say uses Mian Xiang to pick out 20 of Asia’s most prominent tycoons, and then explain why investors should place money on their companies over the next 10 years.

Datuk Seri Nazir Razak, CIMB Group

Datuk Seri Nazir Razak’s cheekbones pack willpower.

Nazir Razak is the youngest son of Malaysia’s second Prime Minister, and the brother of Datuk Seri Najib Tun Razak, the current PM. He is also the brainy group chief executive officer of the country’s premier investment bank, CIMB Group Holdings Bhd.

Early this month, speculation was rife that CIMB was thinking of acquiring RHB Capital Bhd. Now that this has come to an premature end, does this mean CIMB will be wedged in its consolidation phase, or are there bigger things in store from Nazir?

Looking at Nazir’s features, it’s pretty obvious that the best is yet to come for CIMB. We would safely say that the stock is a screaming buy at this point.

In 2012, Nazir will be 45 years old, or 46 in Chinese years. In Mian Xiang, this age point is represented by the left cheekbone.

The cheekbones represent not just Nazir’s age luck, but also his willpower and ability to wield power. And he sure has loads of that.

A major part of Nazir’s success at CIMB was achieved during his thirties, when the age points were in his eyes. But his eyes cannot quite compare with the width and size of his mouth.

In Mian Xiang, a big mouth signifies influence, power and lots of clout. Have you ever seen a tycoon with a small mouth? Rarely.

When Nazir turns 52, the age point will go to his superior mouth. So don’t be surprised if CIMB is an entirely different entity six years from now. It might even own an American bank by then!

We do not foresee organic growth for CIMB. Based on Nazir’s face, the company’s sensational ride will continue right into his fifties.

Tan Sri Quek Leng Chan’s most outstanding feature is his lips.

Tan Sri Quek Leng Chan, Hong Leong Group

Hong Leong’s Tan Sri Quek Leng Chan is famed for buying low and then selling for a tidy profit, a skill he has mastered over the years.

Investors may recall that in 2001, he pocketed RM11.bil – the highest price ever paid for an Asian bank – when he sold his controlling stake in Dao Heng Bank of Hong Kong to Singapore’s DBS Bank.

It certainly looks like the elusive Quek is coasting on second wind at the age of 71: Hong Leong recently acquired EON Capital Bhd for RM5.06bil, a move that makes it the fourth largest bank in Malaysia.

What is in his face that tells us this “master dealmaker” still has the appetite and drive for acquisitions and opportunities?

His triangle-shaped eyes burn with Sha-qi a fire that reveals “ambitions that need to be achieved”. Such eyes reflect a person whose mind is alert. He is hardly naïve and is unlikely to be swindled in the game of business.

Quek’s most outstanding feature is the corners of his lips. This area, known as the Jin Lu (meaning Gold Point), represents the ability to persuade or influence others, be it with words or sheer physical presence.

Quek’s Jin Lu is well-defined and long, a strong sign that we are looking at a man who is adept at making deals.

On top of that, his lips are flagged. A flagged mouth is one where the middle indentation on the upper lip forms the letter ‘M’. This denotes that Quek is very skilful in negotiation and has the gift of persuasion. What he says has a big impact on others.

Watch his moves as things are about to get very interesting for the Hong Leong Group.

Tan Sri Lee Shin Cheng has unique ‘killer eyes’.

Tan Sri Lee Shin Cheng, IOI Corp Group

Plantation conglomerate IOI Corp Bhd is currently involved in a tangle with The Roundtable On Sustainable Palm Oil (RSPO) over land disputes and illegal deforestation.

Some analysts say IOI’s reputation will be dented, and as a result, there will be downside pressure on the stock in the short-term.

Well, if only these analysts knew Mian Xiang. Then they would say that the dispute is merely a glitch when viewed alongside the grand slam that chairman Tan Sri Lee Shin Cheng is poised to deliver.

In fact, now is the best time to participate in the company’s growth because when Lee turns 73 in 2012, his luck cycle will improve substantially.

If you know face reading, you’ll see that Lee’s Mian Xiang is an open book of triumph because his face qi is glowing.

The easiest way to evaluate whether a person is experiencing good luck is to look at the qi of his face and eyes. Lee’s eyes are extremely sharp and alert. This signifies a strong spirit and hunger for more. The tips slant upwards, which shows that no detail escapes him. With such eyes, you can be sure that he’s still calling the shots in IOI.

Lee has one feature that is quite unique. Look closely and you will see a line that cuts into his Life Palace, that is, the space between the eyebrows. In Mian Xiang, this is called the Needle Piercing into the Life Palace.

You have to be pretty accomplished to handle the Needle. It pinpoints intelligence and shows that Lee is ahead of the game. Here is someone who is able to pick up cues before others even realise they are there.

Consensus on IOI’s stocks may be neutral now, but looking at Lee’s “killer” eyes, it’s obvious he will not be satisfied with rewarding shareholders with mere dividends.

‘Faces of Fortune: The 20 Tycoons To Bet On Over The Next 10 Years’ will be available at Joey Yap’s ‘Wealth & Destiny’ seminar in Kuala Lumpur on July 31, and leading bookstores from August. Visit masteryacademy.com or call 03-2284 8080.

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Parent firm gives IOI Properties the edge

2009-07-20T17:42:00.000+08:00

Tuesday, June 23, 2009

Artist’s impression of Pinnacle Collection. Datuk Lee Yeow Chor (inset) says the company is closely monitoring the Singapore property market to ensure the timely launch of the projects

IOI Properties Bhd will be leveraging on the financial strength of its parent, IOI Corp Bhd, to build a greater presence in the Klang Valley and Singapore property markets.

Since being taken private in April, the 95.33% subsidiary of IOI Corp has greater liberty to plan and decide on the direction and projects it wants to undertake.

IOI Corp group executive director Datuk Lee Yeow Chor said although the level of activities would not change much from what the company had done previously, it was in a better position to leverage on the group’s financial strength to facilitate funding requirements for land acquisitions and move projects ahead.

According to Lee, property is all about holding power and having the financial strength to hold out and mitigate against the prevailing challenging market conditions, including slow sales; are important for property companies.

Despite the severe market crunch in Singapore since February last year, IOI Properties proceeded with the construction of its Seascape Collection residences on Sentosa Cove. The construction of the project has reached 40% to-date.

The 1.44-ha Seascape project is a 50:50 joint venture between IOI Properties and its Singapore partner, Ho Bee Investment Ltd.

It comprises two eight-storey condominium blocks of 151 units of various sizes, tentatively priced from S$2,500 to S$2,800 per sq ft.

IOI’s second project in Singapore, the Pinnacle Collection – which is 65%-owned by IOI Properties and 35% by Ho Bee – will be undertaken by Pinnacle (Sentosa) Pte Ltd. The 2.12-ha site was tendered for S$1.1bil.

The 99-year leasehold land is the final piece of condominium land to be launched by Sentosa Cove and has a maximum permissible gross plot ratio of 2.6.

The site will have seven 18-storey blocks and one 20-storey block of luxurious condominiums. It is one of the two condominium parcels flanking the entrance of the marina leading into Sentosa Cove.

Lee said the launch of The Pinnacle would depend on the take-up for the Seascape residences.

IOI has plans for a third project in the city state, comprising medium to medium high-end residences on a 1.44-ha site near Novena Square and Orchard Road.

He said the company was closely monitoring the Singapore property market to ensure the timely launch of the projects to optimise their value.

“The completion of the two integrated resorts in Singapore later this year will be the catalyst for further economic growth and market upturn in the city state,” Lee said.

In the last two months, the market for medium to mid-high end property in Singapore had shown encouraging signs of an upturn, he added.

Things are also looking up for the Klang Valley property market and demand is expected to recover by year-end.

For the financial year ending June 30, 2010 (FY10), project launches worth RM580mil have been lined up in the Klang Valley, including in Bandar Puteri, Bandar Puchong Jaya and IOI Resort.

A new greenfield development, Sierra Puteri, a mixed housing development on 194ha in the Seri Kembangan-Cyberjaya area, is also in the pipeline for launch in the first quarter of next year. There will also be a 22-ha commercial precinct in the RM2bil development. Lee expects the company’s property sales to bounce back from RM630mil recorded last year to RM650mil next year. This year, it expects to turn in sales of RM610mil.

“We will also be placing more focus on investment properties. For FY10, we expect more than 15% of the company’s earnings to come from property investment and the balance from property development,” he said.

Last year, income from property investment contributed 10% to the bottomline of IOI Properties and about 22% to 25% of IOI Corp’s earnings.

General manager for group operations Lee Yoke Har said besides leveraging on the good location of the company’s land bank and strong branding, it also emphasised on good community relations and programmes to promote wholesome living and safe communities in all its townships.

It set up a dedicated community website, Myioi.com, in 2000 that has become a popular communication tool for residents of its projects.

Other initiatives include the IOI Privilege card, which is a discount card offered to residents when they patronise any of the participating outlets in the townships.

“The next project to be rolled out will be free WiFi within our townships and ‘intercom connection’ for residents via the 015 IP phone,” she added.

By The Star (by Angie NG) (Posted on 22 June 2009)
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Malaysia IOI says worst is over for palm oil planters

2009-07-20T17:41:00.001+08:00

July 2, 2009.

IOI Corp, Malaysia’s No 2 planter, said on Thursday that the worst was over for the plantation sector as palm oil prices have recovered from last year’s slump although M&A activity would be muted.

Earnings of Malaysian palm oil producers plunged in the first quarter as crude palm oil prices more than halved from a year ago.

IOI, valued at $8.37 billion, saw net profit nearly wiped out during January-March due to weak crude palm oil prices and large foreign translation losses on its U.S. dollar borrowings.

Sime Darby , Malaysia’s top planter, reported a 85 percent drop in net profit while third-ranked Kuala Lumpur Kepong saw net profit down 52 percent in the same period. “It’s quite obvious it will be better. The industry including ourselves expects to see much better fourth quarter (April-June) operating results,” IOI Executive Director Lee Yeow Chor told Reuters at the company’s headquarters in the administrative capital of Putrajaya.

Malaysia is the world’s second-largest palm oil producer after Indonesia.

Crude palm oil prices hit a record 4,486 ringgit a tonne in March 2008 before collapsing at the height of the global financial meltdown and triggering speculation that distressed plantation firms starting out would sell.

But Lee said the opportunities for merger and acquisition in the sector are hard to find now as the palm oil price recovery helped smaller firms hold out for better deals.

“Because the sharp price drop has not really been for a long time, the pressures on them (smaller planters), in terms of cashflow or repayment of bank borrowings is not so great.”

BRIGTHER OUTLOOK

IOI, which owns oil palm estates in Malaysia and Indonesia, saw net profit for the third-quarter to March plunge 94 percent to 37.36 million ringgit from a year ago on an unrealised forex translation loss of 232.4 million ringgit. [ID:nKLR496786]

The sharp drop in third-quarter earnings was due mainly to “a lot of translation adjustments” on its U.S. dollar debt, said Lee, adding that IOI expects the forex losses to reverse in the upcoming quarterly results.

“For fourth quarter with the weakening of the U.S. dollar, from end-March of around 3.63 ringgit, we expect to have some gains in currency translation for U.S. dollar borrowings,” said Lee.

“We borrow U.S. dollars, because it corresponds with our palm oil revenue, so that is a natural hedge between our borrowings and receipt of revenue,” he added.

BANKING ON ASIAN DEMAND

Palm oil prices have now recovered more than 60 percent from a low of 1,331 ringgit ($378.8) per tonne in October on surging Asian demand as well as tight Malaysian palm oil stock levels in the first few months of 2009.

“We have always thought that the low price level in the first quarter of this year was not a sustainable level to begin with. We have always expected the price to move up,” said Lee.

“The major consuming countries, China and India, their economies have not been that badly affected by the prevailing global downturn,” he said.

Lee said Malaysian palm oil production should pick up in the second half of the year due to the seasonal uptick in output as yield stress fades. He pegged June palm oil stocks at 1.5 million tonnes, an increase of 9.5 percent from a month earlier.

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Backers Don't Buy 'Friendly' Palm Oil

2009-07-20T17:39:00.000+08:00

July 15, 2009

KUALA LUMPUR, Malaysia -- European consumer groups and nongovernmental organizations have said they want environmentally friendly palm oil. Malaysian producers of palm oil that have made the switch are discovering that it is still a hard sell.

The price premium for palm oil certified as produced through sustainable plantation practices has been shrinking since the first eco-friendly palm oil was shipped to European markets last November, and producers say it may need to disappear if they are to regain business in the key European Union market.

Producers say the difficulty in selling higher-priced sustainable palm oils highlights the double standards of those who criticize the industry but buy the cheaper, uncertified oil that they say is harming the environment.

"We [plantation firms] have complied with the strictest criteria on sustainability. The multinational companies, which also are end-users of palm oil, should not preach wine and drink water," said Carl Bek-Nielsen, vice chairman of United Plantations Bhd., the first Malaysian company certified as a sustainable producer.

Palm oil is a vegetable oil used in products ranging from margarine and cosmetics to feedstock for biofuel. It competes with soybean oil. Premiums for sustainable palm oil have shrunk to between $10 and $15 a ton, from $45 to $50 a ton before the global financial crisis took a toll on European economies late last year and demand waned, said Roy Lim, group plantations director of Kuala Lumpur Kepong Bhd., Malaysia's third-largest listed palm-oil producer by stock-market value. Noncertified palm oil currently sells for about $565 a ton, he said, already down more than 50% from last year's peak.

Consumer-goods companies like Unilever PLC, Nestlé SA and Kraft Foods Inc. repeatedly have said they would seek to buy palm oil produced with minimal harm to the environment. All support the goals and efforts of the Roundtable for Sustainable Palm Oil, formed by World Wildlife Fund and Unilever, which is adopting stringent and sustainable practices for palm-oil cultivation.

Although the combined annual production capacity of RSPO-certified producers in Malaysia, Indonesia and Papua New Guinea exceeded 1.57 million tons of certified palm oil and palm-kernel oil at the end of May, only 15,000 tons of certified oil has been sold since certification started late last year.

"At the moment, demand for certified palm oil is only 1% of the [produced] volume, so this has been disappointing for the growers and we feel the food companies should keep their end of the promise," said Lee Yeow Chor, executive director of Malaysia's second-largest palm oil producer, IOI Corp. Bhd.

IOI, KLK and United Plantations say they are committed to producing sustainable palm oil, even if the price premium disappears.

Nestlé remains committed to sustainable sourcing and only buys products derived from crude palm oil from reputable manufacturers, spokeswoman Nina Backes said.

Kraft spokesman Richard D. Buino said that while the company supports the RSPO's efforts, "it is clear more work is needed to consolidate standards, enforce principles, verify traceability along the supply chain and ensure competitive pricing to bring certified palm oil to market. We're monitoring the RSPO process and actively engaging our suppliers to monitor their certification efforts to find viable options for sourcing sustainable palm oil."

Neither Nestlé nor Kraft directly addressed purchases of Malaysia's certified palm oil.

Officials from Unilever, which purchases between 1.3 million and 1.5 million tons of palm oil annually, couldn't be reached for comments. The Anglo-Dutch consumer-goods giant announced in 2008 that it was committed to completely switch to certified palm oil by 2015.

Write to Shie-Lynn Lim at shie-lynn.lim@dowjones.com

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#3 Lee Shin Cheng

2009-07-20T17:38:00.000+08:00

Net Worth $3.2 billion
Age 70
Marital Status Married, 6 children
Source palm oil

Former plantation field supervisor heads ioi Group, one of world's leading operators of palm oil plantations, refineries. Took its IOI Properties private in April. IOI's stock has doubled since November but still down a third since last year amid falling commodity prices.

Source here

IOI's Strategic Shuffling Of Results

2009-05-16T17:20:00.000+08:00

IOI Corp Bhd posted a 93.8% drop in net profit to RM37.36mil in the third quarter of its financial year ending June 30, compared with RM601.64mil in the corresponding period last year. The decline was mainly due to unrealised forex losses and lower contribution from its manufacturing and property business.

The company’s revenue dropped 12.2% to RM3.096bil in the third quarter compared with RM3.525bil a year earlier. Earnings per share was 0.63 sen versus 9.89 sen previously. The company declared a dividend of three sen for the quarter. IOI Corp said overall, the group’s results for the current financial year were expected to be lower than the previous year’s record but still satisfactory in the light of current conditions.

In a filing with Bursa Malaysia yesterday, the company said its plantation segment reported a 6% increase in operating profit to RM1.38bil for the nine months of the current financial year, compared with RM1.3bil in the same period a year ago. “The better performance is due mainly to higher CPO prices realised from the forward sales entered into during the second half of financial year 2008,” the company said. Its resource-based manufacturing operating profit was significantly lower at RM169.1mil for the nine months of the current financial year compared with RM457.4mil in the same period last year.

“The lower profit is attributable mainly to realised foreign exchange losses and customer defaults on high priced contracts incurred during the first half of the financial year and lower sales volume due to the unfavourable global economic conditions,” the company said. The property segment’s operating profit of RM200.5mil for the nine months of the current financial year was 35% lower than in the same period last year. It added that the decrease was mainly due to the soft property market conditions and lower margins.

Overview - The principal activities of IOICORP consist of investment holding and the cultivation of oil palm and processing of palm oil. The principal activities of the subsidiaries are cultivation of oil palm, processing of palm oil, trading in commodities, property development, property investment and investment holding.

Oil palm plantation is one of IOICORP's core businesses as it contributes over 40% to the company's profit. IOICORP manages about 100,000 ha of oil palm plantation with approximately 65% of the plantation in Sabah and the rest in the peninsular.

The company also owns ten crude palm oil mills to produce crude palm oil and palm kennel. Through its 65% owned subsidiary, IOI Properties Berhad, IOICORP is involved in property development and investment, which is another major profit contributor to the company. The company has undertaken several mixed development township projects, which include Bandar Puchong Jaya and Bandar Puteri Puchong in the Klang Valley and Bandar Putra Senai in Johor Bahru. In addition, IOICORP owns 1.7mn sq ft of lettable retail and office space. Meanwhile, the company is also involved in the manufacture and trading of fatty acids, glycerine, soap noodles and metallic stearates through its 59% owned subsidiary Palmco Holdings Berhad.

Ratings Downgrade - Moody's Investors Service has changed IOI Corporation Bhd's outlook to negative from stable for its Baa1 issuer rating. At the same time, the outlook for the Baa1 senior unsecured bonds and loans issued by IOI Ventures (L) Bhd, which are guaranteed by IOI, have been revised to negative from stable. "The rating action has been driven by IOI's recently reported weaker profitability which is mainly the result of higher than expected foreign exchange losses and customer defaults amid declining crude palm oil prices," said a Moody's Vice President.

"These losses have prompted Moody's concerns over weakness in the company's internal management system especially in effectively controlling its foreign exchange exposure. In addition, the outlook for IOI's two major business lines --- resource based manufacturing and real estate development -- are expected to remain challenging over the next 12 months which may continue to pressure its profitability," he said.

IOI's current ratings are supported by the favourable long-term outlook for palm oil demand; position as a global top-tier palm oil producer and efficient operations; good access to capital and bank markets as well as the management's good track record in managing the palm oil business throughout the business cycle. IOI's strong liquidity is also supportive of its current rating.

Downgrade pressure on IOI could emerge if pressure on its downstream operation margin continues resulting in protracted weakness in profitability, such that earnings before interest, tax, depreciation and amortisation (EBITDA) margin remains below 19 percent; and weaker palm oil production from some of its aging plantations results in a material reduction in the profitability of its plantation segment, Moody's said.

The outlook could return to stable if IOI can demonstrate effective internal measures to minimize its foreign exchange risks and bad debt losses, as well as generate positive free cash flow to reduce its debt leverage such that its Debt/EBITDA is not exceeding 2.5-2.75 times. The last rating action with regard to IOI was taken on Dec 2, 2008, when the company's issuer and debt ratings were downgraded from A3 to Baa1.

Verdict: No big deal. The stock is still some 40% off its 12 month high. Its a good sign that they are whacking all the losses onto this quarter. This will get rid of all the bad news in one shot. Expect a good showing in the coming quarters. Operations wise the company has already sold forward 80% of its FY09 CPO production at an average price of RM2,700 (till June 2009). Now they are selling FY2010 production but the company seems to think that there is a good chance that they can get RM3,000 in 2H of 2009. Operating cost is still just RM1,100 and may actually average closer to RM1,000 for the rest of the year. This represents a good pick up level.

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Raw deal for IOI Prop’s minority shareholders

2009-02-06T08:38:00.001+08:00

Analysts believe they deserve better offer

PETALING JAYA: There is little doubt about IOI Corp Bhd’s Tan Sri Lee Shin Cheng’s ability to seize an opportunity when he sees it.

The plantation group’s executive chairman and CEO’s move to buy out its property arm may not surprise many, but some analysts feel IOI Properties Bhd’s minority shareholders deserve a better deal.

“We advise investors to sell the stock (IOI Prop) into strength,’’ CIMB Research said in a note to clients yesterday. The firm was “not keen” to swap IOI Prop’s shares for IOI Corp, but noted that the “alternative may be even less palatable.’’

IOI Corp late Wednesday offered to buy the remaining 199.7 million shares from IOI Prop minority shareholders at 0.6 share in IOI Corp at market price plus 33 sen cash per IOI Prop share.

This means that the offer price will fluctuate with IOI Corp’s share price movement. Shares in IOI Corp plunged 24 sen yesterday to RM3.68, while IOI Prop shot up 27 sen to RM2.49.

CIMB has a target price of RM3.20 for IOI Corp.

It opined that IOI Corp was “overvalued” at Wednesday’s closing price of RM3.92. It also argued that based on CIMB’s target price, the offer would equal RM1.92 worth of IOI Corp’s share plus 33 sen cash.

This works out to RM2.25 per IOI Prop share.

Maybank Investment Bank analyst Ong Chee Ting believed IOI Corp risked “low take-up rate” for its offer. Ong has a target price of RM2.90 for IOI Corp.

“Although it is unlikely to go down well with IOI Prop’s minority shareholders, the delisting would encouraged them to sell’’ as they won’t risk holding shares in an unlisted company, he said.

The deal breaker, however, are the government-linked funds Valuecap, Permodalan Nasional Bhd and the Employees Provident Fund, which collectively hold an estimated 10% stake in IOI Prop.

“If they act in concert and reject the offer, IOI Corp won’t be able to get the 90% acceptance,’’ said Tan Ting Min, an analyst at Credit Suisse Securities Malaysia wrote in a note yesterday.

He believed, however, that the market would see the privitisation as “marginally positive” for IOI Corp as it was value enhancing.

Credit Suisse upped its target price for IOI Corp from RM3.27 to RM3.31 yesterday.

IOI Corp needs to increase its stake in IOI Prop to above 90% to take the company private. Even if it failed to get the required number, IOI Corp said on Wednesday, it intended to take the requisite steps to delist IOI Prop from Bursa Malaysia.

“We believe the offer is fair, if not favourable, bearing in mind that IOI Prop may need to provide for impairment charges for its Sentosa Cove projects (in Singapore).’’ HwangDBS Vickers Research said in a report yesterday.

Based on Bloomberg’s consensus estimates, the IOI Corp offer was 36% below IOI Prop’s book value of RM3.63 and valued the company 8.9 times its forecast earnings for the year ending June 30, 2009.

Historical data showed that IOI Prop shares had been consistently traded above its book value since early 2000 until the middle of last year when equity prices worldwide collapsed.

“We lament the privatisation or delisting of IOI Prop as the company is one of the largest and most profitable developers in Malaysia and has been a benchmark and role model to many,’’ CIMB said.

The firm said IOI Prop’s revised net asset value stood at RM6.15 per share, or RM5.2bil. At yesterday’s close, its market value was RM2.07bil.

If the deal goes through, IOI Corp will fork out about RM64mil cash and issue some 116.9 million new shares at market price for the additional 24% stake in IOI Prop.

The deal, pending approvals from shareholders of both companies, is targeted for completion by end-June.

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Change In Profile But Not Values

2009-01-20T16:22:00.001+08:00

Lee Yoke Har's resemblance to older brother Datuk Lee Yeow Chor is uncanny. Soft-spoken and affable, her quiet strength and firmness are very similar to her sibling's when it comes to dealing with the issues of the day.

The children of IOI Corp Bhd's executive chairman and CEO Tan Sri Lee Shin Cheng, Yeow Chor is group executive director of the IOI group of companies and executive director of IOI Properties Bhd, while Yoke Har is the general manager of its legal and general operations department — a position that has enabled her to stay out of the public eye.

Two months ago, however, Yoke Har, who has been with the group for 13 years, donned another hat. She took over the marketing operations of the group's property division, which is a hot seat indeed, given the current tough property market conditions.

"I am not a corporate person," Yoke Har stresses to City & Country in what is her maiden media interview. "Please focus on the exciting projects and plans we have to share with you…

" She reports to IOI Properties' executive director Datuk David Tan, a trusted chieftain of the Lees and who has been with the group for ages. Then there are her brother and father.

With Yoke Har spearheading the marketing portfolio for the property division, Tan is free to focus on other equally demanding chores, with project management being a priority.

"He has a lot on his plate and he needs to juggle his time a lot," explains Yoke Har, whose newly put-together team oversees the marketing of key Klang Valley developments, comprising those in Puchong and Klang and IOI Resort in Putrajaya.

The changes being effected are aimed at coordinating and expediting decisions so that the developer can move at a fast clip. Raising the profile of IOI Properties — a brand that is synonymous with dependability and being conservative and low profile — is also in the works.

Says Yoke Har: "We want people to know us... It is high time there was coordinated effort to do this. Our style has always been to do things quietly; do it well and people will know. (But it has been) too quiet. This has been going on for years. But our values have not changed…"

For IOI Properties, indisputably a top Malaysian property developer that has been active since 1982, the changes are perhaps overdue, seeing how the demands of property investors have surged in recent times.

No, the changes are not a knee-jerk response to the troubles ailing even the most established players across the globe, says Yoke Har. In fact, she sees the property market bottoming out in nine months. "There is liquidity; people are holding back for fire sales but this has not happened." With the property market getting more crowded and the investment climate more jittery, even the unobtrusive IOI Properties is reviewing its strategies, going forward. This is necessary because the developer plans to launch some RM500 million worth of properties in the Klang Valley this year. The offerings will come from Bandar Puchong Jaya, the newer Bandar Puteri Puchong and Bandar Puteri Klang. In Bandar Puchong Jaya, which sprawls over 1,000 acres, more upmarket homes, like the 2½-storey superlink Vistaria Residences, have emerged in the residential component. The next six months will see the launch of sixty 2½-storey semi-detached homes and light industrial units here. Meanwhile, almost 80% of the 930-acre Bandar Puteri Puchong has been developed. It will unveil thirty-six 2 and 2½-storey bungalows and seventy-eight 3 and 4-storey shopoffices over the next half year. Over in Bandar Puteri Klang, new homes and shopoffices will be rolled out from end-February. In short, IOI Properties is not about to put a stop to new launches.

PUCHONG FINANCIAL COMMERCIAL CENTRE

So, exactly what is going to be different about the developer? For starters, it will embrace fresh and compelling development concepts and designs. Add to the concoction a loyalty programme designed to reach out to and please both buyers and occupants to secure repeat buying.

The new and bolder designs are evident in the upcoming Puchong Financial Commercial Centre (PFCC) taking shape diagonally across the Damansara-Puchong Highway (LDP) from the IOI Mall. Work on two of the five PFCC towers on an eight-acre freehold tract is slated to be completed this April. "These are not very high — 11 and 20 storeys. But you will not miss them as you drive along the LDP," says Mohd Ezuddin Sami'an, IOI Properties' marketing manager.

"They are iconic… they stand out from the other buildings in Puchong.

" Puchong has too many traditional shophouses and offices, says Yoke Har. She is confident a "happening" PFCC, with its contemporary design incorporating environmentally friendly features, will lift Puchong's image to even that of Bangsar.

Looks and design aside, the developer is counting on the proximity of Cyberjaya as drawing point. However, a building can only be audited as a Cyberjaya Centre upon its completion. "We are confident of getting the status," says Yoke Har, adding that the building designs have incorporated the necessary criteria.

While the original plan was to build all the five towers in four to five years, the timeline had to been tweaked to seven to eight years in the light of the current global credit turmoil. So, the developer is improving the designs of Towers 3, 4 and 5, based on the experience and feedback from the nearing completion of Towers 1 and 2.

Combined, the five towers will offer a net lettable area of 1.15 million sq ft. The 12-storey Tower 1 (built at RM35 million) will have 125,000 sq ft, and the 20-storey Tower 2 (built at RM70 million) 253,000 sq ft. In all, there will be 1,920 parking bays in the basement, all of them interlinked.

The developer has tagged an average RM600 psf for Tower 1, while it intends to keep the LDP-fronting Tower 2 for investment. Office space in Tower 2 is being leased out at an average of RM4 psf, while the retail space is going for RM6.50 psf or so.

It is worth noting that weak market sentiment notwithstanding, two local parties have shown interest in the buildings, with talks already in the second stage. One party is looking at leasing Tower 1 en bloc while the other is exploring a buy-and-lease-back option for Tower 2.

"We are flexible; we cannot be leaving the buildings empty for six to nine months, so if the price is good, we don't mind selling..." says Yoke Har, without disclosing the numbers now on the table. One of the parties is looking at relocating its operations, while the other is expanding and relocating its business.

IOI BOULEVARD

About a kilometre down the thoroughfare from PFCC, workers are putting the finishing touches to IOI Boulevard, a hybrid office-retail/lifestyle development modelled after London's Covent Garden. "Business sophistication" and "stylish entertainment" are some of the developer's taglines for this development that comprises six blocks of office-cum-retail space. Enclosed within is the Palette, which comprises thirty-six 2-storey retail outlets that look into a 108ft by 240ft courtyard. "This will be a platform to promote arts. Budding artists, musicians and photographers, for example, can showcase their work here free of charge. We will also build a stage in the courtyard, which will be shielded by a tinted, high glass ceiling," says Yoke Har, adding that they have factored into the design the need for air to circulate.

The developer has tied up with LimKokWing University, whose students will paint two murals in the Palette. IOI Properties is also working with the Puchong Orchestra to explore ways to promote the latter.

Of the six office-retail blocks, all equipped with individual lifts, the developer plans to keep two, both fronting the LDP for recurrent income. Since its launch last June, 60% or 262,000 sq ft of the total saleable area of just under 446,000 sq ft have been sold at an average of RM450 psf, with the ground floor retail space going for RM980 psf. Space at the Palette is leased at an average of RM6 psf. In all, IOI Boulevard offers a total net lettable area of about 730,000 sq ft, with another 133,000 sq ft in retail space at the Palette.

IOI Boulevard is targeted for completion in April and is likely to be opened in May. It will be interesting to see how much IOI Properties can do to bring arts to live in Puchong.

SIERRA PUTERI

Outside the Puchong boundary closer to Sepang, earthworks for a 485-acre mixed development township with a gross development value of RM1.6 billion called Sierra Puteri, have been completed. Construction will start as soon as the authorities approve the building plans. The gated development on undulating grounds will boast designs in departure from IOI Properties' norm. However, the layout will still be functional, says Yoke Har.

The lower-density units will be designed after precincts, each of which with its own park. There will be lots of buffer parks, she continues. The maiden launch, featuring the traditional 2-storey 2ft by 75 ft terraced homes, has been slated for the second quarter this year at a pricing she declines to reveal immediately.She would however only say that it will be priced at a premium to the conventional link homes in the close by Equine Park.

IOI Properties' move to go slightly up markat at Sierra Puteri makes sense given the abundant traditional offerings coming up in Equine Park. IOI Properties' target market: Puchong and Kajang upgraders and those staying in Serdang of course.

IOI FAMILY

Fostering loyalty in customers is an integral part of marketing and it is no different for developers. Come late March or April, IOI Properties will unveil its loyalty programme, which will see some 85,000 IOI Privilege Cards distributed, in the developer's two townships of Bandar Puchong Jaya and Bandar Puteri Puchong.

The cards will be given out free to those in the catchment area to shop, dine and enjoy other services for less in participating shops in Puchong, where the developer has built some 1,700 commercial units.

The developer will also take on the role of promoting the participating outlets, which are expected to offer 10% to 15% discounts or privileges in kind for a year. So far, 60 outlets have signed up. Potential candidates are tenants in IOI Mall — 199 in the old wing and another 100 in the new extension, which at press time was awaiting its certificate of fitness. The extension expands IOI Mall's 650,000 sq ft of net lettable space to about a million sq ft.

Yoke Har is particularly excited about the loyalty programme and it is easy to see why. A thriving township can only equal an appreciation in capital values and yields. And happy investors could potentially translate to repeat buyers. So clearly, IOI Properties is the ultimate beneficiary of the programme, if it works.

The community-based programme, Yoke Har points out, is an extension of the developer's community services which it undertakes seriously and with commitment. "We have been working a lot behind the scenes. Do you know we have someone dedicated to working with the residents' associations in Puchong? Besides our website, we also publish a bi-monthly residents' newsletter called Reach Out…"

"We want to make residents feel privileged. At the same time, we are supporting the business operators in our townships as part of our after-sales service. The programme makes sense — these are self-contained townships; everything one needs one can find there. The convenience, the variety, now the pricing with the discounts offered," she adds.

Yoke Har does not discount the possibility of the IOI Privilege Card being used by third parties, which augurs well for the participating businesses. Obviously, the plan to extend the coverage of the loyalty programme is on the cards.

IN THE PIPELINE

Traditionally a township developer, IOI Properties has withstood the test of time and thrived on the legacy of its developments. Recurrent income from property investments and property management fees now help make up the property division's 30% or so contribution to IOI Group's earnings. The ratio, Yoke Har says, is going to change with more emphasis on property, but she is unable to immediately provide the numbers.

IOI Properties is also active outside the Klang Valley, for example Singapore, although plans there have been deferred given the current downturn.

Another project to look out for is a mall planned for Putrajaya, the details of which the developer declines to divulge for now. All said, IOI Properties is geared to give competitors a run for their money.

Source: The Edge Daily

Planters urge government to help stabilise palm oil prices

2008-12-25T20:33:00.000+08:00

KUALA LUMPUR, Nov 25 - Malaysia's top plantation companies have suggested government incentives for industries to switch to palm bio-diesel as well as burning the oil as feedstock to generate power as part of initiatives to stabilise prices.

The proposals come in the face of excessive crude palm oil (CPO) supplies at a time of slowing demand and prices a third of their peaks.

Giving their full support for the government's initiatives to allocate RM200 million to replant 200,000 ha of ageing trees, the planters said factories and even fishermen - currently on diesel subsidies - could shift to CPO use with the right incentives.

"The more oil we can consume in the country, the greater the chances of stabilising the price of palm oil," said Kuala Lumpur Kepong chief Lee Oi Hian.

KL Kepong, along with IOI Corporation, Sime Darby, United Plantations, Felda Holdings and Boustead Holdings, produce about 60 per cent of Malaysia's total CPO.

Following a meeting of the players yesterday, the company heads told a media conference that despite the "very challenging period", they were still profitable at current CPO prices of around RM1,500 per tonne and
not in a 'distress situation'.

"We are still making profit although we may not like those profit figures," quipped Lee.

IOI executive chairman Lee Shin Cheng said he expected prices to recover and to average RM2,000 to RM2,400 next year.

Even so, with about two million tonnes of stock and prices close to breakeven point for the less productive planters, the companies with the backing of the Malaysian Palm Oil Board are looking to a RM500 million
price stabilisation fund to maintain prices.

One of the world's largest palm oil producers, Malaysia's annual output should hit an estimated 17.5 million tonnes, but global demand has shrunk in the economic downturn despite the vegetable oil's huge discount of up to US$250 per tonne to soya oil.

"The industry is asking if we can put part of the money available to support the price," Lee said of the RM300 million that remains of the fund, given that RM200 million would go towards replanting efforts.

Whether the government agrees to the suggestions, which have yet to be formally presented, remains to be seen - but national utility Tenaga Nasional has pointed out it is not feasible to use CPO as feedstock given
it would cost more than coal.

In February, the government plans to implement the use of blended bio-diesel fuel in government vehicles, and analysts estimate the production of the B5 biofuel with 5 per cent palm oil would remove 500,000 tonnes of palm oil annually when fully implemented in early 2010.

The planters who want fertiliser costs reduced by half said they would adjust costs by reducing the amount of fertiliser used. Fertiliser accounts for half the production costs but it has increased two-fold since the beginning of the year. - Business Times Singapore

Of oil palm, douches, insects and Tamil songs

2008-12-24T05:59:00.001+08:00

YOU can always tell a planter's hands. They are big, calloused, wrinkled and very, very strong.

When I first shook hands with Datuk Leslie Davidson, a 77-year-old former planter, I was left with numb fingers before blood flowed into my right hand.

In an interview with Davidson and Mahbob Abdullah, his friend and former subordinate, both talked about their upcoming books.

Scheduled to be launched in early 2009, the books tell of their amusing and poignant experiences as planters in the tropics between the 1950s and the 1980s.

Davidson was also in Kuala Lumpur to receive the Merdeka Award from Prime Minister Datuk Seri Abdullah Ahmad Badawi for his outstanding contribution to Malaysian people.
The Merdeka Award, a Petronas initiative co-founded with ExxonMobil and Shell, came with a trophy, certificate and RM500,000 cash.

Davidson's contribution could be attributed to efforts 30 years ago when he initiated efforts to get weevils, insects from Cameroon, to pollinate oil palm trees in Malaysia. Since then, the oil palm trees have been merrily producing more fruit bunches, making Malaysia the world's biggest palm oil exporter.

As Davidson sat himself down beside Mahbob, he said, "the Merdeka Award is actually a team effort".

I stole a glance at Mahbob. "My boss is right. Maybe the award money should be divided among team members, too," he said, and laughed, "there were thousands of us".

In chapter 10 of Mahbob's book titled "Planters Tales" and chapter 37 of Davidson's "East of Kinabalu", they tell how oil palm companies had to spend a lot of money to hire hundreds of workers just to manually harvest pollens from male flowers of oil palm trees to pollinate female flowers.

Teams of workers patrolled the estate daily searching for male flowers to collect the pollens. This was then issued to other teams who went around pollinating every receptive female flowers with hand puffers.

"Ironically, by trial and error, we found the ideal instrument for this delicate operation to be vaginal douches," he said.

When Davidson submitted orders for vaginal douches, Unilever headquarters in London was very surprised and immediately questioned if he was carrying out birth control programmes among his estate workers.

Davidson promptly replied, "Oh, quite the contrary, we're actually trying to increase fertility rates among the trees to get them bear more fruits".

While top management approved of the orders, Davidson was constantly reminded that Sabah estates' oil palm yields were lower than in Johor and Cameroon.

Undeterred and unconvinced by textbook knowledge which claimed that palm fruits were wind-pollinated and that heavy rain washes pollen away, Davidson arranged for more research to prove that pollination in West Africa was largely due to weevils which were not found in Malaysia.

Under Davidson's instruction, Dr Kang Siew Ming, Zam Karim, Dr Tay Eong Beok and Mahbob went to Cameroon to assess the work of Dr Rahman Anwar Syed, the entomologist who was assigned to study oil palm pollination by insects in Africa, especially the Elaieidobius kamerunicus specie.

"It ended up with the two ladies Dr Kang and Zam climbing the oil palm trees," Mahbob said.

Asked what he and and Dr Tay did while the ladies were up on the trees, Mahbob replied, "we stood underneath and made sure that they didn't fall down".

Jokes aside, Mahbob is most probably remembered among members of East Malaysia Planters Association for being the very persuasive money collector for the RM2 million weevils project.

The Unilever Group was the first to pay but Sabah Land Development Board was the biggest contributor.

Incidentally, the estates that Davidson and Mahbob used to work and live in Johor and Sabah are now owned by IOI Corp Bhd. To this day, the almost 70-year-old IOI Group executive chairman Tan Sri Lee Shin Cheng still makes his regular rounds at these estates.

Lee's talent in serenading Tamil songs to his oil palm trees may seem surprising to many but it reflected Incorporated Society of Planters (ISP) requirement that all planters must be proficient in commonly-used languages at the estates.

Davidson recalled preparing for the Malay and Hakka language tests almost 60 years ago. At that time, the ISP examiner said, "You will find Hakka very useful in North Borneo," and asked, "Nyi thuk-ko-kai shu, han ki-tet mau? (Do you still remember your studies?)"

Davidson replied, "Yit pan ki-tet, yit pan mong-ki liau. (Half remember, half forgotten.)

The examiner liked what he heard and Davidson passed the Hakka test with flying colours.

Mahbob was also lucky. In his second book entitled "Planter Upriver", Mahbob told how he was slow to start learning Tamil but eventually aced the test.

At that time, Mahbob's contract as an assistant manager at Tanah Merah Estate in Tangkak, Johor, required him to pass the Tamil language test. He found a very patient tutor in Krishnan, an 18-year-old son of a worker. Also, Mahbob's love for Tamil and Hindi movies might have helped.

Asked if he is able to sing Tamil songs, he winked and smiled, "If Tan Sri Lee invites me to his estates, I certainly don't mind a duet".

Source here

Property groups find asset sales tough going

2008-12-03T08:37:00.001+08:00

A SERIES of aborted divestments by Singapore property groups lately highlights the challenges of relying on asset sales in the current environment.

Last weekend’s edition of BT featured two stories on the same page, on Singapore’s two biggest listed property groups - CapitaLand and City Developments Ltd (CDL). Both are in the same boat, with their respective planned divestments of overseas assets not completed.

CDL’s London-listed hotel subsidiary Millennium & Copthorne Hotels announced that the agreement for the disposal of Millennium Seoul Hilton hotel to Korean group Kangho AMC Co had been terminated as the buyer was unable to finalise its financing arrangements amid the global financial turmoil.

CapitaLand’s 30 per cent-owned associate Inverfin Sdn Bhd, which owns Menara Citibank tower in KL, reported that the sale-and-purchase agreement for the sale of the office tower had been terminated as the buyer, IOI Corporation Bhd, did not pay the balance purchase price on the completion date.

There have also been instances of transactions of Singapore buildings not being completed. Ho Bee announced last month that its proposed $30 million sale of Frontech Centre, an industrial building in Bukit Merah, had fallen through. The buyer is understood to have been US fund group Angelo Gordon. BT also reported last month that Australian property fund manager Blaxland did not go ahead with completing its planned acquisitions of eSys Technologies’ building in Changi North and SH Cogent Logistics’ warehouse building in Penjuru Close in Jurong.

The pullouts reflect the difficult conditions for property investment sales, caused by several factors. Firstly, funding is tight. But even potential buyers with financial muscle may get cold feet or decide it simply makes more sense to walk away from their purchase now and forfeit the deposit, as sliding property values will present more attractive investment propositions in due time. There may also be other issues at play, such as exchange rate fluctuations. For instance, from a potential buyer’s perspective, the Aussie dollar’s 21 per cent depreciation against the Singapore dollar in the past three months would make purchasing Singapore properties less attractive.

Putting things in perspective, a seasoned property consultant said: ‘The current climate makes asset sales difficult, whether you’re selling an apartment or a shopping centre.’

Property groups will have difficulty selling assets even to their sponsored real estate investment trusts (Reits). With the stockmarket slide, Reits are trading at very high yields, which makes it difficult for them to make yield-accretive acquisitions. And the current tight funding environment affects Reits as well; their priority these days is refinancing existing debt instead of sourcing new debt for further acquisitions.

The situation is likely to continue for at least the new few quarters; that will have implications for Singapore’s property groups. Heavyweight CapitaLand has booked handsome profits from divesting assets in the past few years. In the past two years, the group has divested some $9 billion of assets - an exercise that has generated well over $1 billion in profits.

The group still has other assets that it could potentially divest, such as its industrial property portfolio here and even some of the office blocks held by its sponsored Reit CapitaCommercial Trust.

Prior to the global financial crash, CapitaLand would have had a high chance of success if it had continued on its path of asset disposals. Now, buyers are scarce and even those that are around would demand distressed sale prices (as cushion against further declines in property values after their purchase).

The trying financial climate will affect asset divestment strategies of even a heavyweight like CapitaLand. But at least it has stronger financial muscle to weather this storm even if it can’t make major divestments in the near future.

Smaller players are not in the same boat. Some companies burdened with heavy debt and which had been hoping to unload some of their properties to improve their balance sheets will be caught if they can’t sell their assets.

Hopefully, the malaise in the property investment sales market will not drag on too long.

Source : Business Times - 2 Dec 2008

IOI aborts Menara Citibank purchase

2008-12-03T08:36:00.002+08:00

by Khalil Adis

IOI Corporation Berhad´s has aborted its proposed RM586.7 million acquisition of Menara Citibank, causing it to forfeit an earlier payment of RM73.4 million, the company has revealed in a statement.

The company cited the worsening global financial crisis as the reason why it has decided to call off the acquisition.

“Due to the recent sudden adverse developments in the global economic environment which have spread to this region and impacted negatively on business sentiments, the company has, after due and careful deliberations, decided that it would be in the overall best interests of the company and its shareholders not to proceed with the proposed acquisition,” IOI Corporation said in a statement.

IOI Corporation made agreements with the various vendors last August comprising Citigroup unit, Menara Citi Holding Company Sdn Bhd (50 percent), CapitaLand (30 percent) and Amsteel Sdn Bhd (20 percent).

It became unconditional on 31 October and the due date for payment of the balance of the purchase price was 11 November.

IOI Corporation then received a letter from the vendors´ solicitors dated 26 November, stating they were terminating the agreement with immediate effect. The sum of RM73.4 million paid earlier, together with accrued interest, was forfeited as liquidated images.

IOI Corporation said it is currently seeking seeking legal advice as to the propriety and quantum of the aforesaid forfeiture.

Plantation firms to buy more land

2008-12-03T08:36:00.001+08:00

CPO price downtrend provides opening for expansion

PETALING JAYA: Cash-rich local plantation companies will actively expand their land bank within the next five years via acquisitions of green fields, existing oil palm plantations and distressed planters.

Analysts believe the current downtrend in the crude palm oil (CPO) prices would provide local planters the advantage in sourcing for more attractively priced plantation land in favourite locations like Sabah, Sarawak and Indonesia.

The commodity boom over the past five years saw many tier-one and tier-two local planters accumulating healthy cash in the range of RM450mil to over RM1.4bil.

Of late, plantation giants like IOI Corp Bhd, Sime Darby Bhd and Kuala Lumpur Kepong Bhd, which each has a cash pile of over RM1bil, have indicated strong intentions to progressively expand plantation hectarage.

Major planters like Kulim (M) Bhd, Hap Seng Plantations Bhd, IJM Plantations Bhd, Asiatic Development Bhd and Ta Ann Holdings Bhd are also in the midst of acquiring more land bank.

Jupiter Securities head of research Pong Teng Siew told StarBiz that plantation companies had not been actively paying out the best dividends, particularly last year.

“Many seem to be hoarding their cash to embark on new land bank acquisitions.”

Production gain is slow in production.

Said Pong: “Planters need to grow by acquiring more land bank and progressively undertake replanting activities with high yielding clones.”

He concurred that land bank acquisition was the major strategy of local oil palm planters.

In Sabah, plantation land can fetch up to RM15,000 to RM16,000 per acre currently compared with only RM5,000 per acre in the late 1990s.

Sarawak plantation land is even higher at RM18,000 to RM20,000 per acre.

As for Indonesia, the land price is about half Sabah’s prices.

Pong said the major obstacle faced by most Malaysian plantation companies in the republic was mainly the land ownership issue despite the availability of huge tracks of plantation land.

IOI Corp group executive chairman Tan Sri Lee Shin Cheng recently said the group was keen to acquire more land in Malaysia rather than Indonesia.

“Given the current market uncertainties, we prefer to increase our land bank in Malaysia but in Indonesia, we will continue with new planting efforts,” he added.

His view was shared by Hap Seng Plantations group managing director Edward Lee Ming Foo.

Lee was quoted recently as saying that Hap Seng Plantations was looking at expanding its acreage in Sabah, where most of its plantations are located.

Planters that are still gung-ho over Indonesia’s prospects include IJM Plantations and Sime Darby.

Sime Darby group chief executive Datuk Seri Ahmad Zubir Murshid said recently the group was eyeing green field plantations in Indonesia. It will also consider buying distressed plantation companies.

Memories My first replanting

2008-06-20T08:40:00.000+08:00

We had an area of very old rubber.The area had been abandoned from tapping very much earlier.The stand was old rubber seedlings,many very huge trees and I estimated the stand per acre was slightly more than a hundred.

The inter-rows was in horrible state,full of wild grown wild rubber seedlings.The sized of these seedlings were beyond imaginations.Apparently the inter-rows were neglected long ago.For tapping they just cleared the tappers' path,that was all.

In 1971 we decided to replant it,So we called out for a reliable contractor.At that time rubber wood was in no demand.Many came the Boss himself selected one contractor and began cutting the trees in November 1971.

Unfortunately this contractors absconded after cutting down all the trees
for he feared he could not finish the contract on time.Lucky we did not over paid him.

We have difficulties finding a replacement so we decided to finish the job ourselves.So I took over.Initially I recruited another contractor to supply some chainsaw men to continue cutting the fallen trees into movable lengths.

Following I got some extra temporary workers recruited from nearby kampongs.We were fortunate because the estate was next to a Malay kampong.Most Javanese workers with one of them as headman.

So with them we roughly stacked the fallen wood onto the trunk.When the wood were drier we set fire to them just before we go home.Every day it was l like that.And I was with them from morning till evening.

As routine we re-stacked all the unburnt wood onto the huge trunk etc.and reburnt them,until all completely burnt off.By burning all the rubber wood like this we unnoticiably also destroyed all the wild rubber seedlings.

It took us nearly three months to completely cleared the field of 130 acs.,three months of hot sun and I was as dark as an all the Javanese workers.There was no doubt that the costs were high but we cannot help as we could not get another contractor to finish the job.

After this we plotted out the roads and also did lining for the replanting to Oil Palms.The roads were laid with laterites from our own hill.

We began planting in September 1972,with on set of the rainy seasons.Before we started planting we had a visitor,my Boss's friend,he came to see how we were planting.

I waited for him at the office and he came in his car.Thereafter I droved him to the replanting field.This guy on reaching the field rushed at the first palm planted by a worker earlier and began kicking it with his leather shoes.""See,no firm planting".

I was surprised at his action and said if I did not wait for him this would not have happened.I told him off because he was only a visitor.Anyway I told him if he wants my job he can have it.He kept quiet.

Later I learned that he was a Petrol Pump Owner (Mobil) in old Kelang Road.He was a pineapple planter.He later after this became Manager of Bidor Bahru Estate.To day he is a giant in the planting world.Like to know who? He is the shorty Lee Shin Cheng.Believe it or not.

We did an excellent job with our replanting and we completed it on time.The Boss was very pleased with it.

As for Mr.Lee I was told is still kicking lallang in his group of Estates.

Source here

Council To Spearhead ECER Development, Says PM

2008-06-16T08:34:00.002+08:00

KUALA TERENGGANU, June 14 (Bernama) -- The East Coast Economic Region (ECER) Development Council will spearhead implementation of the ECER master plan and play the main role in determining the direction, policy and strategy for its development.

Prime Minister Datuk Seri Abdullah Ahmad Badawi, in stating this Saturday, said the council, set up under an Act of Parliament, would also generate and promote economic and social developments as well as private sector investments in the region.

"The setting up of the council, as an authority, is important to ensure that the ECER master plan is implemented in an efficient and orderly manner," he said at the launch of the council here Saturday.

"With this, the policies, planning and implementation by all parties can be streamlined in an organised and comprehensive way for the welfare of the local people," he added.

Abdullah said besides promoting economic activities in the ECER, the council would also study the impact of development programmes to ensure that socio-economic development was being carried out in tandem.

He also said that to ensure the success of the ECER, he has appointed members from the highest level for the council with himself taking on the responsibility of chairman.

Other members included Deputy Prime Minister Datuk Seri Najib Tun Razak, Terengganu Menteri Besar Datuk Ahmad Said, Pahang Menteri Besar Datuk Seri Adnan Yaakob, Johor Menteri Besar Datuk Abdul Ghani Othman and Kelantan Menteri Besar Datuk Nik Abdul Aziz Nik Mat, he said.

Abdullah said to strengthen the council, he has appointed Second Finance Minister Tan Sri Nor Mohamed Yakcop and Minister in the Prime Minister's Department Tan Sri Amirsham A. Aziz as representatives of the federal government.

Chief Secretary to the Government Tan Sri Mohd Sidek Hassan has also ben appointed to represent the civil service, he said.

The Prime Minister named Petronas' president and chief executive officer Tan Sri Mohd Hassan Marican and IOI Corp's executive chairman Tan Sri Lee Shin Cheng as representatives of the private sector.

Abdullah said at the management and operations level, the council will be led by Datuk Jebasingam Issace John as the chief executive officer.

"He was involved in drawing up the ECER master plan and is supported by a team which is capable of carrying out the council's functions effectively," he said.

Abdullah said the council has a heavy responsibility to ensure that the ECER objectives are achieved."

As the chairman, I will ensure that the council acts efficiently, effectively and impartially," he said.

On progress of the ECER so far, Abdullah said he was satisfied with the ECER secretariat for its efforts in developing several projects and programmes.Among them is the setting of Centres of Excellence at five universities in the region, namely Universiti Malaysia Terengganu, Universiti Darul Iman, Universiti Malaysia Pahang, Universiti Teknologi Mara and Universiti Malaysia Kelantan.

According to him, such centres are in line with the ECER objectives to encourage research and development, which can lead to related commercial industries coming up in the region.On the agriculture sector, Abdullah said several initiatives had started to be implemented.

Among them is the development of three agro valleys in Bachok-Setiu-Kuala Berang, Pekan-Rompin-Mersing and Kuantan-Maran areas, a herbal and biotech park in Gua Musang, Kelantan, and a fruit park in Lanchang, Pahang.

He said for the petrochemical sector, development of the Kertih Plastic Park had started and results were shown with an initial investment of RM50 million for factory and infrastructure.Abdullah said the government would continue to support the ECER by providing the optimum infrastructure.

He said the mid-term review of the Ninth Malaysia Plan would look into the allocations for the infrastructure development of the ECER as well as the other economic regions.-- BERNAMA

Source here

IOI Properties confident Sentosa Cove condos can sell

2008-06-11T05:28:00.001+08:00

UALA LUMPUR: IOI Properties Bhd is confident that its biggest high-end development in Singapore’s Sentosa Cove will be a success despite soaring crude oil prices and a softening property market in the republic.

Executive director Datuk Lee Yeow Chor said the group had foreseen the market softening and construction costs rising when subsidiary IOI Properties (S) Pte Ltd and joint-venture partner Ho Bee Investment Ltd successfully tendered for a 5.3-acre 99-year leasehold land called Pinnacle Collection in Sentosa Cove in January for S$1.09bil (RM2.5bil).

The price is about 13.9% more than the reserved price of S$963mil.

“When we tendered for the land last December, the residential market in Singapore was consolidating. It’s good to have a correction as the market went up too fast, by 31%, last year,” Lee told StarBiz after shareholders approved the deal at an EGM yesterday.

Lee said what was more important was the land’s potential as it was the last piece of condominium land parcel in Sentosa Cove.

He said Sentosa Cove had three major attributes – a famous name; a seafront property that would attract many international high-net worth investors; and its location near the integrated resort-cum-casino development where the Genting group would be investing S$5.3bil.

“We believe the integrated resort will give Sentosa Cove a big boost when it (resort) is completed end-2009. We have timed our development (Pinnacle Collection) with the completion of the resort so that people can see the full potential of the place,” he added.

Lee said the group planned to build condominiums, priced about S$3,000 per sq ft.

Pinnacle Collection, to be launched next year, will have seven 18-storey blocks and a 20-storey luxurious condominium. It will have 280 apartments and penthouses of various layout and sizes.

“The average size (per unit) would be 2,500-3,200 sq ft. There will be private lift lobbies. It will cater to the international market,” Lee said, adding that besides Singapore, it would target investors from Indonesia, China, the Middle East and India.

It will have a total development cost of S$1.6bil and estimated gross development profits (before interest costs) of S$500mil.

To be completed in early 2012, it will be funded from sales proceeds, borrowings by joint-venture company Pinnacle (Sentosa) Ltd (IOI Properties and Ho Bee will have 65:35 ownership) and advances from shareholders. Sales will commence in mid-2009.

The Pinnacle Collection is one of two condominium parcels that flank the entrance of the marina leading to Sentosa Cove.

It is adjacent to the 3.6-acre leasehold Seaview Collection, which was successfully tendered by another IOI Properties subsidiary with Ho Bee in March 2007. Seaview Collection, a luxury condominium project comprising two eight-storey apartment blocks with 151 units, will be launched in the third quarter.

Source here

10-06-2008: IOI to delay project launches in Singapore

2008-06-10T17:22:00.000+08:00

PUTRAJAYA: IOI Properties Bhd will wait for the next cycle to launch its property development projects in Singapore in view of the less-than-robust economic market, said its executive chairman Tan Sri Lee Shin Cheng.

However, he said construction work on the two projects — Seaview Collection and the Pinnacle Collection in Sentosa Cove — would go ahead as planned.

Speaking to reporters after the company’s EGM here yesterday, Lee said the time was not right to launch both the projects and “the next cycle will be higher than the previous cycle”.

IOI Property, through a joint venture with Ho Bee Investment Ltd, is developing the Pinnacle Collection, which comprises seven 18-storey blocks and one 20-storey block of luxurious condominiums, while Seaview is a luxury condominium development comprising two eight-storey apartment blocks.

The group has a total of 4,500 acres (1,821 hectares) of landbank in the Klang Valley and Johor. It also plans to develop 543 acres of land in Putrajaya into high-end bungalow lots and condominiums which would be launched next year.

On the issue of windfall tax which will affect IOI Corporation Bhd’s plantations division, Lee said the group was disagreeable to the tax as the industry was already paying cess to the Malaysian Palm Oil Board, in addition to levies imposed in Sabah and Sarawak, apart from their subsidising of cooking oil.

“There is no country in the world where planters are subsidising manufacturers,” he added.

Last week, the government had announced the removal of the cooking oil stabilising scheme as part of the subsidy restructuring scheme and replaced with windfall tax.

According to Lee, IOI was also finalising a US$100 million (RM325 million) investment as part of its expansion plan in Rotterdam, Holland. IOI already owns a palm oil refinery of 85,000-tonne capacity and would build a 300,000-tonne capacity plant to process margarine.

On its previous proposal to buy six plantation companies in Sarawak which would have cost RM439.9 million, IOI’s group executive director Datuk Lee Yeow Chor said the deal had fallen through due to technical issues.

“It is not about the price but title. Some pre-conditions cannot be satisfied,” he said, adding that it would be difficult to say if IOI would pursue the purchase of these plantations later. The six companies have a combined plantation landholding of 44,350ha, of which 30.4% or 13,500ha were planted with oil palm.

Source here

Projects in Singapore set to further boost group image

2008-06-05T08:53:00.000+08:00

VENTURING into Singapore's luxury residential property market is set to enhance IOI Properties Bhd's brand and reputation as a quality home developer in Malaysia and Singapore.

IOI Properties executive director Datuk Lee Yeow Chor is excited about the company's two projects in Sentosa Cove that would pave the way for more ventures across the causeway over the next two years.

The two projects will be undertaken with its Singapore joint-venture partner, Ho Bee Investment Ltd, which is involved in four other projects in Sentosa Cove.

The Seaview Collection condo in Sentosa Cove will comprise two eight-storey blocks of 125 residences.

“We are confident that the projects will do well as there are no more land for condominium projects in Sentosa Cove.

“The 5.3-acre land parcel that we successfully tendered for in January is the final piece of condominium land to be launched by Sentosa Cove Pte Ltd,” Lee said.

He added that the acquisition of the land has just been concluded and it would be the site for its second project, The Pinnacle Collection, which is one of the two condominium parcels that flank the entrance of the marina leading into Sentosa Cove.

Lee said the scheduled completion of the Genting group's integrated resort development on Sentosa Island next year would spawn a greater demand for more quality homes in Sentosa Cove.

“Sentosa Cove, a world-renowned exclusive residential development, is now about 50% completed while another 20% of the projects are now ongoing. It has attracted many high net worth buyers from around the world,” Lee said.

The Pinnacle Collection, comprising a 20-storey block of 250 luxury condominium units, will be launched by the end of next year.

The Pinnacle residences will have an average built-up of 2,000 sq ft. The building designs for the project are still being finalised.

Meanwhile, the company's first project in Sentosa Cove, the Seaview Collection, will comprise two eight-storey blocks of 125 residences on 3.6 acres.

Construction will start in the third quarter of this year and the project will be launched for sale by the end of the year.

Analysts look at IOI Properties' venture into Singapore positively.

A recent CIMB Research note said that as the company's profits were the largest compared with other Malaysian developers, IOI Properties had no choice but to seek new avenues for growth to see a significant impact on its bottom line.

“We view positively its choice of joint-venture partner as Ho Bee has carved a niche in high-end residential development projects on Sentosa Island.

“IOI Properties is one of the few Malaysian developers with the balance sheet to take on Singapore-scale projects,” it said.

CIMB Research said although the Singapore property market was highly competitive, “values are significantly higher than in Malaysia”.

“Assuming an average selling price of S$3,000 per sq ft, the sales value of the Seaview Collection condominiums alone is a mind-boggling RM2.4bil, which is equivalent to a medium-sized township that would easily take 10 to 15 years to complete.

“The break-even cost for the condominiums is estimated at S$1,900 per sq ft,” it said.

The margins for the Pinnacle project should also be good as the break-even cost is around S$2,400 per sq ft while the targeted selling price should be closer to S$3,500 per sq ft, the research house added.

Source here

Oil palm companies to pay windfall tax from July 1

2008-06-05T08:42:00.000+08:00

PETALING JAYA: The Government will impose windfall tax on oil palm companies starting July 1.

An analyst said under the Windfall Profit Levy Act 1998, a windfall levy would be imposed on crude palm oil (CPO) and crude palm kernel oil (CPKO) when the prices are in excess of the threshold of RM2,000 per tonne.

Under the proposed windfall tax framework, palm oil producers in peninsular Malaysia would be charged tax amounting to 15%, and 7.5% for Sabah and Sarawak.

At the same time, the Government is also abolishing the existing cooking oil cess from July 1.

However, the price of cooking oil will remain the same as it will now be subsidised by the windfall taxes.

The Government said plantation companies in Sabah and Sarawak were charged a lower windfall tax as they were already paying sales tax to their respective state governments.

OSK Research plantation analyst Alvin Tai said: ”The lower windfall tax is expected to be a positive move for plantation companies in Sabah and Sarawak. However, we expect the tax will have a slightly negative impact for companies in peninsular Malaysia.”

“The net impact of this move will be neutral but we remain overweight on this sector,” Tai said, adding that most plantation companies had exposure in the peninsula, Sabah and Sarawak.

A local plantation analyst said the imposition of the windfall tax would have minimal impact on the plantation industry.

“I don’t see it derailing profits, moving forward. Net impact on earnings would be minimal, given that the cess has been abolished at the same time.

“It (impact) also depends on the company. Big firms like IOI Corp Bhd which have diversified operations would be least affected while pure planters like IJM Plantations Bhd and Asiatic Development Bhd would be more affected,” the analyst said.

Under the new tax plan, companies in Sabah and Sarawak are expected to pay RM112.50 per tonne of CPO whereas their peninsular Malaysia counterparts would pay about RM225 for a tonne of CPO.

At the same time, all plantation companies would “save” about RM200 per tonne (at the current CPO price of about RM3,500 a tonne) with the abolishment of the cess tax.

This means companies in peninsular Malaysia would still have to fork out RM25 per tonne of CPO while those in Sabah and Sarawak would enjoy savings of RM87.50 per tonne.

Most companies contacted by StarBiz declined comment on the taxes, saying they needed time to study the tax framework before issuing any statements.

Source here

Lee’s son appointed IOI Corp ED

2008-06-04T16:49:00.001+08:00

KUALA LUMPUR: Lee Yeow Seng, son of Tan Sri Lee Shin Cheng, was appointed executive director of IOI Corporation Bhd yesterday.

Yeow Seng joined IOI group in 2002 as special assistant to Lee. Prior to that, he was with the London and Singapore offices of a leading international financial services group. He is involved in corporate affairs and general management within the IOI group.

He has a direct interest of 1.14 million shares and indirect 2.4 million shares in IOI Corp, and indirect 233.54 million shares in IOI Properties Bhd.

Source here

Yeo’s departure seen having minor impact

2008-06-02T15:17:00.000+08:00

PETALING JAYA: IOI Corp Bhd expects minimal disruption to its group operations following the resignation of group executive director Datuk Yeo How, which will take effect end-July.

A company spokesman said Yeo, had been instrumental in ensuring there was a strong management team and good corporate culture.

“Besides, group executive director Datuk Lee Yeow Chor, who oversees the group's operations, is also familiar with the areas covered by Yeo.

“Hence there should be minimal impact on group operations as his impending resignation had already been discussed awhile back,” she told StarBiz yesterday.

On Tuesday, IOI Corp announced Yeo would be leaving the group to pursue a new career. It was learnt Yeo could have accepted a job offer by a Singapore-based plantation group.

Credit Suisse Research said in a note to clients yesterday IOI Corp's valuation premium was affected on concerns over Yeo's departure.

It said the “delicate balance” between executive chairman Tan Sri Lee Shin Cheng's entrepreneurship and Yeo's good capital management and corporate governance would be affected. It downgraded IOI Corp to underperform from outperform and cut its target price to RM7 from RM10.

However, the IOI Corp spokesman described Credit Suisse Research's comment and inference as unfair to the company and Yeo for his efforts in putting systems in place over the years.

Other analysts said although there might be a momentary spike in the IOI's share price, it was unlikely to be permanently impacted by this news.

RHB Research Institute said any knee-jerk reaction in IOI Corp's share price should be temporary, given that there was no change in substantial share ownership and Tan Sri Lee was still the main driver of the business.

“Yeo's personal shareholding in IOI Corp is only 0.01% and less than 0.01% for IOI Properties Bhd, so we don’t expect any potential major selldown of Esos (employee share option scheme) shares,” it said in a report.

RHB Research said Tan Sri Lee would already have someone in mind to replace Yeo and a likely candidate would be Yeow Chor, his eldest sonwho has been on the board since 1996. It maintains its outperform call with a fair value of RM9.35 per share.

IOI Corp closed 10 sen down at RM7.10. It was the most active counter with 13.52 million shares done.

Source here

Lending a Bullish Hand

2008-03-25T13:10:00.002+08:00

Malaysian Business
By Gurmeet Kaur

THANKS TO THE SPECTACULAR RISE IN COMMODITY PRICES, PLANTATION TYCOON TAN SRI LEE SHIN CHENG IS NOW FIRMLY ETCHED IN THE TOP THREE OF MALAYSIA'S RICHEST. From sixth position in last year's ranking, Lee is now Malaysia's third-richest tycoon, edging Tan Sri Quek Leng Chan to fourth place.

Benefiting from strong gains in the price of crude palm oil, Lee's flagship IOI Corporation Bhd has seen its share price rising to RM8 at the point of compiling this list, from RM3.70 a year ago. this means that as at Jan 18, 2008, Lee's wealth had doubled to RM14.94 billion.

Similarly, Lee's sons Datuk Lee Yeow Chor and Lee Yeow Seng have seen their net worth increase substantially this year.

On the whole, the share price boom on bursa Malaysia has swelled the collective net worth of Malaysia's 40 richest by 39.2% this year. In total they are worth RM162.66 billion, as against RM116.86 billion previously.

Over the last one year, the Kuala Lumpur composite index (KLCI) had marched to several highs and by Jan 18 had touched 1,439.49 points. This was up 26% from a year ago.

The market's bullish sentiment stemmed mainly from domestic factors given the lingering external uncertainties such as a potential slowdown in the United States and world economies. There was a return of foreign funds to the local bourse from fourth- quarter 2007 following the sharp appreciation of the ringgit against the US dollar.

Against this backdrop, the country's wealthiest had found new ways to increase their fortunes, some through mergers and acquisitions and others by venturing into new markets overseas.

But it should be noted that share prices on bursa Malaysia have since declined on worries of a us recession, hence wiping away some of the wealth netted by these tycoons.

Our 2008 richest Malaysians list sees 18 billionaires - four more than previously. There are two new faces in the top 10 of the list - Berjaya group's Tan Sri Vincent Tan and Amcorp Group's Tan Sri Azman Hashim, who take 8th and 10th spot respectively.

Tan and Azman were also the biggest wealth creators, in percentage terms, this year.

Like in previous years, the bulk of the wealth remains in the hands of the top 10 richest. Together, they account for RM133.70 billion or some 82.2% of the combined wealth of the 40.

Absent from this year's list is Tan Sri Lim Goh Tong of Genting Group, whose demise last year at age 90 marked the passing of one of the country's most successful entrepreneurs. We did not incorporate Lim's wealth in our survey as we have no knowledge of how his 33.3% stake in the family's private holding company, Kien Huat Realty Sdn Bhd, has been distributed.

Lim's stake is valued at RM6.14 billion. In 2007, he was worth RM9.67 billion and ranked fourth.

This year we have decided to include Singapore-based hotelier Ong Beng Seng. Ong controls Singapore-listed Hotel Properties Ltd that co-owns a portfolio of properties in the region, including Hotel Concorde Kuala Lumpur and the franchises for hard rock cafe and Planet Hollywood. He is now increasing his business presence in malaysia with the construction of a US$265 million four seasons hotel and apartment complex in Kuala Lumpur with Malaysian partners.

Ong's wealth is estimated at RM1.74 billion, catapulting him to 14th spot. Besides Ong, there are five other new faces.

Of the 34 old names on the list, 30 are enjoying larger treasure troves while four have had their wealth reduced.

Hong Kong-based Robert Kuok remains firmly entrenched at number one. With an additional RM25 billion to his wealth, it would appear hard for anyone to `dethrone' him in the near future. As of January, Kuok was worth a whopping RM58.11 billion.

Last year, the merger of PPB Oil Palms Bhd into Singapore-listed Wilmar International Ltd boosted Kuok's group's shareholding in the latter to 31%. After the exercise, Wilmar turned into a big-cap stock on the Singapore exchange with a market capitalisation of over US$13 billion. Kuok's wealth from Wilmar alone is worth some RM19.22 billion. The rest of his money comes mainly from Kerry Properties Ltd and Shangri-La Asia Ltd, both listed in Hong Kong.

Retaining the number two spot, T Ananda Krishnan's wealth, at RM19.62 billion, registers a negligible drop. This is largely because the market capitalisation of Astro All Asia Networks Plc had taken a beating on concerns over the performance of its overseas associates.

The bulk of Ananda's wealth still comes from Maxis Communications Bhd, which he took private in 2007. We calculated his stake in Maxis based on the price he had bought out its shareholders, ie, at RM15.60 a share.

Hong Leong group's quek, who made strategic investments in several companies last year, falls one notch to number four although his wealth has increased slightly. Quek, who has substantial minority interests in Kencana Petroleum Bhd, Petra Perdana Bhd and TMC Life Sciences Bhd, is worth RM11.09 billion.

At number five is Tan Sri Syed Mokhtar Albukhary, whose wealth has soared to RM8.55 billion, due in part to corporate restructuring and a buoyant stock market. Public Bank's founder and chairman Tan Sri Teh Hong Piow comes in at six with RM8.06 billion.

Taking seventh place is Rimbunan Hijau Group major shareholder Tan Sri Tiong Hiew King, who during the course of the year had bought directly into some of his listed companies. His wealth is up 59% to RM3.87 billion. Tiong is in the midst of merging his media concerns into Hong Kong-listed Ming Pao Enterprise Corp.

Similarly, at Berjaya Group, Tan Sri Vincent Tan has been increasing his direct stakes in some of his listed companies, probably a signal that things may be looking up for the group. It had recently undergone a restructuring exercise.

Tan's fortune is up two-fold to RM3.41 billion, which puts him as the ninth richest individual.

Berjaya Land Bhd saw a spectacular rise in its share price over the year, pegged largely on property development projects in Vietnam. More recently, Tan acquired 35.69% of Nexnews Bhd from Net Edge Online Sdn Bhd and Tong Kooi Ong. The deal raises Tan's equity interest to 88.35% in nexnews, which publishes The Sun daily.

Prior to this, Tan held a 31.7% direct stake in the media company. Nexnews will be a 54.6% subsidiary of Berjaya Corp Bhd after the purchase. Tong, who ranked 26th on our 2007 survey, did not make the cut this time around as the market capitalisation of his Canadian-listed Taiga Building Products Ltd had seen a steep decline.

Taking ninth place is Goh Tong's son Tan Sri Lim Kok thay of Genting Bhd, who has been pushing ahead with the group's international plans via expansions and acquisitions. Our count shows he is worth RM3.16 billion, up from RM2.6 billion previously.

A three-fold jump in fortune propels Amcorp Group's Tan Sri Azman Hashim to number 10. This comes on the back of a sharp rise in the market capitalisation of AMMB Holdings bhd despite the banker's reduced stake.

In 2007, Azman sold a 11.4% stake in AMMB to Australia & New Zealand Banking Group Ltd (ANZ), reducing Amcorp's interest in AMMB from 32.9%, which was a controlling stake, to 18.8%. The entry of ANZ as a strategic partner has boosted the shares of AMMB.

The patriarch of YTL Group, Tan Sri Yeoh Tiong Lay, has a net worth of RM1.55 billion but this is not enough to keep him in the top 10. He slips to 13th spot.

Other biggest wealth generators are individuals from plantations, oil and gas, property and construction. These were sectors that were `in vogue' or `in favour' last year.

The buoyant outlook on commodities has also benefited brothers Datuk Seri Lee Oi Hian and Datuk Lee Hau Hian. The duo from Batu Kawan Bhd are now billionaires with a net worth of RM1.30 billion each. Younger brother Datuk Lee Soon Hian, who was on our previous list, no longer has any stake in the family flagship company.

Sunway Holdings Bhd's Tan Sri Jeffrey Cheah sees a 117% increase in fortune to RM1.49 billion, putting him in 15th place. Other individuals who saw significant jumps in their worth are datuk Mokhzani Mahathir, Tan Sri Hamdan Mohamad and Raja Datuk Seri Eleena Raja Azlan Shah.

Mokhzani, the major shareholder of Kencana Petroluem Bhd, netted RM993.33 million on the back of a play on oil and gas stocks. Similarly, a surge in the share price of Ranhill Bhd on the possibility of it discovering oil reserves in Indonesia had pushed the wealth of substantial shareholder Hamdan to RM855.32 million. Eleena, who has a 8.02% stake in construction company Gamuda Bhd, is valued at RM838.40 million.

On the other side of the spectrum, some personalities had a bad year. Tan Sri Dr Lim Wee-Chai, the founder of Top Glove Corporation Bhd, sees his wealth slide by 32% to under a billion in tandem with a steep fall in the company's share price. Analysts are concerned that its China operations and a weakening us dollar may affect earnings. Lim now stands at number 27, from 11 previously.

Corporate Malaysia's poster boy Datuk Tony Fernandes of AirAsia Bhd slips 11 rungs to 39th spot after his shares fell 17% on worries over the low-cost carrier's hedging policy. The company is also facing increasing competition from Malaysia airlines and Singapore's Tiger Airways. Another personality whose fortune has declined is Datuk Ahmad Sepawi of Naim Cendera Holdings Bhd.

Among the new entrants, Datuk Tony Tiah of TA Enterprise Bhd rode the wave of a resurgent stock market to clinch a place at number 30. Barred from holding any directorship for the last five years, he is back at TA as its executive chairman.

Datuk Seri Panglima Lau Cho Kun makes his debut at 34th spot, his wealth derived mainly from Hap Seng Consolidated Bhd and Malaysian Mosaics Bhd, while Datuk Lin Yun Ling, Managing Director of Gamuda, is at 35th place.

Tan Sri Liew Kee Sin comes in at 36. His flagship SP Setia Bhd has grown in market capitalisation to become one of the biggest property stocks on bursa Malaysia. Last on the list is Sabahan Kwan Ngen Chung of Kwantas Corporation Bhd, whose stock had surged 96% over the past one year.

Making way for these newcomers are Tunku Yaacob Tunku Abdullah of MAA Holdings, Datuk Tan Heng Chew of Tan Chong Motor Holdings and Datuk Kamarudin Meranun of AirAsia, apart from Nexnews' Tong Kooi Ong and Batu Kawan's Lee (Soon Hian). This is not to say these tycoons have become poorer, only that their counterparts have become richer.

With this year's economic climate expected to be challenging and the stock market bearish, we may see more diminution of paper wealth. But in true entrepreneurial spirit, many of these businessmen are likely to carry out corporate exercises which would unlock further the values of their companies and thereby keep their wealth intact, at least on paper.

WHO'S IN

ONG BENG SENG : Hotel Properties Ltd

DATUK TONY TIAH THEE KIAN : TA Enterprise

DATUK SERI PANGLIMA LAU CHO KUN : Hap Seng

DATUK LIN YUN LING : Gamuda

DATUK SERI LIEW KEE SIN : SP Setia

KWAN NGEN CHUNG : Kwantas Corp

WHO'S OUT

TUNKU YAACOB TUNKU ABDULLAH : MAA Holdings

DATUK LEE SOON HIAN : Batu Kawan

TONG KOOI ONG : Nexnews

DATUK TAN HENG CHEW : Tan Chong Motor Holdings

DATUK KAMARUDIN MERANUN : AirAsia

TAN SRI LIM GOH TONG : Genting (deceased, May 2007)

METHODOLGY

HOW WE ARRIVED AT THE WEALTH FIGURES

In this ranking, which is Malaysian Business' seventh survey of 40 Richest Malaysians, the wealth figures - as in previous years - are calculated based on the individuals' reported personal stakes in listed companies and private holdings that we can place a value on.

Cross-holdings and indirect stakes in subsidiaries are not included to avoid double-counting and overstating of wealth. Personal debt is taken into account only if it has been reported or made known in the annual statements.

The list is by no means a definitive compendium of the wealthiest in Malaysia. There are many who may be richer, with interests buried in inexplicable webs of companies or nominees, which makes tracing difficult.

1} ROBERT KUOK HOCK NIEN, 84

Chairman,

KUOK GROUP & KERRY GROUP

RM58.11 BILLION

THE RAPID URBANISATION AND industrialisation of Asian economies like China and India is accelerating the growth of high net worth individuals across the region. Malaysia's very own Robert Kuok is an example of that trend.

The Sugar King's fortune almost doubled in value in the past 12 months due to higher equity prices, making him by far the wealthiest local businessman in terms of asset value.

Kuok's billions are in fundamentally old-economy assets like property, hospitality, consumer edibles and shipping but are enough to give him a RM40 billion advantage over closest rival - if you can call it that - telecommunications magnet, T Ananda Krishnan. The media-shy billionaire's wealth figure accounts for almost two thirds of the top 10 and half of the total 40 top moneymen and women in this year's wealthiest list.

What glaringly sets Kuok apart from the rest is the multinational nature of his business interests - about 90% of that fortune is derived from his listed assets in financial centres Singapore and Hong Kong.

With the help of family and professional executives, Kuok's businesses empire operates across the globe. The operations are backed by size.

His 50, and counting, luxury Shangri-La hotel chain is expanding across Asia and the Middle East. Europe and America beckon.

The Kuok group's palm oil-based edible oils and fats business, now mainly under Wilmar International Ltd, is among the largest in the world. Wilmar is the largest palm oil-based biodiesel producer in the world.

With some analysts talking of a coming `super cycle' for commodity prices, Kuok's interest in the sector is well defined to capitalise on the event of such a possibility.

Kuok surprised the Hong Kong market last December when he tabled a cash offer of HK$2.37 billion or HK$2.75 per share to acquire the remaining 55.5% stake in his media group, SCMP Group Ltd. At the time of writing, the closing date of the offer was fixed at Feb 11, 2008.

Kouk had previously offered to take Kerry Properties Ltd private but failed as the price offered for the remaining shares was considered low by shareholders.

Rightly so, as the share price of the stock had almost tripled in the past two years then, before the global market sell-down last month. Kuok was however successful in taking his shipping arm, Pacific Carriers Ltd, private in Singapore a few years back.

Kuok's Malaysian interests have remained the steady performers they are known as, with flagship PPB Group Bhd the main asset in hand. The proposed Iskandar Development Region (IDR) in Kuok's home state of Johor could provide some opportunities for the local operations.

Even so, his insurance, telecommunications, shipping, waste and water- treatment businesses continue to grow.

- BY BHUPINDER SINGH

2} TATPARANANDAM ANANDA KRISHNAN, 69

Founder,

USAHA TEGAS SDN BHD

RM19.62 BILLION

T ANANDA KRISHNAN NOW HAS only three listed companies under his control following the privatisation of Maxis Communications Bhd in 2007, which took the market by surprise.

Ananda had bought out shareholders of the mobile phone company at RM15.60 a share in one of the country's largest corporate transactions. At that price, Ananda's 47.1% stake in Maxis gives him a wealth of RM14 billion, out of the total RM19.62 billion he is estimated to be worth as at Jan 18, our cut-off point for this survey.

However, this hardly changes his wealth level in the rankings as shares of Astro All Asia Networks Plc and Measat Global Bhd have underperformed.

Astro shares have declined some 45% in the last one year on concerns over the performance of the company's overseas operations. During the period, its tranche of foreign shares also experienced all-time lows. Astro has said it does not expect its Indonesian and Indian operations to report good earnings in the near term owing to one-off costs such as added spending on content.

Astro's volatile earnings and undervalued share price have fuelled speculation that Ananda would be taking the pay TV operator private next, the same reasons given for the move to privatise Maxis in May 2007.

Interestingly though, soon after the privatisation of Maxis, Saudi Telecom Co emerged as a strategic shareholder in Binariang GSM Sdn Bhd - the vehicle that Ananda used to buy out Maxis. It is still unknown if the entry of Saudi Telecom was part of the plan for Maxis' privatisation, although Maxis officials have said that is not the case. They hold the view that if not for the privatisation, Saudi Telecom would not have come in as a strategic partner.

Still, Ananda must be praised for giving a handsome premium to buy out Maxis shareholders, possibly the highest premium in any of the recent privatisations. And what Ananda essentially did was to raise bonds to finance the privatisation move, effectively taking Maxis out of the equity market and into the bond market - a clever thing to do considering that Maxis is going through a period of high capital outlay in its overseas markets of India and Indonesia.

Maxis will be re-listed on Bursa Malaysia when it is ripe for a listing, Maxis officials have said.

Measat too found 2007 an equally tough year. Its financial performance was negatively impacted by the mismatch of Measat-3's revenue and its finance and depreciation costs associated with the satellite, which started operations early last year.

On the bright side, Measat's earnings are expected to recover this year with its continued expansion of the direct-to-home customer base on Measat-1R. Measat-1R is scheduled to be launched by end-2008 and will facilitate its expansion into the Asia-Pacific region. - BY GURMEET KAUR

3} TAN SRI LEE SHIN CHENG, 69

Group Executive Chairman,

IOI CORPORATION BHD

RM14.94 BILLION

THANKS to the biodiesel craze and rising crude palm oil prices, plantation magnate Tan Sri Lee Shin Cheng sees his wealth more than double from RM6.6 billion to RM14.9 billion this year. His ranking also jumps from number six previously to three.

As research house Credit Suisse puts it, `If crude palm oil prices are going up, every plantation stock is going to go up.' And so, not surprisingly, IOI Corp's share price in January 2008 has more than doubled since December 2006, bringing its market capitalisation to RM48.66 billion.

Lee's wealth is derived mainly from his 76% stake in Progressive Holdings Sdn Bhd, the holding company for his IOI Corp flagship. He also has a 0.77% personal stake in IOI Corp. His sons Datuk Lee Yeow Chor and Lee Yeow Seng are also on our list this year, at number 11 and 12 respectively.

What makes the elder Lee special is the way he made his wealth. He started business by selling ice cream on a bicycle, but with hard work and perseverance went into plantations and propelled his IOI Group into one of the largest oil palm plantations in the world, as well as among the most efficient.

These days, Lee takes a more sedate approach to the family business. Some analysts say he leaves most of IOI Group's day-to- day management to eldest son Yeow Chor. Nonetheless, Lee is consulted on every important development, like the group's recent foray into the United States.

Besides business dealings, Lee is a board member of Universiti Putra Malaysia, adviser to the KL & Selangor Chinese Chamber of Commerce and Industry, a council member of the Malaysian Palm Oil Association (MPOA), and member of the Malaysia-China Business Council.

Additionally, he is widely known via his foundation, Yayasan Tan Sri Datuk Lee Shin Cheng, for providing scholarships to needy students in the country.

- BY KEITH YIU

4} TAN SRI QUEK LENG CHAN, 65

Chairman,

HONG LEONG GROUP

RM11.10 BILLION

TAN SRI QUEK LENG CHAN SEES HIS wealth increase from RM10.3 billion last year to RM11.1 billion this year. However, he is knocked down from third place to fourth by plantation king Tan Sri Lee Shin Cheng, whose fortunes have more-than-doubled on record palm oil prices.

Still, RM11 billion is nothing to pooh-pooh at. Quek has proven himself a maverick at diversification. While building up a formidable financial empire, he has his fingers in several lucrative pies - property development, oil rigs, biotechnology and gaming, to name a few.

In April 2007, Quek bought 4.52 million shares in Hong Leong Financial Group Bhd (HLFG), fuelling talks that he was planning on taking the group private. Currently, the tycoon and shareholders aligned to him own about 79% of HLFG. In October 2007, Quek signed a conditional share sale subscription agreement for Hong Leong Bank Bhd (HLB) to acquire a 19% stake in China's Chengdu City Commercial Bank, in a RM877.5 million deal that is expected to be completed by the second quarter of this year.

With a HLB branch already in Singapore and Hong Kong, this acquisition will pave the way for Quek to tap into the promising financial services sector in China.

His 65%-owned (via Singapore-listed GuocoLand Ltd) property company, Guocoland Malaysia Bhd, saw its share price shoot up by 180% to RM2.94 last year, making it among the best-performing stocks on the Kuala Lumpur Composite Index. GuocoLand Ltd itself will be pumping US$1.3 billion into a property project in Beijing in a run- up to the 2008 Olympic Games; it plans to double its investment in China to US$5.4 billion to tap the country's growing demand for homes.

Quek has also emerged as a significant shareholder in oil and gas fabricator Kencana Petroleum Bhd, which was listed in December 2006 by executive chairman Datuk Mokhzani Mahathir. Other acquisitions last year include a 15.43% stake (via Associated Land Sdn Bhd) in Mesdaq-listed fertility services provider TMC Life Sciences Bhd, and about 10% of Multi- Purpose Holdings Bhd from gaming firm Magnum Corp Bhd.

Just last month, Quek's Guoco Group upped its stake in British casino, bingo and online betting company Rank Group Plc from 3.17% to 3.09%, a move that seems to suggest he is eyeing a bid for the group. Guoco already has a stake in Galaxy Mega Resort - a flagship development with 269,000 sq ft of gaming space and 1,500 hotel rooms - which is scheduled to open later this year in the Cotai peninsula of Macau.

Quek also owns the Mayfaira Claremont casino in London, and his British- based Thistle Hotel chain holds 25 of the 89 casino licences awarded in Britain. The next casino king, perhaps?

- BY JOANNA SZE

5} TAN SRI SYED MOKHTAR ALBUKHARY, 57

Founder,

ALBUKHARY FOUNDATION

RM8.55 BILLION

THE TYCOON GOT SOME 87% OF his wealth from his flagship MMC Corp Bhd, where he holds a 51.8% stake through his private vehicle, Indra Cita Sdn Bhd. The remainder was derived from eight other listed companies including Tradewinds Corporation Bhd (RM459.95 million), DRB-Hicom (RM236.32 million), Bernas (RM135.40 million), Aliran Ihsan Resources (RM149.54) and Padini Holdings (RM121.18 million).

Analysts say MMC Corp would retain its stable outlook this year and `continue to see strong growth coming from its Middle East developments although profits from Saudi Arabia will take two to four years to roll in'.

Recently, the company signed an agreement with the BinLadin Group and a Chinese aluminium smelter to build an aluminium smelter and power plant at Jizan Economic City in Saudi Arabia. Construction of both smelter and power plant is expected to commence in first-half 2008 at a cost of US$2 billion. MMC Corp has completed the acquisition of 20% in the development of the third container terminal in Jeddah port.

Back home, the company has formally secured the double track rail project from Ipoh to Padang Besar worth some RM12.5 billion, to be completed over 60 months. The project is no longer a private finance initiative (PFI) but will be a straight lump-sum contract from the government. It has also announced the disposal of its Butterworth- Kulim Highway to PLUS for RM134 million.

MMC Corp's wholly owned subsidiary Johor Port has also awarded a RM18.5 million contract to Integrated Marine Works Sdn Bhd, which is a 51% owned subsidiary of Seaport Terminal (Johore) Sdn Bhd, which owns 51.8% of MMC Corp (Seaport Terminal is wholly owned by Indra Cita).

Apparently, Integrated Marine Works is the only company approved by the government to conduct dredging works for all major ports within Malaysia. There is a possibility that it will be injected into MMC Corp. If this happens, analysts say the impact to MMC could be tremendous given the huge potential for port dredging works in Malaysia over the next five years.

In September last year, the company signed a memorandum of understanding with Dubai World to develop its 911-hectare Seaport Worldwide Land in Tanjung Bin, Johor into a maritime centre with a gross development value of RM16 billion.

This year, Syed Mokhtar's eyes seem set to focus on Jizan but we could be hugely mistaken to say that his company has no more growth plans for Malaysia. A person of his stature could still surprise on the upside.

- BY JOHANNES RIDU

6} TAN SRI TEH HONG PIOW, 78

Chairman,

PUBLIC BANK BHD

RM8.06 BILLION

TAN SRI TEH HONG PIOW IS ONE of two billionaire-bankers on this year's 40 Richest list (the other is Tan Sri Azman Hashim), with a net worth of RM8.06 billion, up from RM7.55 billion last year.

Teh, who owns 24.20% of Public Bank Bhd and 44.28% of insurance player LPI Capital Bhd, has a net worth of RM7.55 billion. He is richer by RM1.45 billion from the year before, thanks to an increase in the share prices of both the companies.

Teh's gross dividend from Public Bank the last two years has topped more than RM400 million per annum, which works out to more than RM1 million a day!

Not bad for a former bank clerk.

While Public Bank is the country's second-largest lender, it's not resting on its laurels, setting its sights on regional markets. Its wholly owned subsidiary, Cambodian Public Bank, for example, opened its ninth branch in December and is targeting to be the largest lender in Cambodia, having more than doubled its loans portfolio within the past year.

Teh also seems to be aggressively expanding the bank's mutual fund and insurance business. Public Mutual has been launching about a fund a month, for the past four months, targeting investments in the Southeast Asian and Asian markets.

It has also signed a 10-year alliance with the ING Group as part of its strategy to grow its RM15 million insurance business by 10 times over the next five years, in the local and Hong Kong markets.

To add to its already bursting showcase of awards, Public Bank was named Best Bank in Malaysia 2007 by British-based financial publication Euromoney; and Best Domestic Bank in Malaysia, for the sixth time, by Hong Kong-based Asiamoney magazine. It was also the recipient of the Malaysian Business Corporate Governance Award 2006 for the fifth consecutive year, in recognition of its good corporate governance practices.

As a bank for the public, the financial institution also practises corporate social responsibility, having made several donations last yearto, among others, the National Heart Institute Foundation, the Girl Guides Association of Malaysia and the Kuala Lumpur Traffic Police Club. Recently, it contributed RM1.5 million to TAR College to establish the TARC-Tan Sri Dr Teh Hong Piow Student Loan Fund.

- BY JOANNA SZE

7} TAN SRI TIONG HIEW KING, 71

Executive Chairman,

RIMBUNAN HIJAU GROUP

RM3.87 BILLION

THE wealth of timber tycoon Tan Sri Tiong Hiew King has increased almost 60% in the past 12 months. During the course of the year, Tiong bought directly into Ming Pao Enterprise Corp Ltd, Nanyang Press Holdings Bhd, EON Capital Bhd and Rimbunan Sawit Bhd, as well as increased his direct stake in Subur Tiasa Holdings Bhd.

Though these direct stakes were still under 1% each, accumulatively they account for quite a substantial sum. Some counters in his stable of companies had also seen increases in their share prices. Rimbunan Sawit gained 39.4% to RM2.64 per share and EON Capital surged 57.6% to RM2.08. Tiong's unlisted timber concerns have been valued at RM2 billion for the purpose of our calculation.

Tiong is also hailed as the `Rupert Murdoch' of the Chinese media world. The proposed merger of the three media companies under his control - Nanyang Press Holdings Bhd, Sin Chew Media Corp Bhd and Ming Pao Enterprise Corp Ltd - will create the largest Chinese media group outside mainland China and Taiwan.

The merger is slated for completion by mid-year now that shareholders of all three companies had given their approval. A new board of directors for the merged entity, comprising members of the three companies, will be appointed, probably by March. Tiong will assume the position of executive chairman of the enlarged entity.

Sin Chew will have primary listings in Malaysia and Hong Kong. The dual primary listing will be carried out via a reverse take- over of the Hong Kong-listed Ming Pao. The latter will emerge as the new holding company in Sin Chew, Nanyang and the existing business of Ming Pao. The enlarged group, post-merger, is anticipated to expand its global markets into Europe, Australia and Southeast Asia as well as venture into television and radio.

Ming Pao already has a stable of newspapers and magazines in various countries. Its Hong Kong daily Min Pao is the fourth best- selling newspaper in that market. Ming Pao, also available in San Francisco, New York, Vancouver and Toronto, enjoys a stronghold in the Chinese communities there.

Locally, Tiong has a monopoly of the Chinese language newspaper market, with about 90% market share, via his control of Sin Chew, which publishes Sin Chew Daily and Guang Ming Daily, and Nanyang Holdings, which has Nanyang Siang Pau and China Press.

Having cornered the nation's Chinese language newspaper market, Tiong reportedly plans to launch a local English daily early this year in Sarawak, and maybe take it nationwide eventually. Tiong already has an English daily in Papua New Guinea, The National, which started in 1990.

It is believed that the venture may not involve any of his local listed media companies, though Nanyang has had an English language daily licence for the past 12 years.

Tiong has over the past two decades worked on a global scale to erect a diversified business empire spanning six continents. His Rimbunan Hijau group, which started as a timber company in 1975, now has not only timber exporting and timber processing businesses, but had expanded to cover finance, media, IT, mining, aquaculture, agriculture (oil palm plantation), reforestation, trading and property development.

Its overseas timber operations in Papua New Guinea is the largest in that country and it has interests in logging operations in Russia as well. In addition, the Tiong family has a number of business interests and investments in Australia.

- BY YVONNE CHONG

8} TAN SRI VINCENT TAN CHEE YIOUN, 56

Chairman,

BERJAYA GROUP

RM3.41 BILLION THE wealth of Tan Sri Vincent Tan has more than tripled since January 2007, ranking him among the 10 richest Malaysians this year. The increase was mainly due to the spectacular gains in the market capitalisation of listed Berjaya group companies, coupled with larger direct stakes he now holds in these companies.

The share prices of Berjaya Corp Bhd (BJCorp) and Berjaya Land Bhd (BJLand), which had been sub-RM1 in recent years, started picking up slowly towards the end of 2006. The upward momentum accelerated in the third quarter of last year.

Since Jan 19, 2007, BJCorp's share price has shot up to RM1.41 from 25.5 sen; while BJLand registered an even more amazing growth of 681% to RM6.25 from 80 sen. Berjaya Sports Toto Bhd (BJToto) was also popular among investors, gaining 14.13% from RM4.60 to RM5.25.

Meanwhile, Tan has steadily increased his direct interest in BJCorp from 2.1% (as at Jan 11, 2007) to a whopping 28.78% as at the year's end. Over the course of the year, he had also increased his direct stakes in BJLand to 4.49% and BJToto to 5.36%, from 4.18% and 4.74%, respectively.

The investment community had shunned the group as a whole since the late 1990s due to the string of inter-company loans from subsidiaries to parent companies within the group, the most notorious being the RM1 billion that BJToto advanced to its immediate parent company BJLand.

Recognising that Berjaya had scarce goodwill among fund managers and investors, Tan has been trying to build confidence in the group. He recently met up with fund managers and analysts and confidently announced that there would be no more bad news from the group.

Could these share price gains perhaps be an indication that the efforts are starting to bear fruits?

For the past two years, Berjaya had been undergoing a group restructuring exercise to improve its fundamentals, especially at the BJCorp level. Berjaya Group Bhd was taken private in 2006. And last year, good cash flow generating companies Cosway Corp Bhd and Berjaya Capital Bhd were also taken private, in June and August respectively.

Analysts agree that as a group, Berjaya has improved and will further move in the right direction if it sells off lesser performing assets. It is also trying to build another Berjaya in Vietnam. Though it has no track record outside of Malaysia and has little success in its overseas investments, Tan seems confident BJLand will make it in Vietnam.

He is also particularly bullish about Cosway, which he says is successful in Hong Kong and Taiwan and will spread its wings to India, South Korea and Japan. While the dust has yet to settle, Tan made another move that set the market abuzz - the consolidation of the ownership of Nexnews Bhd under BCorp and himself that sparked market talk that a sale of the publisher is in the works. BJCorp last month acquired 35.69% of Nexnews, making it a 54.6%-owned subsidiary. The stake purchase also raised Tan's direct and indirect equity interest to 88.35% in Nexnews.

- BY YVONNE CHONG

9} TAN SRI LIM KOK THAY, 56

Executive Chairman,

GENTING GROUP

RM3.20 BILLION

SINCE WE INTRODUCED THE MB 40 Richest Malaysians survey in 2001, our list has always prominently featured the late Tan Sri Lim Goh Tong, the founder of Genting Group, in one of the top five positions. Last year, he was ranked fourth, with a fortune valued at RM9.67 billion.

Lim was the epitome of the Malaysian Dream. In the 1930s, he set sail to Malaysia with nothing more than the shirt on his back and a few dollars in his pocket. Prior to his death last year, Lim had controlled a sprawling business empire encompassing gaming, plantations, property, power generation, oil and gas exploration, and hospitality.

Today, his son Tan Sri Lim Kok Thay has taken over the mantle of the Genting Group. The transition from father to son appears seamless as Kok Thay had taken control of the day-to-day management of Genting Group since 2000.

Some analysts suggest that Kok Thay is now grooming his nephew Justin Leong. Educated at Harrow and Oriel College, Oxford, and having spent four years working with Goldman Sachs, Leong is the first of Lim's grandsons to have gone into the family business.

As at the time of writing, public documents on the current shareholding structure of Kien Huat Realty, the holding company for most of the Genting group of companies, were unavailable. We thus calculated Kok Thay's wealth using last's year shareholding structure as well as tracing corporate developments over the year.

This year, the tycoon's wealth has catapulted to RM3.2 billion from RM2.6 billion previously, although his ranking has slipped one notch to number nine.

Since the passing of his father, Kok Thay has pushed ahead with the group's international plans. In December, Resorts World said it would increase its Sentosa integrated resort investments from S$5.2 billion to S$6 billion due to rising building costs and more attractions being added.

Kok Thay may also change the wealth direction of his family. In November, JPMorgan Chase pointed out that Genting could raise its value by 61% by selling non-gaming units like the property, oil and gas, and energy businesses. Though this may seem speculative, it could eventually make Genting into a pure gaming company, some analysts say.

This year, Kok Thay may even take Genting Group to Hadong-gun City in South Korea, marking the group's first foray into that country. Under South Korean law, foreigners who invest over US$500 million are allowed to operate casinos, though they have to be exclusive to non-citizens. CIMB Research reckons this could be Genting's newest gem, and Asia's newest gaming hub after Macau.

- BY KEITH YIU

10} TAN SRI AZMAN HASHIM, 68

Executive Chairman,

AMCORP GROUP BHD

RM2.87 BILLION

THE BIGGEST JUMP IN WEALTH this year goes to Tan Sri Azman Hashim, making him the new billionaire and pushing him 12 rungs up to number 10.

The seasoned banker's net worth has grown 4.4 times from just RM656.20 million last year, thanks to surging investor appetite for AMMB Holdings Bhd's shares, which is 18.09% owned by his privately held company AmCorp Group Bhd.

At the time of writing, the company's market capitalisation was RM9.44 billion.

AMMB contributed RM2.11 billion or 73.5% to Azman's wealth. The rest came from AIGB (RM347.80 million), RCE Capital (RM221.06 million), ECM Libra (RM168.67 million) and Mesdaq counter MCM Technologies Bhd (RM26.13 million).

The reason for the strong appetite for AMMB shares could be the increasingly stronger presence of Australia and New Zealand Banking Group Ltd (ANZ) in the banking group's management.

It is learnt that ANZ, which is now AMMB's second-largest shareholder with a 14.1% stake, is gradually incorporating new strategies into the AmBank group. This effort is expected to translate to profit contribution over a period of 12 months.

Analysts say AMMB's hire-purchase portfolio would be reviewed and streamlined with the aim of improving profitability. It is also understood that the bank has reviewed its credit card business and is awaiting execution of strategies.

AMMB has also announced the establishment of AmG Insurance to undertake AmAssurance's general insurance business. It is widely speculated that AMMB is keen to split the AmAssurance life and general business into two entities.

AMMB has also completed its second tranche of corporate non- performing loans (NPLs) with cash proceeds of RM103.2 million. Analysts say the disposal would enable the company to increase cash flow and improve its net margin and profitability by using the proceeds from the NPL sale for new lending activities.

Last year Azman said AMMB was keen to buy another bank, but recently he sang a different tune saying, `the idea is quite a distance away now'.

Personally, 2007 has been quite a tragic year for Azman. He lost his mother Zabedah Shahid, 89, who died of kidney failure in March. In October, he lost his eldest son Shahaz Hashim, 43, who died following a heart ailment.

Azman launched his career in banking with Bank Negara Malaysia in 1960. He served in Malayan Banking Bhd and Kwong Yik Bank Bhd before moving to the AmBank group.

- BY JOHANNES RIDU

11} DATUK LEE YEOW CHOR, 42

Executive Director,

IOI CORPORATION BHD

RM2.33 BILLION

12} LEE YEOW SENG, 29

Special PA to Group CEO,

IOI CORPORATION BHD

RM2.30 BILLION

AS THE SONS OF IOI CORPORAtion Bhd doyen Tan Sri Lee Shin Cheng, Datuk Lee Yeow Chor and Datuk Lee Yeow Seng represent the continuity of the Lee family business into the second generation.

Not unlike a young Shin Cheng in the 1970s and 1980s, his sons have brought new ideas into the IOI Group and taken it further in the new millennium.

Yeow Chor is credited with bringing IOI Properties to Singapore. The group now has a residential development project in Sentosa Cove and expects to start more development projects in the republic over the next two years.

He is also expanding into other countries, with an oil palm refinery in the United States and plans for more plantations in Indonesia.

Both Yeow Chor and Yeow Seng's wealth are derived from their stakes in holding company Progressive Holdings Sdn Bhd, which owns 39.26% of IOI Corp.

As the eldest son, Yeow Chor has an additional RM30 million wealth from his larger personal stake in IOI Corp. He controls a personal stake of 0.09% in IOI Corp while Yeow Seng has 0.01%.

Following the biodiesel craze, IOI's share price has more than doubled since December 2006. Aside from palm oil, IOI Corp also manufactures oleochemicals and specialty oils and fats and is active in property development and investments.

- BY KEITH YIU

13} TAN SRI YEOH TIONG LAY, 78

Executive Chairman, YTL CORPORATION BHD

RM1.75 BILLION

THE PATRIARCH OF THE FORMIdable YTL Group, Tan Sri Yeoh Tiong Lay, sees his net worth increase 12.6% from RM1.55 billion the previous year. However, this is not enough for him to retain his Top 10 placing, putting him in 13th place. Still, RM1.75 billion is not too bad a sum for someone who could very well be retired.

The family company was founded by Yeoh's father, Yeoh Cheng Liam, in 1955. Yeoh, a chartered builder, grew the company in the 1960s and 1970s before handing over the reins to his children, led by eldest son Tan Sri Francis Yeoh Sock Ping.

Today, flagship YTL Corporation Bhd is one of Bursa Malaysia's largest conglomerates, boasting a track record of 55% compounded growth since its listing in 1986, with four other listed subsidiaries involved in sectors such as power generation, property, cement and technology.

The younger generations of Yeohs are determined to bring the family business empire to even greater heights, with a target US$100 billion in market capitalisation by 2020. (Currently, the group has a combined market capitalisation of about RM30 billion, or about US$9 billion).

`The company has a great history and strong foundation to work towards becoming a strong company,' said Francis in a recent interview. `The people in the early days, who understood the value of the brand, were able to continually grow the business year-in- year-out in revenue and profits, and to continue to pay dividends.'

Financial year ended June 30, 2007 was the 23rd consecutive year that YTL Corp declared dividends to its shareholders, and record ones at that - three interim dividends of 15% each, a final dividend of 5% and a restricted offer for sale of one ordinary share of RM0.50 in YTL Power International Bhd, at an offer price of RM1, for every 10 YTL Corp shares.

That same year, net profit for the group grew 20.5% to RM1.4 million, from RM1.2 million last year. Net profit for the three months ended Sept 30, 2007 rose 46% to RM224.6 million from RM154.1 million a year earlier.

Last month, Yeoh was conferred the `Order of the Rising Sun, Goldrays with Neck Ribbon' by the Emperor of Japan in recognition of his efforts in promoting economic cooperation between Malaysia and Japan. YTL Corp was the first Malaysian (and non-Japanese Asian) company to be listed on the Tokyo Stock Exchange in 1996, while Yeoh is also an active member of the Malaysia Japan Economic Association.

Yeoh has been honorary life president of the Master Builders Association Malaysia since 1988, and is the past president and life member of the International Federation of Asian and Western Pacific Contractors' Association.

- BY JOANNA SZE

14} ONG BENG SENG, 62

Co-founder and Managing Director,

HOTEL PROPERTIES LTD (SINGAPORE)

RM1.74 BILLION

THE SECRETIVE YET FLAMBOYANT Ong Beng Seng is new in this year's list. He was excluded in previous lists due to his residency in Singapore and the fact that his operations were mainly located there. But of late he has been increasing his investments in Malaysia with his Malaysian business partner Tan Sri Syed Mohd Yusof Syed Nasir.

Ong was born into a wealthy family in Malaysia but the family moved to Singapore in 1950 when he was four years old. But he remains a Malaysian. Ong quickly displayed a talent for making money and by the early 1970s had earned his first fortune in a business selling shipping insurance. In 1975, Ong joined his tycoon father- in-law, Peter Fu Yun Siak, in Fu's company Kuo International.

Recognising the potential for entering the property market, Ong formed Hotel Properties Pte Ltd in 1981 to lead Kuo International's acquisition of hotels and other properties. The year after, the company went public in Singapore, changing its name to Hotel Properties Ltd (HPL).

From just two hotels back in 1991, Ong's flagship company HPL grew to a stable of 19 hotels with nearly 4,000 rooms in eight countries. Through its wholly owned subsidiaries, HPL Hotels & Resorts Pte Ltd and Concorde Hotels and Resorts (M) Sdn Bhd, the group provides hotel management services to a number of hotels in the region.

The HPL group also develops prime, luxurious residential properties, mostly in Singapore, as well as rental and sales operations on completed residential properties and commercial units.

Through its associated companies, HPL holds franchises to operate Hard Rock Cafes in Asia (excluding Japan) and owns nine Hard Rock Cafes in the region, including the one in Kuala Lumpur. It also sells and distributes Haagen-Dazs ice cream in Malaysia and Singapore. In addition, it owns Planet Hollywood Malaysia.

HPL-managed hotels in Malaysia include Concorde Hotel Kuala Lumpur, Concorde Hotel Shah Alam, Lakehouse Cameron Highlands and Casa del Mar, Langkawi. HPL is expecting to open Malaysia's first Hard Rock Hotel in Penang this year.

Most of Ong's business dealings in Malaysia are through partnership with Syed Mohd Yusof, who also looks after the business interests of Selangor's Sultan Sharafuddin Idris Shah.

Most publicised of the trio's venture is the construction of a US$265 million Four Seasons hotel and apartment complex in Kuala Lumpur, next to the Petronas Twin Towers. The venture, under Venus Assets Sdn Bhd and on Ong's privately owned land, will be one of the largest construction projects in the city.

Meanwhile, Ong's wife Christina is one of Asia's style icons, the chatelaine of a fashion empire that includes ownership of the licences for Jil Sander and Issey Miyake in Asia, Giorgio Armani in Australia, and Donna Karan in Britain. Forbes listed Christina Ong as 36th in its Singapore rich list, with a net worth of S$150 million.

It is difficult to estimate the Ongs' total worth as most of their lucrative franchises, and some luxury properties, are held via privately owned companies such as the Como Resorts & Hotels and Club 21.

Club 21 operates 200 fashion stores worldwide and Ishop, which claims to be Asia's largest Apple reseller. Como owns several luxury spas and hotels in various countries.

Through holding company Challice Ltd, the Ongs control Britain's Mulberry Group Plc with 59.6% ownership. Mulberry makes and sells high-end accessories, and select women's and men's apparel.

Through private holding company 98 Holdings Pte Ltd, Ong holds 51.23% of Singapore-listed Natsteel Ltd. Natsteel's principal activities are in manufacturing and trading of building products, lime, industrial chemicals and spreader crane, property and resort development, and investment holding.

- BY YVONNE CHONG

15} TAN SRI JEFFREY CHEAH FOOK LING, 62

Chairman,

SUNWAY GROUP

RM1.49 BILLION

THE WEALTH OF TAN SRI JEFFREY Cheah has more than doubled to RM1.49 billion, thanks to impressive gains in the share prices of Sunway Holdings Bhd and Sunway City Bhd (SunCity). Sunway shares had surged 144% to RM1.71 while SunCity gained 69.23% to RM4.40.

The group sees strong prospects going forward, especially with the restructuring exercise of Sunway Infrastructure Bhd (SunInfra) completed. Sunway Holdings is close to divesting its 36.16% stake in loss-making SunInfra to bondholders, marking the exit of the group from the highway concession business altogether.

SunInfra, through Sistem Lingkaran-Lebuhraya Kajang Sdn Bhd (SILK), has a concession to collect toll at the RM1.25 billion, 37km highway in Kajang until 2037. But poor traffic volume has affected toll collection.

Sunway has successfully expanded its construction materials, quarrying and property development business abroad. Half the earnings of Sunway Holdings for the financial year ending June 30 are expected to come from overseas, especially Singapore, India, China, Vietnam, Trinidad and Tobago. Its construction, quarry and building materials divisions also stand to benefit from the Ninth Malaysia Plan while the supply of construction materials to Singapore will also boost earnings.

The Sunway story started in 1974 when Cheah founded a tin-mining company, the SungeiWay Enterprise, with a paid-up capital of RM100,000. Today, Sunway is a thriving conglomerate with total shareholders' funds of around RM1.5 billion.

The group's flagship project - the multi-billion ringgit Bandar Sunway development - has received awards and international recognition as a tourism landmark. Sunway describes the development as an engineering miracle that transformed 323 hectares of disused and derelict mining land into an integrated, self-contained resort township surrounded by lush greenery.

In line with the Sunway credo for excellence, the group recently garnered the prestigious sixth placing, the first for any Malaysian company, on the Hewitt-Fortune-RBL Top Companies for Leaders 2007 - Asia Pacific.

- BY YVONNE CHONG

16} DATUK YAW TECK SENG, 70

Founder,

SAMLING GROUP

RM1.39 BILLION

ALTHOUGH DATUK YAW TECK Seng's ranking slips three notches, his equity worth has improved by some RM300 million over the past year. Last March, the Miri-based timber tycoon took Lingui Developments Bhd private and relisted it under Samling Global Ltd on the Hong Kong Stock Exchange.

The listing was well received but Samling Global's share price has gone on a free fall since last July, losing a third of its value at the time of writing, over concerns for the outlook for the group. If not, the wealth figure of the Yaw family, held mainly through holding company Samling Strategic Sdn Bhd, would have been much higher.

The man leading Yaw's integrated timber, development and plantation interests is his eldest son Yaw Chee Ming. Both men are known to keep a low profile. Samling has some four million hectares of forest resources spread across Malaysia, Guyana and New Zealand. The group's main markets for its timber and related products are China, Japan and India.

Yaw's plantations business under Glenealy Plantations (Malaya) Bhd is working to grow its planted acreage via acquisitions and sub- licensing deals.

Construction and property development however will also be an area Samling is set to expand in. The group has hotels in Sarawak and is involved in development projects such as the land reclamation project in Miri, after which the place will be developed with commercial and residential properties. The group portfolio of construction and development projects could expand further within the Sarawak Regional Corridor of Development.

- BY BHUPINDER SINGH

17} DATUK SERI LEE OI HIAN, 58

Non-Independent, Non-Executive Chairman,

BATU KAWAN BHD

RM1.304 BILLION

18} DATUK LEE HAU HIAN, 55

Managing Director,

BATU KAWAN BHD

RM1.301 BILLION

DATUK Seri Lee Oi Hian, eldest son of the late rubber baron Tan Sri Lee Loy Seng, is just RM3 million richer than his younger brother Datuk Lee Hau Hian. Their younger brother Datuk Lee Soon Hian, 51, who was on our list last year, no longer has a stake in the family flagship company Batu Kawan Bhd, which owns 46% of plantation giant KL Kepong Bhd.

The two brothers derived some 97% of their wealth from Batu Kawan, which they collectively own 48% of through their private vehicle, Wan Hin Investments Sdn Bhd. At the time of writing, Batu Kawan had a market capitalisation of RM5.19 billion.

The remainder of their fortune - about RM29 million each - came from their direct interest in KL Kepong, a top plantation stock on Bursa Malaysia with a market capitalisation of RM19.10 billion as at Jan 18, our cut-off point for calculation in this survey.

In November last year, KL Kepong acquired the entire equity interest of Shanghai Jinshan Jinwei Chemical Company Ltd, which manufacturers fatty amines, cationic surfactants and auxiliary materials for the cosmetics, detergent and tobacco industries. It also acquired chemical company Uniqema (Malaysia) Sdn Bhd earlier in September.

Lately, Batu Kawan and KL Kepong have been acquiring Indonesian plantation companies with huge land banks in East and Central Kalimantan.

There was a sharp decline in crude palm oil (CPO) prices in the third quarter of January. Analysts believe this was prompted by fears that slower US economic growth would slow demand for energy, including bioethanol. They, however, are still bullish about plantation stocks, with most maintaining CPO price assumptions of RM3,100 per tonne this year, RM2,800 next year and RM2,650 in 2010.

If that is true and the long-term outlook for CPO remains bullish, the brothers should still be on our list come next year.

- BY JOHANNES RIDU

19} TAN SRI FRANCIS YEOH SOCK PING, 54

Managing Director

YTL CORPORATION BHD

RM993.33 MILLION

20} DATUK MOKHZANI MAHATHIR, 46

Executive Chairman,

KENCANA PETROLEUM BHD

RM975.46 MILLION

DATUK MOKHZANI MAHATHIR falls short of just RM25 million to being a billionaire this year. Still, his fortune grew quite substantially from just RM654.9 million last year, thanks to a commendable performance by his flagship Kencana Petroleum Bhd, where he holds a 46.53% stake.

Kencana is one of the seven holders of major fabrication licences in Malaysia. This allows it to fabricate offshore platform topsides and jackets. It also has an engineering arm that gives it an added edge in securing more technologically demanding contracts.

Its current projects include jobs in Malaysia and overseas with exposure to the new gas field developments offshore Sarawak, Malaysia-Thai Joint Development Area and the Asia Petroleum hub.

The company's new venture will be drilling rig fabrication and rig ownership that it is entering through a new yard acquired in Lumut and also a joint venture with Thailand's Mermaid Maritime Pte Ltd. Kencana is likely to secure its drilling rigs charter contract by March this year, analysts say. The company, through its 100%- owned fabrication unit, Kencana HL, is building a tender assisted drilling rig for its 25%-owned associate Mermaid Kencana Rig 1. This drilling rig will then be supplied to its 60%-owned subsidiary, Kencana Drilling Sdn Bhd, once the lattersources a drilling contract.

The company started out in 1982 as a contractor for fabrication yards providing skilled and unskilled manpower. It was founded as Hin Loon Engineering. It began operations in 2000 at its Lumut Fabrication Yard where it fabricates structures related to offshore production plaftforms. It was awarded its first topside and jacket project from Murphy Oil in 2002 for the West Patricia field.

Mokhzani, who is the second son of former Prime Minister Tun Dr Mahathir Mohamad, loves motor-sports. He has been chairman of Sepang International Circuit Sdn Bhd since 2003. He graduated with a degree in petroleum engineering from the University of Tulsa, Oklahoma in 1987.

He began his career as a wellsite operations engineer with Sarawak Shell Bhd in 1987 and later joined Tongkah Holdings Bhd in 1989, where he was appointed group managing director, a post he held till 2001. He was also chairman and group CEO of Pantai Holdings Bhd till 2001. He now sits on the board of Goldtron Ltd (Singapore), Kencana Capital Sdn Bhd and several private limited companies.

- BY JOHANNES RIDU

21} DATUK YEOH SEOK HONG, 49

Director,

YTL CORPORATION BHD

RM883.71 MILLION

22} DATUK YEOH SEOK KIAN, 51

Deputy Managing Director,

YTL CORPORATION BHD

RM881.58 MILLION

23} DATUK MICHAEL YEOH SOCK SIONG, 48

Director,

YTL CORPORATION BHD

RM878.85 MILLION

24} DATUK MARK YEOH SEOK KAH, 43

Director,

YTL CORPORATION BHD

RM862.97 MILLION

ONCE AGAIN, THE YEOH BROTHers make the list with an increased combined net worth of RM4.5 billion, from RM4.26 billion last year. This excludes their parents and sisters' share of the family fortune.

With Francis at the helm, each sibling is also actively involved in various areas of the group, with their children also emerging on the company front.

For the ambitious Yeohs, Malaysia is not big enough a market. As it is, approximately 48% of the group's revenue in 2007 came from its overseas operations.

It continues to be aggressively making its mark on the international business arena, especially in countries known for their transparency and stability such as Singapore, Hong Kong, the United Kingdom, the United Arab Emirates and Australia, as well as emerging regional markets.

Managing director Francis has also hinted at the possibility of listing YTL Corp overseas to address the issue of its undervalued shares.

Utility arm YTL Power International Bhd's 33.5%-owned ElectraNet Pty Ltd owns and operates the power transmission grid for South Australia under a 200-year concession, and its wholly owned UK- based Wessex Water Ltd has been named as Britain's top water and sewerage company.

It also owns 35% of PT Jawa Power, which has a 1,200 MW power plant in Indonesia, and a 100% interest in its operating and maintenance company PT YTL Jawa Timur.

The group's newest luxury resort, Spa Village Resort Tembok, in Bali, Indonesia, commenced operations last year, while it will be jointly developing a RM270 million luxury resort in Koh Samui, Thailand, with Lehman Brothers Investments Pte Ltd.

Down in Singapore, the group recently won a tender to buy 50 condominiums en bloc for S$435 million (RM1.01 billion) cash - its third land acquisition in Singapore in the past two years (apart from the high- end Lakefront and Sandy Island residential development projects in Sentosa Cove).

While the local cement operations have benefited from improved operational efficiencies and increased selling prices, the group recently purchased Zhejiang Lin'an Jin Yuan Cement Co Ltd in China - the country's largest cement manufacturer with a 60% market share - in the Lin'an district of Zhejiang Province.

The group is also exporting its Starhill branding and mall- management expertise, beginning with a Starhill Gallery concept in Dubai, and then possibly London, Shanghai, Moscow, Jakarta, Oman and Abu Dhabi.

YTL has also won a RM1.03 billion government contract to clean up Malaysia's polluted rivers using its technology from Wessex, a step in its bid to expand its water-treatment business throughout Asia.

On the homefront, the group's construction arm is expected to further benefit from projects under the Ninth Malaysia Plan, while property development was boosted by government initiatives.

The first phase of d7, YTL Land's maiden commercial development in Sentul East, Kuala Lumpur, was snapped up within a day at its pre- launch sales.

Besides being a firm promoter of the arts and philanthropic causes, YTL

25} TAN SRI HAMDAN MOHAMAD, 52

President/Chief Executive,

RANHILL BHD

RM855.32 MILLION

THE FORTUNE OF TAN SRI HAMDAN Mohamad soared to RM855.32 million this year following a rally in the share price of Ranhill Bhd, the entrepreneur's flagship company. As at Jan 18, Ranhill shares had risen by 73% to push Hamdan up to 25th spot from 32nd previously.

Hamdan has a 9.94% direct stake in Ranhill and another 54.3% indirectly via his private holding company Ranhill Corporation Sdn Bhd and Lambang Optima Sdn Bhd.

A structural engineer by training, Hamdan has transformed Ranhill from a pure engineering company to one with three core businesses - utility (power and water), infrastructure and energy (oil and gas). Its power and utility units are both listed on Bursa Malaysia.

He is amongst the few Bumiputera businessmen to have successfully spearheaded Malaysian companies overseas. Out of the RM12.5 billion worth of projects it has in hand, 85% are foreign jobs.

These ventures span from Asia to North Africa and the Americas and are expected to keep Hamdan and his company busy for the next four to five years.

It is eyeing to penetrate other market overseas and have identified Russia, Brazil, Kazakhstan, Turkmenistan and Iran as potential destinations.

With this huge order book, Hamdan is optimistic that Ranhill should be able to record about RM2 billion in revenue for the financial year (FY) ending June 30, 2008, and RM3 billion in 2009. Ranhill returned to the black in FY2007 with net profit of RM 116 million on the back of RM1.47 billion in revenue.

Last year it set the market abuzz when the company announced it may have found oil reserves at one of its wells in the Citarum PSC in West Java, Indonesia. With rising oil prices, any discovery would augur well for a company drilling for oil for the first time. And that would add another dimension to its diversified asset ownership and portfolio. And swell revenues too!

- BY GURMEET KAUR

26} RAJA DATUK SERI ELEENA RAJA AZLAN SHAH, 47

Non-Independent, Non-Executive Director,

GAMUDA BHD

RM838.40 MILLION

RAJA DATUK SERI ELEENA RAJA Azlan Shah is one of only two ladies that made it to this year's list. The barrister-at-law from Lincoln's Inn, London, currently runs her own legal practice. She was appointed to the board of Gamuda on June 1, 1992.

Via private investment arm Generasi Setia (M) Sdn Bhd and a small direct stake, Eleena holds 8.02% equity interest in Gamuda. The increase in Gamuda's share price has resulted in her wealth swelling by 78.65%, compared to last year.

Gamuda is a leader in turnkey and build-operate-transfer (BOT) civil engineering infrastructure and township development, with projects and investments in South East and Far East Asia, Indochina, South Asia and the Middle East.

Last month, Gamuda was named Euromoney's `Best Managed and Governed Company in Asia 2008' for construction services. It was cited as having clear and differentiated business strategy, strong execution and delivery, high dividend payout, good management accessibility and transparency in investor relations.

Gamuda is involved in many high profile jobs including the construction of the SMART tunnel in Kuala Lumpur. Together with MMC Corp, it was recently awarded the revived project to construct a double-track railway line from Ipoh to Padang Besar worth RM12.5 billion. The multi-billion project was shelved in 2003 as part of the government's initiative to narrow the budget deficit. MMC- Gamuda had also won the project back then, worth RM8.5 billion at that time.

Meanwhile, the group's wholly owned Gamuda Land Vietnam LLC is developing the RM10 billion Yen So Park integrated development project near Hanoi. The project includes the design and construction of a RM1.5 billion sewerage treatment plant, the biggest in Vietnam; and Vietnam's largest public park. Both are expected to be ready by 2010.

Gamuda will at the same location develop a new urban centre and residential township with a gross development value of RM8 billion over the next 8-10 years. The development is expected to start contributing strongly to group earnings from the current financial year ending July 31 onwards. Gamuda is said to be also eyeing another property project in west Hanoi.

Gamuda's earnings visibility is good as its RM11 billion order book underpins construction earnings up to the financial year-end 2012.

Eleena, who is the daughter of the Sultan of Perak, is also a director in KAF-Seagroatt & Campbell Holdings Bhd, in which she has some 15% interest, and Danau Permai Resort Bhd.

- BY YVONNE CHONG

27} TAN SRI DR LIM WEE-CHAI, 50

Executive Chairman,

TOP GLOVE CORPORATION BHD

RM787.25 MILLION

FOR THE FIRST TIME, TAN SRI DR Lim Wee Chai's wealth has taken a dive since the listing of Top Glove Corporation Bhd in 2002. He is only one of four Malaysian tycoons to see their wealth falling.

On the back of Top Glove's reduced market capitalisation of RM1698.5 million in 2008, Lim's wealth currently stands at RM787.25 million, down 32% year-on-year. The share price of Top Glove has fallen over 50% in the last one year.

Source here

IOI buying Sarawak oil palm estates for RM439m

2008-03-18T14:35:00.000+08:00

PETALING JAYA: IOI Corporation Bhd is expanding its oil palm plantations in Sarawak by proposing to acquire a major stake in several companies for RM439.85mil.

It said these companies owned a combined 44,350ha of land in the state, of which 13,500ha was planted with oil palm. Of the total area, 4,500 ha or 33% of the planted area was mature and the remaining 9,000ha would be maturing progressively.

“IOI Group intends to progressively develop the remaining 30,850ha of non-planted areas into oil palm plantations within the next few years,” it said in a statement to Bursa Malaysia on Tuesday.

The company said its effective stake in the plantation lands owned by the acquiree companies was equivalent to about 65% in value terms while Sarawak’s Land Custody and Development Authority and local natives mainly held the balance.

“The ownership structure therefore, enables IOI Corp to lead and manage the oil palm cultivation whilst enabling the State and the local natives to also share the benefits in the success of the business, thereby providing long-term benefits to the local community,” it said.

IOI Corp said the purchase consideration was based on the current valuation for the 44,350ha of plantation land, of which 13,500ha was planted and a 60-tonne-per-hour palm oil mill.

The IOI Group owns 169,450ha in Malaysia (of which 149,000ha is planted) and another 152,000ha in Indonesia, of which 43,000ha is planted, via a joint venture.

“The proposed acquisition will therefore increase the Group’s plantation holdings to 213,800ha in Malaysia and to 365,800ha overall,” it said.

It said the acquisition would provide immediate income contribution due to matured oil palm trees. The proposed acquisition would also provide synergistic benefits to the group’s plantation operation in Sarawak where it has 9,000ha.

Source here

12-03-2008: IOI eyes plantation land, European plants

2008-03-14T09:22:00.000+08:00

PUTRAJAYA: IOI Corp, the world’s third-biggest listed palm oil firm, plans to buy large tracts of plantation land in Malaysia and set up processing plants in Europe to boost revenues and take advantage of the global commodity boom.

Executive director Lee Yeow Chor said soaring palm oil prices would boost IOI Corp’s net profit in the year to end-June and, buoyed by strong cash flow, the company would continue to pay out higher dividends.

Lee told Reuters in an interview yesterday that IOI had been approached by privately-held companies offering to sell palm plantation land in Sarawak. “We will try and get a big chunk, if we can,” he said.

“Our preferred targets are partly planted areas or land that has already been cleared and is ready for planting.” IOI, which also has interests in property development and investment, had a net cash flow of RM1.32 billion in the year to June 2007.

Its total cash balance at end-December was RM1.64 billion. Profit in September-December rose 52%. “In the first half, we had RM1 billion in net profit, and we expect it to be good during the rest of the year,” Lee said, adding: “We will continue the trend of the first half.”

The price of palm oil has risen 25% so far this year, hitting a record RM4,486 a tonne on March 4, on soaring demand for vegetable oils, both from the food and fuel sectors.

IOI has embarked on a downstream expansion drive, and plans to build palm oil processing facilities in Europe and the United States. It plans to start a second refinery in the Dutch port city of Rotterdam to process 300,000 tonnes of palm oil a year, and a unit to produce 100,000 tonnes of margarine by 2010.

“We already have 800,000 tonnes refinery (capacity), now adjacent to it we are going to put up another refinery and a processing plant for margarines,” Lee said, adding that construction would begin early in the calendar second half.

In the United States, IOI is looking for land to build a 180,000 tonnes per annum speciality fats plant to cater to the confectionery industry.

“We should buy land in the next few months, and operations will start in two years time,” Lee said.

IOI will start planting in Indonesia where it has a joint venture company that owns 170,000 hectares of plantation land. Last year, IOI signed a pact with Indonesia’s Harita Group for a US$130 million (RM419.9 million) venture to cultivate palm oil. — Reuters

Source here

IOI Corp’s best quarterly results of RM581m net profit

2008-02-17T13:35:00.000+08:00

KUALA LUMPUR: IOI Corporation Bhd posted its best quarterly results for the second quarter to Dec 31, 2007, with a net profit of RM581.19 million, driven by record high palm oil prices, increased volume for resource-based manufacturing and higher property sales.

Revenue rose to RM3.46 billion from RM2.24 billion a year ago, while earnings per share was 9.67 sen. IOI Corp has declared a gross interim dividend of 70% or 7 sen per 10 sen share.

For the six-month period, net profit surged 62% to RM1.03 billion from RM638.27 million previously.

Announcing its latest results yesterday, IOI Corp said plantation earnings for 1H08 doubled to RM867.6 million boosted by significantly higher crude palm oil prices.

“Average CPO prices realised for 1H08 areRM2,572 per tonne as compared with RM1,560 for the same period last year,” it said.

On its resourced-based manufacturing segment, the company said operating profit rose by 55% at RM281.8 million with the inclusion of profit from Pan Century Group as well as volume and margin growth from its three sub-segments.

IOI Corp said its property segment registered a 14% increase in operating profit to RM204.7 million compared with RM179.1 a year earlier on demand for high-end residential properties.

Kenanga Investment Bank Bhd analyst Yin Shao Yang said IOI Corp’s results were anticipated, adding that the year-on-year (y-o-y) improvement in all of its segments was commendable.

“The main thrust for its performance was the high CPO price. We are forecasting RM2.1 billion net profit for the full year, but it could surprise us should CPO prices remain at current levels,” he said.

Yin said Kenanga Research forecast CPO prices to average at RM3,100 per tonne in 2008.

Meanwhile, IOI Corp’s property unit IOI Properties Bhd has rewarded its shareholders with a higher gross interim dividend of 70 sen a share after announcing a 26.6% rise in net profit for the second quarter ended Dec 31, 2007 to RM90.9 million from RM71.78 million a year ago, on the back of a 14% increase in revenue to RM191.3 million.

In the previous corresponding period, it paid out 35 sen gross interim dividend.

In a separate statement yesterday, IOI Properties said earnings per share for 2Q was 27.93 sen, while net assets per share stood at RM6.54.

The company said its operating profit from property development activities for the first six months increased by RM21.8 million.

“The group also benefited from higher incidental palm oil revenue from its landbank as well as gain of about RM16.7 million from the disposal of non-current assets held for sale,” it said.

Source here

Kuok still the richest

2008-02-17T13:34:00.000+08:00

KUALA LUMPUR: Sugar King Tan Sri Robert Kuok Hock Nien remains the richest Malaysian, ahead by a wide margin from closest rival T. Ananda Krishnan, according to Malaysian Business magazine's list of 40 Richest Malaysians.

The magazine in its Feb 16 issue puts Kuok's wealth at RM58.11bil, which accounts for nearly 36% of the total wealth of the 40 richest.

Tan Sri Robert Kuok Hock Nien

The Hong Kong-based tycoon added a whopping RM25.7bil to his vast fortune last year, due to the higher equity prices of his stable of listed stocks.

It said Ananda Krishnan's fortune however registered a marginal drop to RM19.63bil.

IOI Corp Bhd's Tan Sri Lee Shin Cheng said the magazine, had for the first time put him in the top three of Malaysia's richest by doubling his fortune to RM14.94bil.

Others in the top10 ranking are Tan Sri Quek Leng Chan of Hong Leong Group (RM11.09bil), Tan Sri Syed Mokhtar Albukhary of the Albukhary Foundation (RM8.55bil), Tan Sri Teh Hong Piow of Public Bank group (RM8.06bil), Tan Sri Lim Kok Thay of Genting group (RM3.17bil) and Tan Sri Tiong Hiew King of the Rimbunan Hijau group (RM3.87bil).

The magazine said two tycoons found their way to the Top10 - Tan Sri Vincent Tan of Berjaya group (RM3.41bil) and Tan Sri Azman Hashim of Amcorp group (RM2.87bil).

“They dislodged YTL Corp patriarch Tan Sri Yeoh Tiong Lay who slips to 13th position (RM1.75bil),” it said.

Among the notable new entrants to the list is Singapore-based Ong Beng Seng who, at RM1.74bil, ranks number 14.

The others are Datuk Tony Tiah Thee Kian of TA Enterprise Bhd, Datuk Seri Lau Cho Kun of Gek Poh Holdings, Datuk Lin Yun Ling of Gamuda Bhd, Datuk Seri Liew Kee Sin of SP Setia Bhd and Kwan Ngen Chung of Kwantas Corp Bhd.

The full list of the 40 tycoons and details of their wealth appears in the magazine's Feb 16 issue. Their wealth was assessed based on the value of their stakes in listed companies as at Jan 18, 2008, the magazine said.– Bernama

Source here

IOI Corp earnings surge 52% in Q2

2008-02-15T17:20:00.000+08:00

PETALING JAYA: IOI Corp Bhd's net income surged 52% in the second quarter ended Dec 31, as soaring palm oil prices boosted profits from plantation and resource-based manufacturing businesses.

The three-month earnings swelled to a record RM581.2mil, or 9.71 sen per share, compared with RM382.6mil, or 6.25 sen per share, a year earlier.

Revenue jumped to RM3.46bil from RM2.26bil before.

IOI Corp released its latest quarterly results during the market's midday break, reflecting a growing trend among big corporations to announce vital corporate development to investors in a more effective manner.

“The stock is pricey at these levels, but the premium could be justified given its size, trading liquidity and probably because most people consider IOI Corp to be the best proxy for rising palm oil prices,'' a local fund manager said.

Last year, IOI Corp bought its first overseas plantation land in Indonesia and acquired a rival refinery in Johor. Last month, the company announced a plan to raise RM600mil in fresh capital to help fund further expansion.

IOI Corp shares closed 20 sen higher at RM8.15 yesterday on volume of 13.3 million.

The stock hit a record RM8.55 a month ago.

IOI Corp's six-month earnings jumped 62% to RM1.03bil against RM638mil a year earlier.

The company said its palm oil fetched RM2,572 a tonne during the six months, up from RM1,560 a tonne in the year before.

“Barring unforeseen circumstances, all business segments are expected to continue to perform well in FY08,'' it told Bursa Malaysia.

The crude palm oil (CPO) futures on Bursa Derivatives, the global benchmark, had risen 80% over the past one year amid fears the global edible oils market was in short supply to meet growing demand worldwide.

The CPO futures contract for April delivery jumped RM91 to RM3,451 a tonne yesterday, its highest closing price.

“We remain upbeat on CPO price prospects as supply deficits for other edible oils will encourage consumers to switch to palm oil,'' CIMB Investment Bank said in an update on the sector yesterday.

Shares in Kuala Lumpur Kepong Bhd (KLK), the third most valuable plantation stocks behind Sime Darby and IOI Corp, hit a record RM19.20 yesterday, up 60 sen.

KLK is due to announce its first quarter ended Dec 31 results on Feb 20.

In a separate statement, IOI Properties Bhd said it posted a net profit of RM91mil on sales of RM191mil for the second quarter. Its six-month net income surged to RM171mil on turnover of RM396.8mil.

The improved performance was attributed to “higher demand for residential properties”, it said.

IOI Properties proposed a gross interim dividend of 60 sen per share for the period.

Source here

Locked-in profits

2008-01-14T09:12:00.000+08:00

Going by the oversubscription for IOI Corp Bhd's exchangeable bonds, demand for palm oil stocks continues to be very strong.

IOI announced last week that its exchangeable bonds, also known as convertible bonds (CBs), were snapped up within 1½ hours after the book opened. The offering attracted bids for US$3bil (RM9.8bil), an oversubscription six times the planned issue size of US$500mil (RM1.6bil).

As a result of the strong demand from global investors, the issue size was expanded to US$600mil (RM1.9bil), the company said.

The demand was huge in spite of the exchange price of RM11.00, which was a premium of 30.2% over IOI Corp's share price of RM8.45 on Jan 8.

The investors obviously believe IOI Corp shares price would grow to well as RM11.00 each, which would be their only payoff because the yield-to-maturity is just 1.25%.

For IOI Corp, it has raised a lot of cash at a very low cost, which could be used for a very sizeable acquisition.

Source here

Q&A with IOI Group head: A passion for oil palm

2008-01-10T11:02:00.000+08:00

Business Times

Tuesday - January 08, 2008

Tan Sri Lee Shin Cheng, the head of IOI Group, is the fourth richest person in Malaysia and an icon to many businessmen. Lee, who started off selling ice-cream on a bicycle, tells Chok Suat Ling that with hard work, perseverance and discipline, anything is possible.

QUESTION: Tan Sri, you are well known for your passion for your work and the oil palm plantations. There is a story making the rounds about how you even talk to the trees. What were the lessons learned along the way which helped you stay focused, as it were?

ANSWER: Yes, besides loving my good management team, I also love all my palm trees because they are all my workers, too. When we are sleeping, they are still working for us for 24 hours without complaining.

Therefore, I feel that it is my duty to look after these trees well. I make sure the welfare of these ‘good staff’ of mine are well taken care of by giving them adequate nutrition and by removing any hazards around them. I try to understand their behaviour and to communicate with them. When palm trees look ‘pale’ or exhibit abnormal characteristics, they could be ‘hungry’ (malnourished); suffering from disease or pest attack; or the palm base could be waterlogged; or there might be weeds surrounding the trees. When I see these signs of unhealthiness, I will turn to the manager or the assistant in the estate to let them know that the palm trees are complaining to me that they are hungry or suffering from disease. I will check with the manager or the assistant and find out why they are not taking care of the trees. Maybe because of this, people say I could talk to the trees!

Q: Did you think, back in the days when you were selling ice-cream, that you would become one of the most respected plantation men in the business?

A: I never thought this would happen. But coincidentally, when I was selling ice-cream at the age of 11 for four years, most of the time I would sell them at oil palm and rubber plantations.

Q: What were the personal highlights for you?

A: My happiest day was in 1989 when I bought over Dunlop Estate from Multi-Purpose Holdings Bhd. This was because during the late 1960s, I had applied for a job at Dunlop Estate but they did not employ me because I was not adequately qualified. If they had employed me, I would probably not have owned the entire asset of Dunlop Estate today. This purchase marked a significant milestone in my life.

Q: Were there low points as well? And how did you overcome them?

A: I started working in a small plantation as a supervisor in 1961. I worked my way up to be an assistant, and then manager. At that point in time, the estate was broken up and sold in fragments. The management paid me a handsome retrenchment benefit. With that money and savings, I started a pig farm with a friend where we bred up to more than 2,000 pigs. A year later, when the pigs were infected with swine fever, we had no choice but to close down the farm. I managed to recover only RM5,000. With that money, I started a petrol station and worked part-time in a plantation. That was my low point.

Q: You remain very hands-on with your business. Why? Do you think that is the mark of a great leader?

A: Yes, I remain very hands-on and focused on the business. I strongly believe nothing can replace that. If things need to be done by today, we have to get it done right now, not tomorrow. A good leader must set a good precedent for the rest to follow.

Q: What are the values you want to pass on to your children?

A: I would like to pass good values and discipline to my children, and I always tell them honesty is the best policy and to also contribute to society one way or another.

Q: How do you think you can get the younger generation to feel this same passion for their work, their country?

A: Unfortunately, today’s younger generation do not enjoy this type of work. They love IT (information technology) and quick profit. They do not have the stamina to wait. In agriculture, the gestation period is quite long. But I am trying to figure out how to enhance this industry and improve productivity for the benefit of the people. To be a planter is a very noble profession. The future in this field is very bright. Therefore, I urge young people to change their attitudes.

Q: Who are the Malaysians who are your heroes? Who inspire you?

A: There was a man in the mid-1960s who had the vision and wisdom to acquire the plantation company which was established and owned by the British by buying over the shares owned by them. This was none other than the late Tan Sri Lee Loy Seng. His courage and vision, to a certain extent, turned around the plantation industry in Malaysia. His tireless efforts to contribute to this industry to make it what it is today should be remembered. His achievements and contributions to this sector, to a certain extent, inspired me to be in this industry. I would say he is my role model.

Q: What are the things you would like to see improved upon?

A: Crude palm oil (CPO) is very versatile, and the usage of CPO is tremendous. However, usable land for the planting of oil palm trees is very limited. The only way to improve the volume of the CPO is to increase the productivity by using the same area of land. If we can increase the productivity per hectare from the national average of four tonnes of CPO to eight tonnes, then we will be able to double the CPO production from the current 16 million tonnes to 32 millions tonnes a year. If we are able to do that, then we are already doing a big favour to satisfy the oil consumption for the people. Perhaps, this would better satisfy the competitive needs for both the food and industrial, particularly biofuel, use. This is one of the things I hope to benchmark for the industry. With the cooperation of everyone, I’m sure this target is achievable.

Source here

IOI Corp raises US$600mil

2008-01-10T10:58:00.000+08:00

KUALA LUMPUR: IOI Corp Bhd said it raised US$600mil from a convertible bond, taking advantage of a global commodity boom and giving it a war chest for acquisitions.

IOI has since September 2004 raised about US$1.8bil selling dollar-denominated bonds, in a period when the price of Malaysian crude palm oil has more than doubled and the world looks to the edible oil as an alternative energy source.

IOI in November said it plans to acquire privately held firms and boost investments in the US and Indonesia. – Reuters

IOI Prop unit buys Singapore land for condo project

2008-01-10T10:57:00.000+08:00

Thursday January 10, 2008

By ANGIE NG

PETALING JAYA: IOI Properties (S) Pte Ltd (IOIP), a wholly owned unit of IOI Properties Bhd, together with its joint venture partner, Ho Bee Investment Ltd, have successfully tendered for a 5.3-acre land parcel in Singapore’s Sentosa Cove, for S$1.097bil cash.

In a filing with Bursa Malaysia yesterday, IOI Properties said a new joint venture company, Pinnacle (Sentosa) Pte Ltd, which is 65%-owned by IOI Properties, had been set up to acquire the land and undertake its development into an upmarket condominium project.

The 99-year leasehold land parcel under the Pinnacle Collection has a maximum permissible gross plot ratio of 2.6.

The site would have a condominium of up to 20 storeys, the tallest building in Sentosa Cove. The maximum number of units allowed in the development is 357, while the maximum permissible gross floor area is 602,359 sq ft.

An artist’s impression of the Seaview Collection condominiums

When completed, the project will offer panoramic views of the South China Sea, the Southern Islands, Tanjong golf course and the city skyline.

The site is the final piece of condominium land to be launched by Sentosa Cove. Pinnacle Collection is one of the two condominium parcels flanking the entrance of the marina leading into Sentosa Cove.

Ho Bee is also the joint-venture partner of IOIP for the successful tender and acquisition in March last year of a 3.6-acre parcel under the Seaview Collection in Sentosa Cove.

A luxury condominium development comprising two eight-storey apartment blocks of 151 units of various sizes is being planned on the site, and sales are expected to commence in the first half of the year.

A company spokesman said the two developments in Sentosa Cove would start contributing to IOI Properties from the next financial year ending June 30, 2009.

He said the designs for the Pinnacle condominiums were still being finalised. The residences would have an average built-up area of 2,000 sq ft.

Going by the existing market price of between S$2,000 and S$3,000 per sq ft for recent condominium projects in Singapore, the Pinnacle Collection project can expect to generate a gross development value of close to S$2bil while the Seaview project will gross around S$1.25bil.

In the statement, IOI Properties said Singapore was chosen as a platform for the group’s regional diversification as properties in the republic were presently one of the most sought after in the region.

“Our association with luxury landmark developments in Sentosa Cove will enhance the IOI Properties brand name and reputation as a luxury quality homes developer not only in Malaysia and Singapore, but also in the larger South-East Asia region,” it added.

Source here

Exciting year ahead for corporate Malaysia

2007-12-15T09:55:00.000+08:00

Tan Sri Lee Shing Cheng

TAN SRI LEE SHIN CHENG

Executive Chairman

IOI Corp Bhd

YOUR views on the escalating risks in the plantation sector’s crucial growth parameters such as the scope of expanding oil palm areas, control of harvesting costs and maintaining high yields?

The most challenging factor for growth would be finding suitable land to cultivate. First, land prices have escalated. Second, not all agronomically-plantable land is suitable in today’s context.

We are all concerned about the environment and the impact businesses have on the environment. We need to ensure that business is conducted under sustainable business models. In the case of palm oil, the cultivation of oil palm should be in accordance with sustainability principles and criteria as prescribed by Roundtable of Sustainable Palm Oil, of which IOI is a founding member.

Among other things, this means for instance, that virgin forest or areas with “high conservation value” or peat areas more than 2m deep, should not be touched.

On the cost front, the most serious area of cost increases is fertilisers. Five years ago, we used to spend about RM800 per hectare per annum on fertilisers. Today, the amount has almost doubled and it's still going up. Fortunately, the strengthening ringgit has mitigated the increase.

As for maintaining high yields, we hope to not only maintain but to further improve as well. Oil yields per hectare can be further improved both in terms of FFB yield as well as extraction rates at the mills.

How do you foresee the 2008 growth outlook for biofuel/biodiesel industry in Malaysia amid the international trade limitations, higher feedstock (CPO) prices, sustainability and the food versus fuel debate?

The growth of the biofuel/biodiesel industry is mainly driven by Europe and the US. For these regions, the main consideration is energy security and therefore, governments are backing the development of the bio-energy sector either in the form of subsidies or mandated use.

There are clear targets in these countries and hence the growth trend is expected to continue. Besides, for the developed countries, food prices is not such a big issue. For poorer nations in Asia and Africa, escalating food prices is a serious concern.

In Malaysia, cooking oil is a price-controlled item and the bigger producers are required to contribute to a cooking oil cess. Hence, since we even have to subsidise cooking oil, we will not be ready for the biodiesel industry to take off in Malaysia as yet.

Globally, the amount of palm oil that is used for bio-energy is very low (less than 5%). Palm oil will continue to face obstacles as a feedstock for bio-energy in places like Europe.

However, despite all these, we see palm oil demand and palm oil prices going up. This is because as more rapeseed oil, soy oil and corn gets diverted to the bio-energy sector, more palm oil is needed to fill up the shortfall in the food and other sectors.

I see the food versus fuel debate continuing. Unfortunately, the world is hungry for both food and fuel. But as I said, actually, very little of palm oil goes to fuel at the moment.

Do you agree that the structural changes in the global commodities supply and demand pattern i.e. the biodiesel market, the fight for hectarage to plant corn for ethanol instead of soy bean and rapeseed in the US and South America, trans-fatty acid concerns, China and India relaxing their palm oil import tariffs, will lend support to higher CPO prices in 2008?

Prices of soft commodities in general are expected to remain high. In the case of vegetable oil, supply over the next 12 months, with the notable exception of palm oil, is expected to lag behind consumption again.

Hence, prices of soy oil, rapeseed oil and sunflower oil will remain high and will even go higher if projected production is cut by unfavourable weather.

Palm oil production growth, on the other hand, will be above average but this is not a bearish sign because its surplus supply is needed to make up for the deficits in the other oil.

Overall, for 2008, palm oil prices will follow the lead of other vegetable oil which prices are expected to be high.

Your company’s strategies in 2008 and the rationale behind it, i.e. overseas expansion, refineries, mills, biomass, biodiesel projects or carbon credit initiatives.

We are bullish about the long-term prospects of palm oil and will continue to invest at the appropriate time and in an appropriate manner to grow the business, both upstream and downstream.

We recently entered into a joint venture (JV) to invest in oil palm cultivation in Indonesia. Our effective interest in the JV is equivalent to about 70,000ha, which is nearly 50% increase to current planted hectarage in Malaysia. It is, therefore, a very significant addition and this will likely be the main area of focus in 2008 for the upstream sector.

We will also further invest in downstream operations in Malaysia as well as Europe and the US over the next two years to capture demand, further value add and innovate on the use of our palm oil fractions.

Also, not forgetting that we have a sizeable property business that should also see decent growth as the market is improving.

The current volatile CPO prices from RM2,900 to RM3,000 per ton have made it very difficult for planters to lock in their CPO selling prices. At what price would your company be “comfortable” with for FY2008 and FY2009? Kindly indicate your average cost of production annually.

We are “comfortable” with the current price levels but will not be aggressive on forward sales, as there are upside risks. Our production cost is about RM550 per tonne. However, cost of sales, after factoring in transport costs, Sabah sales tax and cooking oil cess, is about RM950 per tonne.

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IOI building muscle to become Stronger and Bigger

2007-12-13T20:55:00.001+08:00

Although it wasn’t published officially the people around the palm oil industry knew what awaken the plantation sector. It used to be one of the most boring sectors and the related stocks’ movement could out you to sleep. It started with the Super-Merger that saw the merger of Kumpulan Guthrie Berhad, Sime Darby Berhad and Golden Hope Plantations Berhad creating the biggest listed palm oil producer in the world in terms of output and market value under a new company called Synergy Drive. As expected the branding of Sime Darby was too valuable to be put to sleep and the temporary Synergy Drive was renamed Sime Darby Berhad (SIME: stock-code 4197) again.

In actual fact the Super-Merger involved 9 (nine) listed companies and somehow StockTube believed the shareholders were under-offered. Almost simultaneously, other palm oil players were awaken and sensing that they could be eaten up alive (not that it have not happen before), the boring chess game begun its interesting movement. Less than a month after the mega-merger, IOI Corp Berhad (KLSE: IOICORP, stock-code 1961) acquired Pan Century Group, operator of an edible oils refinery for RM423 million from one of India’s conglomerates, the Aditya Birla Group. The acquisition by IOI Corp created the the world’s biggest vegetable oil-based fatty acid producer in the world.

Then the Kuok Group, controlled by tycoon and richest man in Malaysia, Tan Sri Robert Kuok, undertook a mammoth S$6.6 billion (RM15.18 billion) corporate exercise to merge several of its companies in Malaysia and Singapore - Wilmar International Ltd (SIN: F34) and PPB Oil Palms Bhd (KLSE: PPB, stock-code 4065). It was then Kuala Lumpur Kepong Berhad’s (KLSE: KLK, stock-code 2445) turn when it announced the acquisition of Swiss-based Dr W Kolb Holdings AG, a specialty oleochemical holdings company, for 135 million Swiss francs (RM393.39 million).
Amongst all the players, the most aggressive would be IOI Corp Berhad. Taking the second seat in terms of market capitalization behind Sime Darby Berhad is not a situation to be taken with complacency. In terms of landbank IOI Corp’s figure stands at 320,000 ha (after the 152,504ha of palm oil plantation in Kalimantan from Indonesia's Harita Group) while Sime Darby is comfortably at 543,626ha of landbank. And IOI Corp’s executive chairman Tan Sri Lee Shin Cheng has no plan of stopping at the current level.

Yesterday, it was reported that IOI shareholders approved a planned US$600 million (RM2 billion) issue of bonds exchangeable to new shares. "We actually have enough funds for expansion and upgrading of manufacturing facilities. The money from this bond issue is mainly for acquisitions." IOI executive chairman Tan Sri Lee Shin Cheng said after shareholders meeting in Putrajaya.

While Lee said the company was looking at either Malaysia or the region for future acquisitions and it’s not to “compete” with Sime Darby, you just got to take that with a pinch of salt. He knew too well how the corporate scenes in Malaysia are being played. Furthermore to be known as the most efficient producer in squeezing six tonnes of crude palm oil per hectare in a year, Tan Sri Lee Shin Cheng is no ordinary man you could squeeze easily. In addition there is still some RM300 million left unspent in IOI's planned capital expenditure for the current year ending June 2008. Add that to the latest RM2 billion war-chests from the bonds issued and you can guarantee of more interesting acquisition(s) from IOI Corp.

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IOI Corp plans second US plant

2007-12-13T15:19:00.000+08:00

PUTRAJAYA: IOI Corporation Bhd plans to set up a second plant in the East Coast of the US to expand its existing businesses there, apart from its Chicago plant as part of its expansion drive.

“We are in the middle of negotiating to purchase the land. Geographically, it has to be in the right position, as logistics costs are concerns to us,” said its group executive director Datuk Lee Yeow Chor.

Presently, IOI Corp has a plant in Chicago to produce fats for food ingredients manufacturers with a capacity of 200,000 tonnes annually.

With the second plant being planned, Lee said it would increase the total capacity in the US to 400,000 tonnes annually.

He said IOI Corp was eyeing the East Coast to set up the new plant because it has the second highest concentration of food ingredient manufacturers, after Chicago.

However, he added that the group would also target to expand their operations in the West Coast in the future.

On IOI Corp operations, Lee said the group was on an acquisition trail, with an appetite for more lands for its plantation and property development divisions, as well as stakes in other companies, other than expanding its plants both locally and overseas, as part of its strategy for group expansion.

The group, which had recently acquired several Indonesia-based palm oil plantation companies for RM289 million, was raising funds to finance its acquisition activities, via the issuance of convertible bonds. IOI Corp had issued two convertible bonds previously, raising a total of US$720 million (RM2.38 billion).

Speaking to reporters after the company’s EGM here yesterday, its group executive chairman Tan Sri Datuk Lee Shin Cheng said: “Continuous acquisition is one of our agendas. I am interested in everything, as far as business is concerned.”

At the company EGM, shareholders approved the up to US$600 million convertible bonds issue by its wholly owned subsidiary IOI Resources (L) Bhd. Lee said: “We raise funds not only for expansion, but also for acquisition. We are looking at buying more land here or in other countries.”

However, IOI Corp had not targeted to make any acquisitions yet, he said, adding that the funds raised from the bonds issuance would be on a standby mode, in the event any acquisitions cropped up.

Meanwhile, Lee dismissed reports that IOI Corp was acquiring a substantial stake in Unico-Desa Plantations Bhd as rumours, and said he had not received any propositions from the latter regarding the stake sale.

He said: “I have not received any offers, but if the opportunity arises and the offer is reasonable, I will consider it.”

It was reported in October that IOI Corp was seeking its board’s approval to buy a substantial stake in Unico-Desa, as part of its plan to grow its plantation business. Lee added that the group also did not intend to privatise its property development arm IOI Properties Bhd for the moment, contrary to analysts’ reports.

The group was also finalising plans to expand its operations in Johor, which would concentrate on creating value-added products.

Lee Shin Cheng said: “Currently, we have three businesses in Pasir Gudang — refinery, specialty fats and oleochemical — and we want to make use of our unique position to create a synergy between these businesses, to come up with value-added products.”

He added that the group expected its profitability to be enhanced by the second half of fiscal year 2009, following the completion of its acquisition of plantation lands in Indonesia.

On the possibility of the government revoking licences among companies that did not use them to produce biofuel, Lee Shin Cheng said it would not affect IOI Corp’s businesses.

He added that the group had not embarked on producing biodiesel, as it was not profitable, due to high crude palm oil (CPO) prices. “It is still difficult to convert CPO into biodiesel because of the high prices, and it might even increase again next year,” he said.

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Voices '08: I believe in Malaysia, says Tony

2007-12-13T09:38:00.000+08:00

What do Malaysians think about Malaysia? What are the experiences that shape our feelings for the country? Over the next few weeks, we will hear from different Malaysians as they share with us their thoughts and ideas about Malaysia in this series called Voices. Not coincidentally, this is also the theme for the NST’s year-end pullout. ABDUL RAZAK AHMAD gets the ball rolling by talking to Datuk Tony Fernandes who is doing everything he can to sell Brand Malaysia to Malaysians and the rest of the world.

Q: What has the year been like?

A: It’s been a phenomenal year. Our profits have been great, we won airline of the year (Airline Of The Year 2007 award by the Centre for Asia Pacific Aviation), the first time a Malaysian company has done that, beating Emirates, Singapore Airlines and others. I suppose getting the Singapore-Kuala Lumpur routes represents a feather in our cap. We also launched AirAsia X, and it’s great to be in partnership with (Sir) Richard Branson, who is an icon himself.

One accomplishment I’m really proud of is that wherever I go we’re always referred to as Malaysia AirAsia, or Malaysia’s AirAsia. If I walk around in KL people know me but in London, very few do. But that number is growing, and that shows that our brand is becoming more significant.

Q: What are the major lessons?

A: Maybe, patience. It has its virtue sometimes, but we are a company in a rush. Malaysia Airlines is celebrating its 60th year, and we are only celebrating our sixth year, but we’re still proud to see what we’ve been able to achieve. It shows what Malaysia and Malaysians can do if we put our minds to it.

Q: What were the low points? And how did you overcome them?

A: I’m disappointed that another uneven surface has been opened, that Firefly can operate from Subang and we can’t. I pray for the day that we can have a level playing field with Malaysia Airlines. I feel that we could do many more things together, and I feel that as Malaysian companies, competition is good and we should compete, and the real competition is out there. And we should do more together.

Q: You often lament about an uneven playing field between your private company and the government-linked MAS. Is this a problem in general for other private companies in the country?

A: Sometimes the problem of a private company versus a GLC is we just don’t get the airtime the GLC gets with the political leadership. There’s no one to blame for this. I have confidence in the government but it is frustrating. I think we could be twice the size we are now.

Q: You have travelled widely, lived and worked abroad, yet you chose to come back to Malaysia. Why?

A: I came back, and I’m a big advocate (of returning). When I went to a UKEC (United Kingdom and Eire Council for Malaysian Students) programme and gave speeches at universities in England, I advocated that people should come home.

One, it’s home. I don’t care what anyone says. There is only one home. Anywhere else is adopted. And no one can take that from me. I have a blue IC and a red passport. And I’m proud of it, even though I can live anywhere in the world, and most places would welcome me.

Two, I’m very nationalistic. From a young age, my mother used to be so pro-Singapore Airlines and anti-MAS, and now, funny how life has changed - I always argue with her about MAS being the best. In the last Olympics I watched every single Malaysian perform. If I support the All Blacks in rugby, or the West Indies or India in cricket, it’s not my country.

Third, I was born here; I received a good education because my parents did well in Malaysia, and so I felt it was my responsibility to come back. It’s not perfect, Malaysia. But where is perfect?

I’m the sort of person who doesn’t believe in just sitting back and complaining. Come back and make a difference. Now especially, more and more have this perception that, oh, there must be someone behind Tony Fernandes. I’ve heard so many different names. The most famous being Ananda Krishnan, Tan Sri Azman Hashim, (Tan Sri) Vincent Tan, (Datuk) Mokhzani Mahathir, Khairy Jamaluddin, I mean you name it. But we are the best advertisement that anything is possible in Malaysia.

Q: Was there any point in the early years when you returned that you felt you should have stayed away?

A: No, never. I’ve always loved this place and our people. We’re unique. James Ingram (American soul musician) — I brought him down when I was in Warner Music — once said to me the American government should visit here. Because he couldn’t get over how all the races here get together, the intermarriage, the people going out together. Yeah, we have our racial problems, but we generally get on with each other.

I know I’ve persuaded many people to come back. I know that I have been involved in bringing many who migrated abroad to come back. And I don’t think for one minute they have regretted it.

Q: Who are your Malaysian heroes, the people who inspire you?

A: There are so many. I always talk about “Mr IOI” (Tan Sri Lee Shin Cheng, founder of the IOI Group). I love his story of how he started, selling ice cream on a bicycle, and now he’s owner of one of the biggest oleo-chemical companies. And you know what I love about him? I went to one of his estates, and I noticed his passion. He’s obviously now a very, very rich guy, but he still enjoys going out there and showing me seeds. I mean, to me, a seed is just a seed, but his passion! So that guy really stands out for me.

Tan Sri Naza (Tan Sri S.M. Nasimuddin S.M. Amin, Naza Group chairman and chief executive officer) is another guy I really like. He never ages and is always pushing to be the best, and Tan Sri G. Gnanalingam (Westports Malaysia Sdn Bhd chairman), too. He started in one industry, got a chance in another. All of them seized their chances.

And look at what Nazir Razak (Datuk Mohamed Nazir Razak, group chief executive, CIMB) has done. Yeah, he was born with a silver spoon. He’s my friend. He wasn’t my friend three years ago — I thought he was arrogant. I didn’t give CIMB our IPO. But I’m proud of what he’s done and to be associated with him now. He’s gone out there and put CIMB on the map of banking in the world. He goes out there and he brands. I mean, come on, CIMB is now a household name.

Q: What’s the common trait of the people who inspire you?

A: Most of them managed to come up from nowhere and just do something. They are people whom, given a chance, will do much more, and who succeed despite adversity. I love it, I love seeing it.

Q: Every now and then, something happens that unites all Malaysians and there is an overwhelming “proud to be Malaysian feeling". Recent examples are usually sports-related, like when Nicol David became the World No 1 in women’s squash. Do you think we as Malaysians have lost that feeling?

A: Do I think Malaysians feel this less? No, but I think Malaysians need icons. When Zainal Abidin and Sheila Majid gained success as music artistes, and even Siti Nurhaliza, they’re about the only artistes able to ignite that Malaysian pride. You’ll see all the races supporting them, able to transcend their differences.

So we do want a Malaysian “brand". I’m proud of being part of it. We don’t sell it enough — this Bangsa Malaysia we talk about. I hope for the next generation, well, it’s my dream anyway, that we don’t put ourselves down as Chinese, Indian, Malay, but as Malaysian. And I hope there’s a Barisan Nasional that I can join. I think our “brand” is our biggest selling point, because there’s no country in Asia quite like us.

Q: How do you think we can get the youth of Malaysia to be proud of our country?

A: What I tell them is, one, I say, look at AirAsia. We were just three guys from the music industry with not a lot of money, no experience, no political connections — zero. Datuk Pahamin Rajab was the only guy with connections, and with due respect to him, he’s not the person with the strongest political connections around, though he is respected.

But we’ve been able to build an airline and compete with Malaysia Airlines and have slowly been able to close the uneven playing field. No one has an answer to explain that away! So who says you can’t do anything?

Where else in Asean can this (AirAsia) happen? In the aviation industry, nowhere. Singapore hasn’t managed to do it. And in Singapore it’s a function of the government. Tiger Air is owned by Temasek and Singapore Airlines.

So no one can give me an answer and say Malaysia is not fair. No one can say that no one gets equal opportunities. I did. I am living proof that we can. That’s what I tell the students, like those in the UK. I said you live in a wonderful country, don’t believe what you hear, it’s up to you, because Malaysians are their own worst enemy.

But I don’t think anyone in any country would have been able to achieve what we have, and it’s because of our government, and it’s because of the fairly level playing field. Of course, I want it completely level, who wouldn’t? But in six years, we’ve achieved a lot, and we owe a lot of it to the government.

Q: What’s your wish for 2008 — for AirAsia, and also your hopes as a Malaysian?

A: I hope the country can spur more private investors. I hope there can be more encouragement given, and that it’s not rhetoric. I hope more investment can be put in education, much more emphasis on education.

You asked is it just sports that bring us together. No. It can be music, movies, and companies. When we have something to be proud about, that brings us together. So what’s lacking in education? More emphasis on sports and the arts.

From the sports field, you get your first eradication of colour. No one can say “pass the ball to him — he’s an Indian winger, or a Chinese or Malay". It’s from there you first learn teamwork and working together.

Now, we’re just memorising 15,000 books to get 15As. How sad it is to see a girl committing suicide because she didn’t get it. Education is not about getting 15As, which I didn’t come close to getting.

Education is also about sports, interaction, about learning how to work as a team, about leadership. And we do not put enough emphasis on sports.

You can put all the money into FAM, but where did the Soh Chin Auns and Arumugams and all those guys come from? Schools, and playing football in the padang. Where are the padang nowadays?

Two, is art, drama and music. That’s where you gain a sharing of culture and breaking down the invisible barriers.

Q: Do you face problems getting people with the right qualities when you recruit?

A: Yeah, I do. We’re not getting enough people who can think out of the box. Because you don’t have creativity in schools anymore. Like in art and drama, which is where you learn to express yourself. So, getting enough creative thinkers is a problem.

Q: On occasion though we do see bits and pieces of a Malaysia united and able to transcend ethnic barriers.

A: It’s coming, it was there, we lost it, and now I think the government’s aim is to promote it. I don’t believe that anyone is marginalised. I believe that ultimately we marginalise ourselves.

Malaysians are their own worst enemies. They just sit there and say, “No, it can’t be done,” even before they try. My philosophy is, try and, if you fail, try again. Because I don’t want to reach 55 and say “I should have done this". But my dream for the future is my belief — I really believe in Malaysia as a Malaysian.

Take the AirAsia Academy. It’s a microcosm of what I’d like to see in Malaysian schools. I don’t think any pilot training academy is like ours. We have lots of social functions, we get the crew and pilots and engineers to do concert productions, we involve ourselves in sports.

Why do I do that? Because I have a bigger problem than just Malaysia. I have Thailand, Philippines and Indonesia. And they all have different cultures and they all want to do their own thing.

I bring them all to the academy, I don’t care if you’re from Cambodia or whatever, you train in one place. It’s in that one place that we mould one culture.

Q: Would you please share with us what you think is a quintessential Malaysian experience?

A: Two things come to mind. One is food. If you want to see one thing that unifies our country it’s food. Whether it’s a mamak stall or Malay stall, everyone knows everything about all our good food regardless of race.

The other quintessential experience I find peculiar to our country is how we criticise our sportsmen.

Whether you’re Indian, Chinese, Malay, Punjabi, when you sit in the audience at Bukit Jalil and our team is playing badly, the insults are all the same!

That’s the other thing I love about Malaysia. We always know how to do it better!

But anyone can try to argue with me about Malaysia not being a great place and I’d tear them apart. I really would, because I believe in Malaysia.

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Top 20 GLCs’ market cap up RM121b from 2004

2007-12-05T22:09:00.000+08:00

PUTRAJAYA: The country’s top 20 government-linked companies’ (GLCs) market capitalisation had risen by more than 83% or RM121 billion as of Nov 30 since the introduction of a comprehensive transformation plan in 2004 with strong emphasis on achievement of key performance indicators (KPI).

“During the same period, total shareholder returns of the top 20 GLCs recorded 24.4% compound annual growth rate (CAGR) outperforming the Kuala Lumpur Composite Index (KLCI) by 3.3%,” said Prime Minister Datuk Seri Abdullah Ahmad Badawi in his speech at the Forbes Asia Fabulous 50 and Businessman of the Year Award ceremony here yesterday.

Abdullah (left) with Forbes executive editor and Forbes Asia Tim Ferguson at the Q&A session.

“I am particularly proud of our efforts in transforming GLCs. We introduced KPIs, strengthened corporate governance and instituted many other wide-ranging reforms. Where needed, we brought in new leadership which helped to infuse new energy and new ideas,” he said.

Abdullah said the seeds for excellence had been sown, with the likes of CIMB Investment Bank, which is set to become a regional giant while Malaysia Airlines had made a “dramatic comeback” with ambition to become a five-star airline. Abdullah also cited Sime Darby Bhd as another conglomerate set to embark on a journey of becoming a global giant.

IOI Corp chairman Tan Sri Lee Shin Cheng receiving the Forbes Asia Fabulous 50 award from International Trade and Industries Minister Datuk Seri Rafidah Aziz in Putrajaya.

At the ceremony, Minister of International Trade and Industries Datuk Seri Rafidah Aziz presented the awards to the winners of the third annual Forbes Asia Fabulous 50 list, in which IOI Corporation Bhd emerged as the only Malaysian company in the list.

IOI Corp chairman Tan Sri Lee Shin Cheng received the award from Rafidah. IOI Corp recorded its highest earnings ever with a net profit of RM1.48 billion for the financial year ended June 30, 2007, buoyed by record earnings from the palm oil and property business segments.

India’s ICICI Bank managing director and chief executive officer KV Kamath claimed the honour of being the Businessman of the Year.

Source here

IOI denies considering Unico stake

2007-11-27T13:04:00.000+08:00

KUALA LUMPUR: Plantation giant IOI Corp Bhd has denied claims that it is considering purchasing a controlling stake in Unico-Desa Plantations Bhd.

Chairman Tan Sri Lee Shin Cheng said reports that IOI had shown interest in buying the stake were false.

“We have not made any offer to purchase (the stake). We have not had any expressions of interest, nothing,” he told a press conference yesterday.

Tan Sri Lee Shin Cheng

“However, if Unico made an official offer to sell its stake (in Unico-Desa), then we will consider. Otherwise, we are not interested,” he added.

Unico Holdings Bhd, Unico-Desa's parent company, had at its AGM in September passed a mandate to undertake a capital-reduction exercise and distribute 29.3% of Unico-Desa's shares to its shareholders.

The mandate did not sit well with ousted director Tan Kai Hee, who publicly voiced his opinion via several Chinese newspapers.

Associated Chinese Chambers of Commerce and Industry of Malaysia president Tan Sri William Cheng, playing the role of mediator, stepped in and met with the Unico group's board members and Tan to resolve the issue.

Cheng had proposed a solution – sell off a total 57% stake in Unico-Desa en bloc (as opposed to the 29.3%), which would fetch a better premium.

When news of Cheng's proposal (to sell a 57% stake) hit the market, speculations were rampant on a potential takeover, with IOI headlining the rumour list. So strong were the speculations that Unico-Desa's stock soared.

Late last week, Unico group's board of directors held a press conference to announce that it had initiated defamation proceedings against Tan and also to set the record straight about the takeover, at least on Unico's part.

Unico group chairman Tan Sri Lim Guan Teik had then confirmed the group was going ahead with the mandate approved at its AGM and that it would carry on with the capital-reduction exercise.

He also confirmed that the group never received any offer to purchase the (controlling) stake in Unico-Desa either from IOI or anyone else, but said that the group would consider the option (to sell) if it received a “good offer.”

Source here

Strong palm oil prices to boost Malaysia’s IOI

2007-11-22T18:41:00.001+08:00

By Umesh Desai

HONG KONG, Nov 22 (Reuters) - Malaysian oil palm planter IOI Corp’s move to cut capital and plan to issue bonds has raised alarm bells at rating agencies but analysts say solid cash flows and strong oils prices will bolster its credit profile.

Standard & Poor’s Ratings Services and Moody’s Investors Services have both warned they may cut the ratings on Malaysia’s second-most valuable firm after it revealed a plan to sell $600 million of exchangeable bonds to fund expansion.

The decision to raise funds came after an exercise earlier this year in which the firm used about 1.3 billion ringgit ($387 million) of its cash reserves to cancel one in 20 shares.

“The large capital distribution and the proposed exchangeable bonds issuance will weaken IOI’s financial profile by reducing its buffer against down-cycles,” said Moody’s analyst Peter Choy.

Standard & Poor’s said the company’s financial profile could weaken because rising inflation in key markets may soften demand conditions and put pressure on palm oil prices.

But market analysts say the uptick in crude palm oil prices, up more than 49 percent this year, should continue and the bond offering is unlikely to dent its balance sheet because of strong cash flows.

“We think the price upcycle will extend for another year because supply from Indonesia will not be as large as expected as the severe drought of last year will have a prolonged effect,” said Alvin Tai, analyst with OSK Investment Bank.

Benchmark crude palm oil futures are currently just 1 percent off a record high of 3,013 ringgit a tonne reached two weeks ago.

NEW BOND OFFER

Last week, the company said it plans to issue up to $600 million in 5-year bonds exchangeable into new IOI shares to fund capital expenditure and acquisition opportunities.

The news sparked the warning from rating agencies, which hit the firm’s debt and shares.

Its 2015 bonds widened by 40 basis points (bps) to 190/150 bps over 10-year U.S. Treasuries and its 5-year CDS moved out by 20 bps to 60/65 bps. It’s shares are down 7 percent.

But analysts say the concerns that are reflected in the asset price declines are misplaced.

“IOI is a cash cow because of the rising CPO prices,” said James Ratnam, senior research analyst with TA Securities.

He expects IOI to generate 2.7 billion ringgit in cash flow this year, enough to fund its operations and expansion programme.

He said that cash was increasingly becoming important in this sector which is seeing a wave of acquisitions.

The nature of the firm’s acquisition plans means that cash flows would not be impacted after the capital expenditure, OSK’s Tai said.

“They are looking to acquire ready planted assets — in other words those which are giving immediate cash flows,” he said.

CPO is increasingly taking direction from the red-hot energy markets due to its use as a feedstock for biofuel and IOI’s Lee Yeow Chor, group executive director, has predicted prices will hover between 2,800 and 3,100 ringgit per tonne in 2008, straddling current levels.

And although Moody’s expects prices to peak soon, analysts say the company’s diversification provided a cushion.

Dilip Parameswaran, credit analyst with Calyon Corporate & Investment Bank, said IOI’s downstream units would help offset weakness in CPO prices.

“If palm oil prices fall it is negative for the plantation business, but good for the downstream business — there is a natural hedge,” he said.

He expects the bonds to outperform and the cost of debt insurance to fall because of IOI’s solid fundamentals.

Source here

IOI Corp valuations stretched

2007-11-19T16:21:00.000+08:00

19 November 2007

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IOI Corp’s valuations are stretched, trading at 25 times mid-FY09 price-to-earnings (PER) ratio, and fundamental investors with long-term investment horizons should consider unwinding their positions, says Aseambankers Equity Research.

It suggested investors switch to better-valued mid-cap stocks like Asiatic Development Bhd and Tradewinds Plantation Bhd. It added that crude palm oil (CPO) prices would ultimately revert to its mean value, which should be more sustainable at RM2,200 to RM2,400 per tonne over the next two to three years.

“Nevertheless, we acknowledge that IOI could remain a favourite among other investors for trading purposes given its liquidity and proxy to further short term CPO price upward trends.

“We maintain our Fully Valued call on IOI Corp but raise our target price to RM5.80 based on 20 times FY09 EPS (earnings per share) to reflect our earnings adjustment,” it said.

Commenting on IOI Corp’s first quarter (1Q) net profit, Aseambankers Research said the RM452 million was 77% above its and consensus expectations as 1Q is usually a weaker quarter.

All businesses recorded on-year improvements in 1QFY08 as revenue and operating profit jumped to RM3.1 billion (up 64% on-year; up 23% on-quarter) and RM651 million (up 91% on-year; up 1.7% on-quarter) respectively.

Overall margins improved to 21% from 18%, mainly on higher average CPO selling prices of RM2,473 tonnes (versus RM1,483 per tonne in 1QFY07) despite flattish on-year fresh fruit bunches production growth.

Plantations contributed 61% of IOI’s earnings before interest and tax (EBIT) at RM398 million (up 136% on-year; up 54% on-month). Meanwhile, EBIT contribution from the resource-based manufacturing division continues to show improvement with contributions from newly acquired Pan Century and its refinery in Rotterdam.

“IOI is on track set to a net profit record this financial year amidst lofty palm oil prices. We understand half of IOI’s FY08 production has been locked in at RM2,500 tonne,” it said.

“We are raising our FY08-09 net profit forecast by 7.7%-8.4% respectively, factoring higher CPO price assumptions. Maintain Fully Valued with a revised target price of RM5.80 based on 20 times FY09 EPS,” it said.

On IOI’s plans to issue its third five-year exchangeable bonds (EBs) issue for up to US$600 million or RM2 billion in value, the research house said: “We believe this is positive for IOI especially since its conversion price will be referenced at a premium to IOI’s present high share price, which is trading at more than 25 times mid-FY09 PER.”

Aseambankers Research said it was an opportune time for IOI to raise “cheap” fresh capital in view of its ongoing aggressive greenfield projects and its intention to acquire more plantation companies.

It believed these “cheap” funds will help to enhance IOI’s bottom line in the future, on the premise that IOI will not overpay for new assets in view of high asking prices amidst the commodity upcycle.

“The issuance of EBs is expected to have minimal dilution impact on EPS as we anticipate the interest rate to be competitive, at less than 5%. And it will also have little impact on fully diluted EPS on conversion if the EBs are issued at a premium to the present IOI price, which is trading in excess of 25 times mid-FY09 PER,” it said.

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Malaysia's IOI Corp outlook cut to negative on 600 mln usd bond issue - Moody's

2007-11-16T21:24:00.000+08:00

16 Nov 2007

MUMBAI (Thomson Financial) - Moody's Investors Services revised the outlook of IOI Corp Berhad's 'A3' foreign currency issuer and bond ratings to negative from stable, after the company said it plans to issue 600 mln usd of exchangeable bonds to fund the expansion of its palm oil downstream operations.'The negative outlook reflects IOI's aggressive debt-funded growth appetite which has raised its financial risk at a time when the palm oil cycle is nearing its peak,' Moody's said, adding that 'the large capital distribution in August 2007 and the proposed exchangeable bonds issuance will weaken IOI's financial profile by reducing its buffer against down-cycles.'

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IOI Corp net profit surges 76.6%

2007-11-16T17:56:00.000+08:00

16 November 2007

by Lim Shie-Lynn

KUALA LUMPUR: IOI Corporation Bhd net profit jumped 76% to RM451.52 million for the first quarter (1Q) ended Sept 30, 2007, boosted by record high crude palm oil (CPO) prices and higher sales from properties.

It announced yesterday that revenue rose 64% to RM3.12 billion from RM1.90 billion a year ago, due to better performances for its major business segments. Earnings per share rose to 7.37 sen from 4.22 sen a year earlier.

The earnings, on an annualised basis, at RM1.80 billion was slightly below Reuters’ consensus estimates of RM1.82 billion for the financial year ended June 30, 2008.

IOI Corp expected its business segments to improve in the current financial year and expected its plantation segment to benefit from higher palm oil prices.

It said three of its core business segments — plantations, manufacturing and property — posted higher profits and achieved an overall net earnings of RM451.5 million for its first quarter for the financial year ended June 30, 2008 (1Q08), up 77% from RM255.7 million a year ago.

“Plantations earnings of RM397.5 million for 1Q08 is 134% higher than 1Q07, which was boosted by significantly higher CPO prices as average CPO prices realised for 1Q08 is RM2,473 per tonne as compared to RM1,483 per tonne for the same quarter last year,” it said.

IOI Corp added that its resource-based manufacturing segment reported an increase in operating profit by 33% to RM122.8 million with profits, and volume growth contribution by its wholly owned unit Pan Century Group.

Its property segment’s 1Q08 performance was driven mainly by higher demand for commercial and high-end residential properties with an increase of 37% in operating profits to RM109.7 million from RM80.1 million a year ago.

Meanwhile, IOI Properties Bhd’s first quarter net profit increased 44.3% to RM80.11 million from RM55.53 million, buoyed by higher demand for commercial and high-end residential properties.

The property arm of IOI Corporation Bhd saw its revenue jump to RM205.48 million from RM135.6 million a year ago. Operating profit from property development rose 40.5% to RM89.1 million from RM63.4 million a year earlier.

EPS was 24.64 sen a share from 17.10 sen a year ago.

IOI Corp also announced that it had proposed its unit, IOI Resources (L) Bhd issued up to US$600 million (more than RM2 billion) nominal value five- year unsecured guaranteed third exchangeable bonds.

The bonds, exchangeable into new IOI shares, would be issued and offered outside Malaysia. The gross proceeds would be used to fund capital expenditure, investment/acquisition opportunities, working capital as well as to defray the estimated expenses of the proposed issue.

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Malaysia's IOI Corp Reports 85 PCT Jump in Q1 Pre-Tax Profit

2007-11-16T08:36:00.001+08:00

15 Nov 2007

KUALA LUMPUR, Nov 15 Asia Pulse - IOI Corporation Berhad (KLSE:1961) has booked pre-tax profit of RM628.3 million (US$187.5 million) for the first quarter of the 2008 financial year, an increase of 85 per cent from RM338.7 million a year earlier due to better performance of all major business segments.

Group revenue for the three months ended 30 Sept 2007 surged 64 per cent on-year to RM628.251 million as the business segments reported increases in revenue as a result of higher palm oil prices, increased volume for resource-based manufacturing as well as higher sales of properties.

Earnings per share climbed to 7.37 sen from 4.22 sen last year.

In a filing to Bursa Malaysia on Nov 15, IOI Corp said plantation earnings of RM397.5 million was 134 per cent higher than that of last year, boosted by significantly higher crude palm oil (CPO) prices.

Average CPO prices realised for the current quarter was RM2,473 per MT as compared to RM1,483 per MT for the same quarter last year.

The resource-based manufacturing segment reported a 33 per cent increase in operating profit to RM122.8 million with the inclusion of profit from Pan Century Group as well as volume growth.

It said the property segment continued to perform well with a 37 per cent jump in operating profit to RM109.7 million from RM80.1 million previously, driven mainly by higher demand for commercial and high-end residential properties.

Overall, the group achieved net earnings of RM451.5 million for the current quarter, a 77 per cent increase over the RM255.7 million recorded for the previous corresponding quarter.

It said the percentage increase of the group's net earnings level is lower than the percentage increase of the group's pre-tax level due mainly to higher tax expense as a result of the expiry of certain tax incentives granted by the tax authority at the end of FY 2007.

Barring unforeseen circumstances, IOI Corp expects all business segments to further improve in performance for the financial year ending 30 June 2008.

"The plantation segment in particular, is expected to benefit from higher trending palm oil prices," it said

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IOI shoots up from zero base to giant player

2007-11-02T11:01:00.000+08:00

16 April 2007

STORIES BY HANIM ADNAN

In the third article of our monthly series on growth of large companies, we focus on IOI, which has evolved from a home-grown plantation player to be one of the world's largest integrated oil palm players.

PLANTATION giant IOI Corp Bhd has had an outstanding achievement as one of the world's largest integrated palm oil producers, with impressive growth in upstream and downstream operations, particularly over the past five years.

The group is reputed to be one of the best-managed and efficient palm oil producers, and IOI is also among the plantation stocks with the largest market capitalisation on Bursa Malaysia.

Starting from zero base, the IOI group's business empire was steadily steered by its executive chairman Tan Sri Lee Shin Cheng through a series of plantation expansion and strategic mergers and acquisitions (M&As) both in Malaysia and overseas.

Tan Sri Lee Shin Cheng (right) and Datuk Lee Yeow Chor

This led to the formation of the group's solid core businesses, namely plantation, oleochemicals, speciality oils and fats, and leisure.

Lee, 67, started out as a field supervisor in the plantation industry. He is one of Malaysia's nine billionaires, who recently made it to the famous Forbes list.

This savvy planter is often seen by his plantation workers talking to oil palm trees in Tamil during his regular visits to the group's sprawling 144,055ha plantations nationwide. He also carries a walking stick to ward off snakes in the plantation site.

Industry observers believe that Lee's acquisition of 27,880ha from Dunlop Estates Bhd in 1990, which included 13 estates, two mills, two factories and a research station, were probably the IOI group's most strategic thrust into oil palm plantations.

Prior to the Dunlop Estate plantations acquisition, Lee was also busy acquiring other smaller pockets of plantations in Peninsular Malaysia and Sabah.

Historically, the beginnings of many present-day plantation companies in Malaysia were seen in the late 19th century and early 20th century. Among the companies, which could trace their roots back to the colonial era are Sime Darby Bhd (established in 1910) and Kumpulan Guthrie Bhd (1821).

Golden Hope Plantations Bhd had its beginnings as Harrisons & Crossfield Plc, which started as a tea and coffee trading company in 1844, and was managing agents for Britain-based domiciled plantation companies from the early 1900s until the transfer of ownership in 1982. Even Kuala Lumpur Kepong Bhd started as a Britain-based domiciled company in 1906.

It was only in 1970s that home-grown companies like IOI Corp, Asiatic Development Bhd, Austral Enterprises Bhd, Hap Seng Consolidated Bhd, PPB Oil Palm Bhd, Tradewinds (M) Bhd and IJM Plantations Sdn Bhd entered the plantation industry scene.

Between 1990 and 2000, it was obvious that the IOI group's focus was on the home front in land bank expansion for oil palm plantations and properties. At the same time, the group continues to dispose of its non-profitable and non-core units.

The group was one of the first township developers which successfully converted its plantation lands nearer to the city to create townships like its flagship Bandar Puteri in Puchong, Selangor.

It was in early 2000 when the IOI group started to prove its mettle as a serious downstream player by making strategic downstream investments in oleochemicals, and speciality oils and fats businesses.

In 2001, it acquired Palmco Holdings Bhd, which was later renamed as IOI Oleochemicals Bhd after a major corporate tussle with Sime Darby Bhd.

To further add value to the group's downstream operations, IOI Corp goes cross-border by acquiring a 100% stake in Loders Croklaan B.V. and its related businesses in the United States, Canada and Egypt from Unilever Group for a total cash consideration of 217mil euros or RM813mil in 2002.

The Loders Croklaan purchase has secured IOI Corp's position as a global integrated palm oil player with an immediate market access overseas.

Lee was quoted as saying: “These acquisitions (Palmco and Loders Croklaan) will enable IOI to evolve with the global market and provide the basis for continued growth to benefit our shareholders.”

He said the acquisitions had subtly but significantly provided the strategic edge for the group's plantation business as well as new applications, new geographical markets and value add for the group's palm oil-based products.

In March last year, the group made another bold decision to take IOI Oleochemical private and de-list it from Bursa Malaysia. It also acquired India-based Aditya Birla's edible oil and oleochemical units in Johor in September, which made IOI the world's largest oleochemicals group.

Given its hefty war chest of RM2.2bil, a market observer said, “it will not be surprising if the IOI group were to go for another round of M&As spree this year.”

“The ultimate question that comes to mind will be whether the group will finally succumb to the lure of investing in oil palm plantations in Indonesia similar to the earlier moves made by local plantation giants like Guthrie, KL Kepong and PPB Oil Palms.

Recently, Lee's son Datuk Lee Yeow Chor said the group planned to be a bigger player, starting with plantations. It plans takeovers in the South-East Asian region, preferably of established oil palm plantations.

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Relocated school to receive first batch of students

2007-11-02T10:58:00.001+08:00

2 Nov 2007

Sin Chew Daily reported that SJK (C) Ladang Harcroft, which relocated from Ayer Tawar to Puchong a year ago, will be receiving its first batch of students next year.

The school, which expected to receive about 400 Year One pupils next year, will be opened by Prime Minister Datuk Seri Abdullah Ahmad Badawi on Nov 30, it reported.

In 2004, the MCA had applied to the Government to relocate the school, which was facing closure due to its dwindling student population. The Education Ministry approved the application last year.

Residents in Puchong and nearby areas welcomed the news as they faced difficulty in enrolling their children in Chinese primary schools, the paper reported.

The construction cost is being borne by the IOI group, whose executive chairman Tan Sri Lee Shin Cheng went to check on the work progress on Wednesday.

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Forget about TMT stocks, here come the Replacements

2007-10-31T17:14:00.000+08:00

For a very long time, foreign investors were fed with the limited choice of TMT whenever stocks investing are concerned in Malaysia. The abbreviation of TMT means Telekom, Maybank and Tenaga. The best of practice for foreign fund managers then was you must invest in these three heavyweight stocks since they constituted the biggest percentage in terms of Kuala Lumpur Composite Index (KLCI). And when these three musketeers move; the KLCI move. TMT was like the Great Wall of China and you can’t and shouldn’t claim to have been to China if you haven’t visited the Great Wall.

In layman term, it’s quite easy to justify TMT as the leader in the stock exchange. Telekom Malaysia Berhad (KLSE: TM, stock-code 4863) was the biggest and the only player who monopolized the telecommunication sector. Before the emerging of mobile or cell phones, the land-lines were the cash-cow of Telekom. Telekom ruled the land of the nation's telecommunication.

Malayan Banking Berhad (KLSE: MAYBANK, stock-code 1155) being the largest bank with the most number of branches throughout the country is synonym with national bank status of a nation. With limited and near to impossible for other banks to expand their branches, Maybank monopolizes the domestic market. Tenaga Nasional Berhad (KLSE: TENAGA, stock-code 5347) is the only electricity provider and the monopoly is obvious in the energy sector.

The latest report from theStar which picked the source from Bloomberg shows that foreign investors are slowly shifting the decades old choice from TMT to new candidates. The catalyst was indeed the surging prices in palm-oil. IOI Corporation Berhad (KLSE: IOICORP, stock-code 1961) appears to have beaten all the TMT candidates when its market capitalization has ballooned to RM47 billion compared with Maybank’s RM43.2 billion and TNB’s RM40 billion. Public Bank Berhad (KLSE: PBBANK, stock-code 1295) further put the TMT to shame when the company took the fourth place with market capitalization of RM39 billion.

IOI Corp which is headed by its founder Tan Sri Lee Shin Cheng has a weighting of 6.24 percent on the benchmark KLCI should thank global palm-oil prices for the wealth created. On the other hand the Malaysian version of Warren Buffett, Public Bank founder Tan Sri Teh Hong Piow, has shown that good management and the practice of meritocracy in running the banking operation will ultimately win the hearts of investors. Of course his latest expansion to China contributes to the soaring stock price of his baby Public Bank.

So, you’ve seen two examples of great companies run by great leaders. Why the TMT suffered and its performance deterioted over the time in spite of sitting on the throne of monopoly? Remember Malaysian Airline System Berhad (KLSE: MAS, stock-code 3786)? The company that despite the monopoly accorded had made multiple quarters of losses before the bleeding stopped recently. So what are the similiarity with TMT and MAS? All of them are GLC (government-link-companies). All of them have so-called social responsibility to put on gigantic number of employees on its payroll, regardless of the staffs’ productivity and performance. All of them are protected, one way or another by the government. And the moment the profits stop growing or in the red, all of them will scream and cry demanding price hike. . If only doing business and generating profits are so damn simple and easy.

If the other banks are given the liberty of setting up more branches, Maybank would surely disappear from the banking map. Take for example a real case of a customer who reported that his Maybank credit card was used for unauthorized transactions worth hundreds of dollars. Long story short, the customer was asked to pay the “unauthorized transaction” nevertheless because Maybank couldn’t trace the culprit despite numerous appeals. Out of frustration, the customer paid and cancelled all business relationship with the bank.

Now the same situation happened to another customer whereby his credit card was being cloned for various transactions from multiple petrol stations. This time the bank’s (Citibank) system somehow detected abnormal transactions within one of its customers and alerted the respective officers. The customer service called the customer to verify the transaction and advised the customer to destroy and wait for the new credit card to be issued thereafter. The difference is this "lucky" customer was never asked to pay the unauthorized transactions, which is the only right thing to do, not that the customer purposely ask for his card to be cloned in the first place. So you’ve a frustrated and a happy (loyal) customer based on same scenario but from different banking institution.

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IOI Corp is largest KLCI component stock

2007-10-31T17:12:00.000+08:00

31 October 2007

Its share price has surged and market cap is at RM47bil

By KATHY FONG

PETALING JAYA: The surge in IOI Corp Bhd's share price has made the plantation group the largest component stock on the KL Composite Index (KLCI) in terms of weighting, topping the usual names Malayan Banking Group Bhd (Maybank), Tenaga Nasional Bhd (TNB) and Telekom Malaysia Bhd (TM).

According to Bloomberg, IOI Corp’s weighting on the benchmark KLCI was 6.24% based on yesterday’s closing of RM7.90, followed by Maybank 5.74% and TNB 5.35%.

IOI Corp’s market capitalisation (cap) has ballooned to RM47bil compared with Maybank’s RM43.2bil and TNB’s RM40bil.

Public Bank Bhd’s weighting on the KLCI was also gaining amid the rise of its share price to a record high of RM11.10 yesterday. The bank was the fourth biggest KLCI component stock with market cap of RM39bil.

Investment analysts said the change on the weighting of the component stocks (in terms of their market cap) indicated the investing interest in Bursa Malaysia.

“The market seems to be getting more efficient now. Companies with good management and earnings prospects are given premium,” said the head of equity research of a foreign investment bank.

“So, TMT may not always be the choice of stocks for investors who want have index exposure now,” he quipped.

TMT, which stands for TM, Maybank and TNB, once regarded the “must have” component stocks for fund managers who needed to benchmark their portfolio performance to the KLCI’s movement.

IOI Corp’s share price has been surging in tandem with rising crude palm oil prices that rose above RM2,900 per tonne.

The stock was seen as one of the most efficient plantation groups in Malaysia due to the hands-on management led by founder Tan Sri Lee Shin Cheng, analysts said.

KL Kepong was also catching up with a weighting of 2.18% as its share price continued to climb.

Sime Darby Bhd, which will be relisted under the name Synergy Drive Bhd next month after the merger with five other companies, was the second biggest plantation counter based on the last traded price of RM11.20 on Oct 17. The conglomerate’s weighting was at 3.75%.

Investment analysts observed that many government-linked companies (GLCs), except for Bumiputra-Commerce Holdings Bhd, were mostly lagging behind the current market rally.

Ironically, the share price of Maybank and TNB had fallen below last year’s closings although the KLCI had been breaking new records this year. TNB slid nearly 15% and Maybank fell 6% year-to-date versus the 29% rise on the KLCI.

The better performer among GLCs was Bumiputra-Commerce with a hefty gain of 44.5% since the beginning of the year.

“The share price performance may be a reflection on how investors think of the GLC revamp,” said an analyst.

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IOI Corp may acquire Unico-Desa stake

2007-10-31T09:16:00.000+08:00

30 Oct 2007

KUALA LUMPUR: IOI Corporation Bhd will consider acquiring a stake in Unico-Desa Plantations Bhd, which is embroiled in a dispute over Unico Holdings Bhd¡¦s 29.3% equity interest in the plantation company, as part of its plan to grow its plantation business.

IOI Corp¡¦s group executive chairman Tan Sri Lee Shin Cheng said it would make such consideration should the opportunity arise and any such acquisition would have to be a controlling stake.

Unico board members and its ousted director Tan Kai Hee had engaged in a media war with the latter opposing the company¡¦s plan to undertake a capital reduction exercise, followed by the distribution of Unico-Desa shares to Unico¡¦s 22,000-odd shareholders.

According to a report by Reuters yesterday, IOI Corp is seeking its board¡¦s approval to buy a substantial stake in Unico-Desa.

While not ruling out a move to buy into Unico-Desa, Lee said yesterday that IOI Corp was looking at an acquisition of a plantation company which is bigger than Unico-Desa.

¡§Unico-Desa is a comparably small plantation company. We are looking into something even bigger than this,¡¨ he said, adding that IOI Corp is in talks with several parties on its plan to expand its plantation business and expects to complete at least one acquisition of a private plantation company by end FY08. The acquisition is likely to be a local plantation firm.

Speaking to reporters after his company¡¦s AGM and EGM yesterday, Lee said the acquisitions were part of its two-pronged growth strategy, and IOI Corp would continue to plant from undeveloped land.

To date, he said the group had a total of 155,000ha of planted land bank excluding another 70,000ha that would come in upon the completion of a sales and purchase agreement in Indonesia, which expected in a few days.

He said it expected some immediate contributions from its matured plantations in Indonesia, and this would gradually increase over the next three years.

High crude palm oil (CPO) prices had boosted the group¡¦s net profit in its financial year ended June 30, 2007, and Lee expected sustained growth and profitability in FY08.

Lee said the group had committed to selling CPO at an average price of RM2,500 per tonne in its first half of the financial year ending Dec 31, 2008, from an average selling price of RM1,700 per MT in FY07.

¡§This year was a record, next year will be another record driven by high crude palm oil (CPO) prices, the uptrend in the property market and also our manufacturing ¡X refineries, oleochemicals, specialty fats and oil ¡X are doing extremely well,¡¨ Lee said.

On its property business, he said IOI Corp had at least 10 residential and commercial projects under construction in FY08 with a gross development value (GDV) of RM1 billion including a residential project in Jalan Ampang, Kuala Lumpur.

The group would also begin construction on a residential project on Sentosa Island in Singapore by the beginning of 2008 with a GDV of S$1 billion (RM2.3 billion) he said.

Lee said IOI Corp¡¦s total land bank had a GDV of at least RM5 billion, with between 2,428ha and 2,832ha of undeveloped land bank, excluding those in Singapore. He said the group would continue to explore opportunities in the property sector overseas from time to time.

On the group¡¦s downstream resource-based manufacturing business, he said the group was looking to expand the 800,000 tonne capacity of its refinery in Rotterdam, Netherlands. Currently IOI Corp¡¦s four refineries have a refining capacity of three million tonnes, he said.

The group had also postponed its venture into the bio diesel industry until further study, preferring to focus on its palm oil business which enjoyed robust demand, he added.

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IOI takes top spot on M'sian bourse

2007-10-31T09:13:00.000+08:00

Surging crude palm oil prices have propelled its rise

By PAULINE NG
IN KUALA LUMPUR PROPELLED by surging crude palm oil prices and expectations it would surpass last year's record profits, IOI Corporation yesterday leapt to the top spot on the local bourse, pushing Malayan Banking (Maybank), to second position.

Pushing ahead: High prices for crude palm oil, currently around RM2,900 per tonne, have helped IOI make gains of over 50 per cent in the space of three months At yesterday's close of RM7.90 after it gained 40 sen, the plantations giant's market capitalisation of RM47.4 billion (S$20.6 billion) established it as the country's most valuable listed entity. In comparison, Maybank is currently worth about RM43 billion.

IOI Corp's market rise is remarkable, given the top-most positions are nearly always occupied by government-linked entities.

Still, Malaysia's most efficient plantation player is likely to hang on to the top honour for a month - or at least until Synergy Drive comes into being. The government-linked plantations corporation combining three former plantations groups - Sime Darby, Kumpulan Guthrie and Golden Hope - is scheduled to list on Bursa Malaysia's main board at the end of November. Analysts have estimated that Synergy's value upon listing could exceed RM70 billion, which would make it the indisputable exchange leader.

For now the limelight is on IOI Corp, which despite its gains of over 50 per cent in the space of thee months - some half of it in the past month - is still a compelling pull for some.

High prices for crude palm oil - currently around RM2,900 per tonne - have helped, and IOI Corp executive chairman Lee Shin Cheng has indicated that analysts' consensus estimates of a RM1.8 billion net profit for the fiscal year ending in June 2008 will be surpassed.

Last year, IOI's then record profit of nearly RM1.5 billion was achieved at a time of lower prices for crude palm oil, know as CPO. Speaking after the company's annual general meeting on Monday, Mr Lee said CPO prices could well reach RM3,000 per tonne soon.

But stockbroking firms such as Hwang-DBSVickers are more excited about its plans to acquire other plantation companies as potential acquisitions could be 'value accretive' to the stock. Others believe its shares are already fairly valued.

'While sector fundamentals remain positive and we expect CPO prices to stay firm, upside from here looks increasingly less significant, and the impact will also be muted by the expected stronger ringgit,' JP Morgan's Simone Yeoh said in a client note.

Meanwhile, companies such as Unico Desa Plantations are riding on IOI Corp's professed interest in them. Unico is currently embroiled in a shareholder tussle, but its shares jumped 22 sen to RM1.22 after Mr Lee said IOI Corp was contemplating taking over the company if the terms were right.

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Offer to sell 57% in Unico-Desa

2007-10-30T11:39:00.000+08:00

30 Oct 2007

PETALING JAYA: Unico-Desa Plantations Bhd's major shareholders have offered to sell a 57% stake in the oil palm plantation group.

Under listing requirements, the disposal would trigger a mandatory general offer for all shares in Unico-Desa should a single party take up the entire chunk of shares.

Consequently, merchant bankers said there was a likelihood of Unico-Desa being taken private in such an event.

The 57% stake are from three parties – Unico Holdings Bhd, Teoh Hock Chai and Dr Yeong Yue Chai. Teoh and Yeong are directors of Unico Holdings as well as Unico-Desa.

News of Unico-Desa shares being offered for sale en bloc appeared to have given the company's share price a lift yesterday. The counter jumped to a record high of 96.5 sen before finishing up 2.5 sen at 94 sen. The stock has gained 40.1 sen, or 74%, year-to-date. The company's market capitalisation stood at about RM830mil yesterday.

IOI Corp Bhd executive chairman Tan Sri Lee Shin Cheng said the group would consider the Unico-Desa offer and also look for bigger plantation companies to acquire.

CIMB Research said that with Unico-Desa's oil palm plantations located close to the estates of other bigger players such as IOI Corp and Asiatic Development Bhd, the big planters would be keen to acquire the majority stake in Unico-Desa “if the price is right''.

Unico-Desa has been hogging the limelight in the last two months over a dispute involving its parent company Unico Holdings' 29.3% shareholding in the oil palm plantation group.

The bone of contention is opposition by former director Tan Kai Hee, who was not re-elected at the AGM last month, to the company's plan to undertake a capital reduction exercise, which would be followed by the distribution of Unico-Desa shares to some 22,200 Unico shareholders.

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IOI sees record profit

2007-10-30T11:38:00.001+08:00

30 Oct 2007

By KATHY FONG

PUTRAJAYA: IOI Corp Bhd, which is in the midst of finalising an asset acquisition, expects to post another record net profit for the current financial year ending June 30, 2008 (FY08) of more than RM1.8bil, said executive chairman Tan Sri Lee Shin Cheng.

Lee said it had sold forward half of the crop production volume at the average price of RM2,500 per tonne, compared with RM1,700 per tonne in FY07.

“The RM800 jump in CPO (crude palm oil) price per tonne should be an indicator that the group would not only sustain its earnings growth, but also improve further,” he said.

“FY07 was a record (profit) year. This financial year (FY08) will be another record,'' Lee added.

IOI Corp posted a net profit of RM1.48bil in FY07, up 79% from RM829mil in FY06. Revenue grew to RM8.95bil from RM6.1bil previously. The group's crop production for FY07 was 3.69 million tonnes.

IOI Propeties Chairman Tan Sri Lee reply to media after chaired AGM and EGM in Putrajaya on Monday

Lee said it would not be a problem for CPO price to reach RM3,000 a tonne.

“Whatever goes up must come down,” Lee said when asked if the uptrend in CPO price was sustainable at current levels.

He expected the correction of CPO prices would not be too drastic in the event of one due to the growing demand for palm-based products worldwide.

“CPO is no longer a commodity. It is an industrial product. Exports to the US have doubled because of the trans fatty acid issue,” he said.

Bullish CPO futures which surged to a record high of RM2,910 per tonne yesterday gave IOI Corp share price a timely lift to boost the stock to a historical high of RM7.50, a rise of 35 sen.

On the its expansion plans, Lee said the oil palm plantation group was currently in talks to acquire a plantation company. “It looks like it (the acquisition) will be completed in FY08,” he told a press conference after the AGMs of IOI Corp Bhd and IOI Properties Bhd yesterday.

He also said the group would consider the 57% stake in Unico-Desa Plantations Bhd offered for sale by Unico Holdings Bhd and two major shareholders.

“I would get my board members to look into Unico-Desa,” Lee said, but stressed that IOI Corp would not launch any “unfriendly takeover.”

Given an annual cash flow of RM2bil, Lee said financing was not an issue for the IOI group.

“We've got the appetite (for asset acquisition). We are looking for bigger companies than Unico-Desa,” he added.

On the group's property division, Lee said IOI Property wanted to build more commercial properties to pave the way for it to set up a real estate investment trust (REIT).

“We only have about one million sq ft of rentable area in IOI Mall, which is too little. We intend to raise it by 30% to 40% before we could set up a REIT,” he added.

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Lessons from IOI for Synergy Drive

2007-10-29T08:46:00.000+08:00

Published October 29, 2007

MALAYSIA INSIGHT

The corporation's solid management is worthy of emulation by the new behemoth

By S JAYASANKARAN
KL CORRESPONDENT

LAST Friday, IOI Corporation - a plantations, oleochemicals and property conglomerate - became the second largest company on Bursa Malaysia (BM), the Kuala Lumpur stock exchange, with a market capitalisation of RM41.4 billion (S$18 billion).

Malayan Banking (Maybank) remains tops at RM44 billion, while IOI Corp pushed state-owned utility Tenaga National to third spot at RM40.3 billion. The rest of Malaysia's corporate grandees are familiar names: Public Bank (RM38 billion), Malaysian International Shipping Corporation (RM37.1 billion), Bumiputra-Commerce Holdings (RM36.4 billion) and Telekom Malaysia (RM35 billion).

For IOI Corp to come this far is a tremendous feat; it was nowhere near such exalted heights, say, twelve years ago.

How it did so is what a soon-to-be-created entity called Synergy Drive might want to research.

To be sure, high palm oil prices was the immediate trigger that pushed IOI Corp shares up last Friday: the benchmark crude palm oil futures contract hit RM2,776 a tonne and seems poised to test the record RM2,800 mark soon.

But more importantly, IOI is superbly managed. On almost all counts, it boasts better efficiencies and superior returns on its assets - whether in plantations, property, oleochemicals manufacturing, even hotel management. Stripped of the rhetoric, it has what securities house CLSA calls 'a solid management track record'.

The company is now the world's largest producer of oleochemicals from palm oil - courtesy of acquisitions of Dutch and Indian refineries this year and last - and made a net profit of RM1.48 billion on RM8 billion of sales for its 2007 financial year against consensus earnings forecasts of RM1.3 billion odd. And it remains a top pick for institutional investors.

Some time in November, Synergy Drive will be listed. It represents a work in progress that had its seeds in a plan presented to Prime Minister Abdullah Ahmad Badawi by businessman Chua Ma Yu in 2003. His plan was simple: take six plantation firms owned by the state agency and merge them to create the world's largest listed oil palm company with 5 per cent of global palm oil supply, over 600,000 hectares of land and, conceivably, Malaysia's biggest firm in terms of value. Investment bank CIMB took Mr Chua's idea and ran with the ball, promoting the merger last year and the result next month will be Synergy Drive, which is likely to be renamed Sime Darby.

Synergy is likely to become the biggest firm in the country upon listing: its sheer size and euphoria over high palm oil prices will ensure that outcome. Indeed, preliminary estimates of Synergy's market capitalisation are anything between RM60 billion and RM70 billion. But can it stay that way?

Given the cyclical nature of the oil palm business, that is unlikely. Even so, Synergy Drive can do a whole lot more. The whole idea behind the merger plan was to increase productivity in Malaysia's palm oil industry, to increase the country's competitiveness to face challenges thrown up by new Asian investment magnets, particularly China and India.

For the longest time, the companies that make up Synergy - from Sime Darby to Golden Hope - have consistently underperformed companies like IOI Corporation. On every conceivable performance index - from yield per hectare to return on assets - the state-owned plantation companies have lost out to IOI.

If they could get even close, the results would be astonishing. Here's one statistic to chew on: Last year, IOI produced 806,627 tonnes of crude palm oil while Synergy's combined output was 2.1 million tonnes. If it does get its act together a la IOI, its production will be a whole lot higher. And Malaysia would truly have a world-class brand.

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Mild boost only from IOI’s Indonesian venture

2007-09-20T18:12:00.001+08:00

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20 Sept 2007

IOI Corporation Bhd’s acquisition of several Indonesia-based oil palm plantation firms for nearly US$90 million (RM315 million), would boost its bottomline by only RM3.3 million to RM10.5 million per annum over the next three years, said Aseambankers Equity Research.

“Nevertheless, we raised our FY08 and F09 earnings forecast by 4.7% and 3.1% respectively to reflect the higher average CPO price assumption for FY08 and FY09,” it said.

It forecast CPO prices to rise from RM2,250 per tonne to RM2,350 in FY08 and for FY09, it expected the price to increase from RM2,150 to RM2,200 per tonne, respectively.

Aseambankers Research said it maintained its “fully valued” call, but raised its target price to RM4.80 (previously RM4.70) based on 18 times FY09 fully-diluted earnings per share (EPS).

On Tuesday, IOI Corp said that it was acquiring several Indonesia-based oil palm plantation companies as part of the group’s strategy to grow its core palm oil business under appropriate conditions.

The company had inked an agreement to acquire a 33% stake in PT Bumitama Gunajaya Agro which has a total planted area of 35,300ha and unplanted land of 64,500ha, together with three palm oil mills.

It also signed an agreement to acquire a 67% stake in several companies with total land available for planting of 52,700ha (significantly reduced from the previously reported 128,000ha as the remaining land was unsuitable for planting after due diligence).

The acquisition will be funded by existing cash and borrowings, and targeted for completion by end-2007.

However, Aseambankers Research said that of the 68,000ha of effective interest by IOI Corp, 11,630ha had been planted of which only 4,648ha are young mature (against IOI Corp’s existing 140,000ha mature plantation; minimal).

It estimated the Indonesian venture is unlikely to make any meaningful contribution to IOI at least over the next four years.

“We understand that IOI Corp has targeted to open 10,000ha of new land per annum at US$3,000 development cost over a three year period. But judging from IOI Corp’s lack of local experience, we believe the actual planting in the initial years could be significantly lower based on experiences shared by other Malaysian planters,” it said.

IOI Corp buys oil palm firms for RM289m

2007-09-20T12:58:00.000+08:00

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19 Sept 2007

KUALA LUMPUR: IOI Corporation Bhd (IOI Corp) is acquiring several Indonesia-based oil palm plantation companies for a total of nearly US$90 million (RM289 million) as part of the group’s strategy to grow its core palm oil business under appropriate conditions.

It had entered into agreements to acquire Singapore-based investment holding companies Lynwood Capital Resources Pte Ltd and Oakridge Investments Pte Ltd from Ivygate International Ltd and Red Canyon Enterprise Ltd, and Oleander Capital Resources Pte Ltd from Goldharvest Group Holdings Ltd, for US$62.63 million and US$20.3 million respectively.

The deal will also see IOI Corp owning 33% of PT Bumitama Gunajaya Agro (BGA), and 67% each in PT Agro Mandiri Sejahtera, PT Ketapang Sawit Lestari, PT Bumi Sawit Sejahtera, PT Kalimantan Prima Agro Mandiri, PT Berkat Nabati Sejahtera and PT Sukeses Karya Sawit. Under the agreement, IOI Corp will repay US$9.6 million on behalf of BGA, owing to Ivygate and Red Canyon.

The proposed acquisition, which will be completed in the last quarter of 2007, will be funded by existing cash reserves and borrowings.

In a statement released yesterday, it said BGA has a total planted area of about 35,300ha and unplanted land of about 64,500ha, as well as three oil mills. It also oversees a plasma scheme of about 21,800ha.

The second deal would provide a 52,700ha piece of land for planting excluding areas allocated for plasma schemes.

It said IOI Corp would provide plantation management, agronomy and related technical support services to achieve better efficiency and cost effectiveness, while the remaining shareholders would be responsible for human resource and regulatory matters, which included the procurement of issuance of relevant land titles.

It said expanding the plantation business in the country had became more difficult due to scarcity of plantation land, adding that Indonesia’s proximity to the country was ideal for the group’s plantation expansion overseas.

Values boom in parts of corridor

2007-09-13T11:55:00.000+08:00

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17 July 2006

In Pusat Bandar Puchong, the prices of double-storey terraced houses have appreciated substantially since the project kicked off in 1994. The smallest 18’ x 65’ units which were priced at RM117,000 have appreciated to RM220,000 today while the 20’ x 70’ units are changing hands for RM300,000 from the launch price of RM150,000.

Land value, especially those surrounding Putrajaya, was reported to have appreciated from RM1.50 psf before the development of Putrajaya to RM50 psf now.

According to Putrajaya Holdings Sdn Bhd chief executive officer Azlan Abdul Karim, Putrajaya and Cyberjaya offered the most growth potential. Putrajaya in particular, has invested in excellent infrastructure, amenities and architecture. This will pay off in the future as the city matures.

“In terms of concept planning, Putrajaya is a showcase city and the architectural and planning efforts made throughout the city ensures that it will be a tourist attraction to rival international cities in years to come,” Azlan told StarBiz.

IOI Properties Bhd director Datuk David Tan said with the growing affluence of the population in the corridor, the types and prices of properties being developed here have reached the levels of those in established neighbourhoods in Petaling Jaya and Kuala Lumpur.

“With these, developers are compelled to meet expectations on quality of workmanship and customer service,” he added.

IOI is one of the property companies that had made it big in Puchong in the 1990s through its 930-acre Bandar Puchong Jaya followed by the 930-acre Bandar Puteri Puchong. Tan said the company still believed in the corridor’s potential and had lined up a new township on 550 acres at the entrance to Cyberjaya.

“This new township has been carefully planned taking into consideration the needs of house buyers. We have gained valuable feedback from our buyers and have new concepts and ideas on housing and environmental designs that will fulfil their more discerning expectations,” he added.

IOI’s future launches in Bandar Puteri Puchong would include higher end bungalows and corporate offices fronting the Damansara Puchong Expressway.

This is a big improvement from its early days as a pioneer developer in Puchong where the initial phases comprised modestly priced terrace houses “to attract buyers to the region.” To enhance the image of the once-remote region, the company ploughed in much investment in infrastructure, including the district police station and quarters, community hall, main roads, flyovers and the IOI Mall. As the company's success grew, its subsequent developments catered for a much wider catchment market.

Another early developer in Puchong, SP Setia Bhd also went on to become a big success in the property business.

Despite having moved on to the western growth corridor as its two flagship developments, Setia Alam and Setia Eco Park, are in Shah Alam, group managing director and chief executive officer Tan Sri Liew Kee Sin said the company was thankful for the opportunity to develop Pusat Bandar Puchong as it turned out to be a signature showcase of an SP Setia development.

“The mature township on 700 acres has all the hallmarks of innovative designs, quality workmanship, extensive landscaping and well-planned masterplan.

“Over the 10 years of developing Pusat Bandar Puchong, we have reinforced our reputation as a quality developer. Pusat Bandar Puchong is today regarded as one of the greenest and most well maintained townships in the vicinity.”

Forbes Asia: Pumping Palm Oil

2007-09-07T11:27:00.001+08:00

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On The Cover/Top Stories
Pumping Palm Oil
Ioannis Gatsiounis 06.18.07

IOI's Lee Shin Cheng is a master at squeezing every drop from his vast plantations. The craze for biofuels is driving up prices, but caution is the watchword at this Malaysian company.

It's very good to be the world's largest palm oil producer--especially when a giant economy such as Europe's decides it must combat global warming and your product is signed up for the fight. Palm oil has long been used in food and cosmetics, but if they want to turn it into biodiesel for cars and buses, that's fine, too. So palm oil prices are soaring, and so are profits at Malaysia's IOI Corp. The share price is also on a tear, by the way.

But IOI, started in 1969 as a distributor of industrial gas, didn't get to be a $2.5 billion company by jumping on bandwagons. Four years after palm oil became a biofuel of choice for trendy European drivers going green, IOI hasn't added one acre to its plantations. It doesn't rule out making an acquisition to boost its land holdings, though. "If the price is reasonable, we're always open to it," says IOI Group Executive Chairman Lee Shin Cheng, not sounding like a man in hurry. "When the time comes, we'll be there."

And IOI has only recently gotten a license to build a biodiesel plant in Johor, on the Singapore border, that would produce 200,000 tons a year--hardly a huge amount. It says it may also invest in a second palm oil refinery in the Netherlands. "We're not going be an early bird in biodiesel, just like we weren't with oleochemicals [chemicals derived from fats and oils] and other areas," he says.

Lee's caution may be smart, for already the biodiesel craze is losing steam. The European Union kicked it off in 2003, when it mandated that by 2010, 5.75% of the fuel used for transportation be renewable, rising to 20% by 2020. A victory for the environment quickly turned into a defeat. The order set off an immediate rush to set up new plantations by clearing swaths of Southeast Asian rain forest and draining and burning peat bogs. That unleashed enormous clouds of pollution. The burning peat bogs were responsible for carbon emissions equaling 8% of the world's total, according to a four-year study by Wetlands International and two other Dutch groups. Now the Netherlands has suspended its subsidies for palm oil fuel, and some environmental groups are backing away from it. The country has begun developing a program to certify which biofuels come from sources that are environmentally sound.

Lee doesn't put much stock in the environmental findings, saying they've been cooked up by people pushing other plants, such as rapeseed, corn and soybean, whose oil also can be used for biofuel. But IOI doesn't figure to be affected much by the environmental rethink, anyway. If palm oil prices settle down as biodiesel demand rises less quickly, that's okay with IOI and its strategy of steady, long-term growth. In any event, it prefers to buy established plantations, or brownfields, rather than vacant plots, or greenfields that were recently cleared.

Even without dealing for more land, IOI's business has been booming. Three-month-forward prices for crude palm-oil are hitting alltime highs, rising by a third this year, to $760 a metric ton, after jumping 44% last year. That's propelled IOI's earnings by 67%, to $298 million, for the nine months ended Mar. 31, over the same period a year earlier. Revenue for the period was up 44%, to $1.86 billion. The stock is trading at around $8 a share on the Bursa Malaysia, up from just 45 cents in early 2001. Its performance put it on FORBES' Fab 50 list of the best of Asia-Pacific's large listed companies last year.

Recently IOI hasn't needed to buy land to boost production. It's long been known as one of the best-managed and most efficient producers in Malaysia, famous for squeezing every last drop of palm oil out of its 415,000 acres on 79 estates around the country. The average yield in Malaysia is 1.6 tons an acre, according to the country's Palm Oil Board. IOI, says Lee, is averaging 2.4 and will reach 2.8 in five years. The secret? "Proper planting and fertilizing, and making sure each palm bunch is collected," says Lee, who is 68. "I still walk through the fields to make sure each tree is producing the way it should." That may be an exaggeration, but Michael Greenall, an analyst who follows the palm oil industry for BNP Paribas, says there's something to it. He attributes the productivity to "hands-on management" and the high-yielding trees that IOI planted 10 to 15 years ago. Also, he says, IOI "maintained sound agronomic practices, even after the ringgit" was devalued in the late 1990s.

Whatever IOI can make, the world will take, because palm oil is used in everything from makeup to soap. "Most people don't realize it but from the moment you wake up, you're involved with palm oil," says Lee. He pauses in front of a window in his Putrajaya offices, outside Kuala Lumpur, displaying a Kit Kat bar, a vitamin bottle and a Coffee-Mate packet, processed products that use palm oil. The U.S. consumes some 200,000 tons of palm oil a year--contributing to Malaysia's status as the number two exporter of food ingredients to the U.S. last year, according to an Associated Press tally of U.S. International Trade Commission data--while 3.5 million tons of palm oil, mostly from Indonesia and Malaysia, are sent to Europe. Palm oil produces 70% of IOI Group revenue (most of the rest comes from property development and manufacturing), and IOI accounts for 11% of the world's palm oil exports.

The man atop this palm oil juggernaut grew up northeast of Kuala Lumpur on a rubber plantation, where his father ran a small Chinese food shop. He left school when he was 11 to help support his family, selling ice cream on a bicycle for four years before returning to finish high school. He interviewed with one palm oil plantation for a supervisory job, but wasn't hired because he didn't speak English--important then because Europeans still ran most of the plantations. (Some 20 years later he took over that company; he won't name it.) Instead, at 22 he became a field supervisor at another palm oil company. That is when he says he started to develop his hands-on managerial style and home in on what it took to maximize yields. In those days palm oil was used in detergent as well as for cooking.

By 1982 Lee was in control of a small company and used it to buy a listed gas outfit, Industrial Oxygen Inc. Two years later he set out to create the palm oil industry's blue-chip player. In 1995 he changed the name to IOI and today he and his family--he's married and has six children--own 40%. That's helped make him Malaysia's fourth-richest person; FORBES ASIA puts his net worth at $3.9 billion. His two sons and four daughters all work in the business, with his eldest son, 40-year-old Lee Yeow Chor, serving as an executive director. Is the younger Lee being groomed to take over someday? His father says yes, though retirement isn't on his mind. He says he's still "very strong" and has no idea when he might want to step down.

These days IOI is diversifying into specialty fats and oils and oleochemicals based on palm oil, leaving it less vulnerable to price fluctuations in crude palm oil. It bought two Malaysian companies, Pan Century Edible Oils and Pan Century Oleochemicals, for $120 million in January. The purchases lifted the group's refining capacity by half, to 3 metric tons a year, and made it the world's largest producer of vegetable oil-based fatty acid, with a roughly 10% market share.

But as well positioned as IOI is, challenges loom as the industry's landscape changes. For one thing, the center of gravity is shifting toward Indonesia. Rivals such as Kumpulan Guthrie, Kuala Lumpur Kepong and PPB Oil Palms have made a mad dash into Indonesia to boost their land banks--at a time when land for new plantations in Malaysia, where all of IOI's plantations are located, is scarce. Both countries have a similar number of planted acres, but Indonesia has millions of additional acres cleared for planting, and some analysts predict that it will surpass Malaysia this year.

What's more, IOI's title as the largest palm oil producer is about to be taken away. In January a government-backed company called Synergy Drive agreed to buy Sime Darby, Golden Hope Plantations and Kumpulan Guthrie, creating the biggest palm producer once the deal is finalized, probably in October.

But palm oil is a commodity, so it doesn't much matter whether a rival is bigger. And even without the demand for biodiesel, palm oil prices would keep rising. One factor is a drought on the islands of Sumatra and Kalimantan. Another is an expected switch to palm oil by more consumers as demand for other edible oils outpaces the supply. For now, at least, Lee appears to hold this industry in the palm of his hand.

Asia's Fab 50 Companies - IOI Corp

2007-09-07T11:24:00.000+08:00

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IOI Corp
09.06.07, 6:00 PM ET Industry: Food Drink & Tobacco
Country: Malaysia

Size		Valuation		Performance
Market Value	$8.9 bil	Forward P/E	17	5 yr avg ROC ¹	10%
Sales	$2.5 bil	Price to Sales	3.3	EPS Growth Est ²	27%
		Dividend Yield	1.3%

Malaysia's largest producer of palm oil, a hot commodity in biodiesel circles. Most of the oil is still used in foods and cosmetics—an invisible but highly profitable ingredient. Posted record profits in latest fiscal year. Chairman Lee Shin Cheng isn't planting more acreage, even though palm oil prices have soared in the last two years. (Most new fields involve destruction of rainforest.) Instead, he is increasing yield and investing in downstream projects. Building a biodiesel plant in Johor, on the Singapore border, and buying refining capacity.

IOI makes Forbes Fabulous 50 again

2007-09-07T11:23:00.000+08:00

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7 Sept 2007

Indian companies lead this year’s list

SINGAPORE: IOI Corp Bhd made it to the third annual Forbes Asia Fabulous 50 List for the second year in a row, again becoming the sole Malaysian company to get on the list thus far.

Forbes noted that IOI Corp, Malaysia's largest palm oil producer, posted sales of US$2.518bil and had a market value of US$8.857bil.

The Fabulous 50 List, which appears in the Sept 17 issue of Forbes Asia, covers only companies with revenues or market capitalisation of at least US$5bil, and a five-year record of operating profits and return on equity. Other criteria include long-term profitability, sales and earnings growth, stock price appreciation and projected earnings.

Indian companies led this year's list with 12, followed by Taiwan with 10 and seven companies from China.

“Four of India's information technology outsourcing companies made the cut including the biggest, Tata Consultancy Services that writes software for leading American firms.

“Most of the Indian firms on the list, however, did not have to leave home to find success. With a relatively young population of 1.1 billion, India has its own huge market,” Forbes said in a statement yesterday.

The same could be said of China too as all seven companies featured this year also relied on customers within its border.

As for Taiwan, most of the companies represented are from the island's low-profile technology industry and included Hon Hai Precision Industry, Acer, Compal Electronics and Taiwan Semiconductor Manufacturing.

Forbes said companies on the list were also supplementing organic growth with acquisitions, such as India's Tata Steel, Doosan Infracore of South Korea and Acer.

Several new entries in this year's list included Hong Kong carrier Cathay Pacific Airways, Australian construction firm Leighton Holdings, Japanese computer games maker Nintendo and Singaporean firms Neptune Orient Lines and SembCorp Industries.

Another record year for IOI Corp

2007-08-28T16:15:00.001+08:00

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22 August 2007

It chalks up net profit of RM1.48bil on higher revenue

KUALA LUMPUR: IOI Corp Bhd announced yesterday yet another record profit for its 2007 financial year (FY07), boosted by high crude palm oil prices (CPO) and robust property sales.

The country's top plantation company expects its financial performance in FY08 to be good, and analysts feel the company is well-placed to realise its target should CPO prices continue to hover near record levels.

“IOI only benefited from half a year of high CPO prices and FY08's numbers should be better if palm oil prices remain high and the other divisions of the group such as property and manufacturing deliver,'' an analyst said.

For the year ended June 30, IOI Corp announced a net profit of RM1.48bil, or 24.13 sen a share, compared with RM829mil, or 14.51 sen a share, in FY06.

Revenue, as a result of higher volume in the manufacturing segment and high palm oil prices, jumped 47% to RM8.95bil from RM6.11bil while pre-tax profit rose 73% to RM1.99bil from RM1.15bil.

“All three major business segments achieved record operating profits,'' IOI Corp said in a statement to Bursa Malaysia.

For the fourth quarter, IOI Corp announced a net profit of RM451.7mil, or 7.28 sen a share, against RM211.9mil, or 3.58 sen a share, in the previous corresponding period.

Revenue was RM2.54bil for the fourth quarter compared with RM1.65bil previously.

IOI Corp said plantation earnings in FY07 was 46% better than in FY06 with the CPO price averaging 27% higher at RM1,759 per tonne compared with RM1,386 previously.

Fresh fruit bunches (FFB) production, at 3.69 million tonnes, was about the same level as in FY06 and IOI Corp said its resource-based manufacturing segment achieved a multi-fold increase in operating profit to RM405.4mil.

The company said its property business also achieved record pre-tax profit, which rose 62% to RM598.4mil from RM368.3mil in the previous year.

Profit from property was, however, boosted by a gain of RM160.7mil from the revaluation of investment properties as required under accounting standards.

For its fourth quarter, IOI Corp said the 8% increase in operating profit in its plantation segment was proportionately lower than the 16% increase in CPO price from the third quarter. That was because of the newly imposed cooking oil cess as well as higher fertiliser inputs in the fourth quarter.

“Resource-based manufacturing showed lower contribution for the fourth quarter because of volatile raw material prices,'' IOI Corp said.

While cost pressures may have risen, analysts feel IOI Corp is in a position to chalk up better profit in FY08, given the higher CPO prices seen now at over RM2,300 to RM2,400 per tonne compared with the average price in the fourth quarter.

“If the momentum is maintained, we can expect higher CPO prices in 2008,'' an analyst said.

How much higher would depend on the level of activity by hedge funds in CPO futures.

“In recent years, we have seen more participation by hedge funds in palm oil contracts,'' an analyst said. However, the general opinion is that their involvement in CPO futures pales in comparison with hedge fund activity in soy bean futures.

FFB production should improve as IOI Corp's trees are said to emerging from biological stress and the group's property division, analysts say, should do even better in FY08 as IOI Corp has forecast a 5% rise in yearly property revenue for the period.

Analysts feel the full-year contribution following the acquisition of Pan Century Edible Oils Sdn Bhd and Pan Century Oleochemicals Sdn Bhd last September would boost earnings from its resource-based manufacturing business.

IOI Corp rises 46 sen after record earnings

2007-08-28T13:14:00.001+08:00

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24-08-2007

KUALA LUMPUR: IOI Corporation Bhd’s share price rose as much as 9% or 46 sen to an intra-day high of RM5.40 upon resumption of trading yesterday buoyed by record earnings for its financial year ended June 30, 2007 (FY07).

The counter closed 26 sen higher at RM5.20, with a total of 14.7 million shares done at between RM4.94 and RM5.40. The stock has been suspended since Aug 9 for a capital repayment plan.

The company is undertaking a capital repayment on the basis of a cash distribution of RM4.20 for each cancelled share, on the basis of one cancelled share for every 20 existing shares.

On Tuesday, IOI Corp reported its highest earnings ever with a net profit of RM1.48 billion for the financial year ended June 30, 2007 (FY07), boosted by record earnings from the oil palm and property business segments.

Its net profit more than doubled to RM451.7 million in the fourth quarter ended June 30, 2007 from RM211.9 million a year earlier on the back of soaring crude palm oil prices.

IOI Properties Bhd’s share price rose to RM1.10 or 8.9% to RM13.50 yesterday after it reported a 22% rise in net profit to RM397 million for FY07, with the fourth quarter accounting for about 45% of the whole year’s earnings following a revaluation of investment properties.

It declared a second gross interim dividend of 30 sen per share payable on Sept 18, bringing the total dividends for FY07 to 65 sen per share.

IOI Properties was traded at between RM12.60 and RM13.60, with a total of 67,700 shares done.

Meanwhile, Bloomberg reported that palm oil producers had benefited as rising demand from China and India sent the commodity’s price to a record in June.

The report said IOI was seeking more estates in Malaysia and Indonesia, which together accounted for about 85% of the global palm oil output.

“We are positive on plantation stocks,” said Tan Beng Ling, who helps oversee about US$434 million (RM1.52 billion) of assets at Meridian Asset Management Sdn Bhd here.

Credit Suisse maintains ‘outperform’ on IOI Corp

2007-08-28T13:13:00.002+08:00

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23-08-2007

CREDIT Suisse is maintaining its “outperform” rating on IOI Corp Bhd, which reported record earnings on Tuesday, citing the group as a proxy to relatively strong crude palm oil (CPO) prices.

For every RM100 per tonne increase in CPO price, IOI Corp’s FY08 and FY09 net profits would rise by about 3% to 4%, said the research house yesterday.

It also raised IOI Corp target price to RM6.12 from RM6.05 (rollover to a new financial year). “Any share weakness, once the share suspension is lifted today, should be seen as a buying opportunity,” it said.

IOI Corp Bhd recorded its highest earnings ever with a net profit of RM1.48 billion for the financial year ended June 30, 2007 (FY07), buoyed by record earnings from the palm oil and property business segments. The FY07 net profit of RM1.48 billion was 78.8% above FY06’s net profit of RM829 million.

On the earnings, Credit Suisse said net profits were 8% above market consensus forecasts. Earnings before interest and taxation (EBIT) increased by 59% on-year as the plantation, manufacturing and property EBIT grew by 46% on-year, 22% on-year and 20% on-year respectively.

Stripping out the revaluation gain of RM160.6 million and the forex items, FY07 pre-tax profits were up 62% on-year.

However, CIMB Research downgraded IOI Corp to “underperform” as the latter’s core net profit, that excluded foreign exchange and property revaluation gains, was 6% to 8% below its RM1.34 billion forecast and consensus forecast of RM1.36 billion, as plantation and manufacturing earnings fell short of expectation.

“The principal de-rating catalyst is the potential share overhang from the conversion of US$370 million (RM1.3 billion) guaranteed exchangeable bonds as the share price now stands at a 5% premium over the exchange price.”

“For exposure to Malaysian planters, we prefer Kuala Lumpur Kepong Bhd and Asiatic Development Bhd, which offer better value,” it said.

CIMB Research said IOI Corp’s plantation earnings missed estimates due to a 4% shortfall in fresh fruit bunches output arising from lower yields and higher fertiliser costs, while its manufacturing contribution was lower in 4Q07 arising from weaker-than-expected margins.

It said IOI Corp did not announce a final dividend. The seven sen dividend announced earlier was below last year’s 8.7 sen and its forecast of 12 sen.

It also adjusted earnings per share (EPS) forecast upwards for IOI Corp’s share cancellation exercise, adding that it expected the plantation company to chalk up 26% EPS growth in FY08, driven by rising CPO price and higher property sales.

“Our target price which we continue to base on a forward price over earnings of 18 times, is reduced by 30 sen to RM5.20, mainly for the earnings tweaks and capital repayment of 12 sen.

“After outperforming the market by 21% year-to-date, the stock now offers only 5% upside to our target price, well below the 16% upside to our KLCI target. We are downgrading our call from ‘neutral’ to ‘underperform’, ” it said.

IOI Corp posts record earnings

2007-08-28T13:13:00.001+08:00

Link here

22-08-2007

by Lee Yu Tang

KUALA LUMPUR: IOI Corp Bhd has recorded its highest earnings ever with a net profit of RM1.48 billion for the financial year ended June 30, 2007 (FY07), buoyed by record earnings from the palm oil and property business segments.

Announcing the results yesterday, it said the FY07 net profit of RM1.48 billion was 78.8% above FY06’s net profit of RM829 million. Pre-tax profit rose 73% to RM1.99 billion from RM1.15 billion.

Revenue rose 46.5% to RM8.95 billion from RM6.11 billion. Earnings per share doubled to 24.13 sen from 14.51 sen mainly due to higher volume from the resource-based manufacturing segment and higher crude palm oil (CPO) prices.

“Plantation earnings for the current year are 46% higher than the same period last year with CPO price averaging 27% higher at RM1,759 per tonne compared with RM1,386 per tonne while fresh fruit bunches (FFB) production was about previous year’s level at 3.69 million tonnes,” it said.

The operating profit of its resource-based manufacturing business jumped 216% to RM405.4 million from RM128.3 million previously.

IOI Corp said operating profit from the property development rose from RM331.3 million to RM397.2 million.

The property investments sub-segment’s profit surged 443% to RM201.2 million from RM37 million after including a gain of RM160.7 million and restating the investment properties at fair value.

For the fourth quarter, the group’s earnings more than doubled to RM451.66 million from RM211.91 million. Revenue recorded a 54% increase to RM2.54 billion.

Meanwhile, IOI Properties Bhd’s FY07 net profit rose 22.2% to RM397 million, with the fourth quarter accounting for about 45% of the FY07 earnings after the revaluation of investment properties.

It declared a second gross interim dividend of 30 sen per share payable on Sept 18, bringing the total dividend for FY07 to 65% or 65 sen per share.

Pre-tax profit increased 30.2% to RM555.17 million in FY07 from RM426.44 million, which included a gain of RM134.9 million after revaluating its investment properties. Revenue rose 15.7% to RM704.88 million.

Excluding the gain, IOI Properties pre-tax profit rose 20% or RM70.2 million due to better sales of its commercial and high-end residential properties.

For the fourth quarter, net profit rose 143% to RM181.76 million while revenue rose 14% to RM197 million.

IOI Corp opens higher on resumption of trade

2007-08-28T13:12:00.001+08:00

by Surin Murugiah

23-08-2007

KUALA LUMPUR: IOI Corporation Bhd opened 36 sen higher to RM5.30 this morning, buoyed by record earnings for the financial year ended June 30, 2007 (FY07) and the company's announcement of a capital repayment.

The counter hit a high of 41 sen before easing off to trade at RM5.25 at 10.00am, with 4 million shares done.

The company yesterday announced a capital repayment on the basis of a cash distribution of RM4.20 for each cancelled share, on the basis of one cancelled share for every 20 existing shares.

On Tuesday, IOI Corp reported its highest earnings ever with a net profit of RM1.48 billion for the financial year ended June 30, 2007 (FY07), boosted by record earnings from the palm oil and property business segments.

JP Morgan keeps target for IOI Corp

2007-08-28T13:11:00.000+08:00

Link here

17-08-2007

JP MORGAN Research has maintained its June 2008 target price of RM6.30 for IOI Corp Bhd based on a enterprise value-to-capital employed ratio of 3.9 times for FY08. JP Morgan’s valuation implies a FY08 price-earnings ratio of 21 times.

IOI has proposed a joint venture (JV) for oil palm cultivation in Kalimantan with Harita Group. The deal, made up of two parts, involves IOI acquiring a 33% stake in PT Bumitama Gunajaya Agro (first JV) with a total planted and unplanted area of 35,340 hectares and 64,000ha respectively and three palm oil mills. The first JV also oversees a “plasma” scheme which covers an area of 22,000ha.

In the second JV, IOI will acquire a 67% stake in several companies with a total plantation land of 128,000ha.

The acquisitions would add to IOI’s planted oil palm land of 144,055ha located in Malaysia.

JP Morgan said the total cost for the acquisitions is estimated at US$130 million (RM455 million) based on a total enterprise value of US$385 million.

It said excluding the plasma landbank and the palm oil mills, pricing for the acquisition stood at US$1,693 per ha versus recent transactions in Sumatra for newly-planted land at US$4,500-US$5,500 per ha. (Transactions and asking prices of planted land in Sabah stands at US$6,000-US$7,000 per ha)

“The discount paid by IOI hence, we believe, is because 84% of the land acquired is non-planted, and also given the terrain, oil palm cultivation in Kalimantan is much more capital intensive with higher labour cost compared to Sumatra,” it said.

It said the acquisitions coupled with the group’s capital repayment would raise FY08 net gearing from 14% to a comfortable 46% given the group’s strong cash flows, while full conversion of exchangeable bonds could lower gearing to 23%.

Top 100 Companies: Biodiesel heralds the future for IOI

2007-08-28T13:10:00.000+08:00

Link here

By Leela Barrock

IOI Corp Bhd is the kind of counter that any serious investor in the sector will hold. There isn’t a research house that does not track the stock. There isn’t an institutional investor that does not have the stock in its sights. And how many of us retailers wish we could afford to buy into the plantation industry’s bluest of blue-bloods?
The IOI story has not changed much in principle over the last few years; all the staples of a well-managed company are there — strong management, strong shareholders, clear-sighted planning, planning way ahead into the future and so on. But IOI has that something extra — that little bit of magic called looking into the crystal ball and reading the future just right.
For instance, the famed Oreo cookie case in the US (a suit taken against Kraft in the US to curb the use of partially hydrogenated fats which are said to be bad for the heart) had not hit the local airwaves even, but IOI had already acquired speciality fats manufacturer Loders Croklaan in what some then saw as a coup while others took in their stride (“no big deal what, everybody looks for synergy”).
Today, the Loders buy makes so much sense it’s easy to wonder why every other Malaysian player did not leap onto the IOI bandwagon and buy comparably large and recognisable names in the industry.
But the Loders tale is an old one and there are new yarns to spin.
For the industry, the biggest story is, of course, in biodiesel.
“This is where the big upside is,” an IOI spokesman tells The Edge when asked where IOI’s share price can go now that it is over RM15.
The biodiesel industry is still in its embryonic stage and thus there are very few who can actually quantify just what kind of returns planters are looking at. The only certainty is that there is a hell of a lot of money to be had — and the smart money is already well-positioned to pick at the winnings.
For the likes of IOI, their bets are already placed with a biodiesel plant coming up in the Netherlands — smack in the middle of the European effort to go greener. But Europe is not the only potential market for biodiesel in the current environment of high oil prices.
“Of course, when the situation is right we will also be in Malaysia,” the IOI spokesman says.
Be that as it may, at RM15.40 a share (as at close last Tuesday), what can investors expect from IOI going ahead? Isn’t the stock fully valued and what about the dividend policy going forward?
“Our dividend policy has always been very generous but, when the opportunity arises, we will enhance our dividend payout even more,” the spokesman says.
In the five years between Jan 1, 2000 and Dec 31, 2005, IOI paid out a total of 147.5 sen in dividends and a 1-for-24 distribution in specie of IOI shares. Over and above that, a shareholder who bought IOI on Jan 1, 2000, would have forked out under RM3 a share but could have sold it at RM12.40 at end-December 2005. That’s an increase of over 300%. (Holding the shares for a few
months would have been the smarter alternative though, as IOI is trading at RM15.40, or 400% more now.)
Analysts familiar with the stock say based on old premises, IOI is fairly valued and the upside potential is pegged to crude palm oil price.
“With crude oil prices at current levels, biodiesel has become extremely viable not just from the environmental perspective. Thus, if CPO prices start to climb, stocks such as IOI are looking at massive upside potential as bottom-line growth will reflect this,” says an analyst.
In terms of planting strategy as well, the IOI spokesman says the company observes a strict replanting regimen of replanting 5% to 7% of its hectarage every year. “Thus, at any given point in time, 70% of our hectarage is at mature levels,” he says. Which means that 70% of IOI’s palms are at between the ages of 5 and 20 — the peak producing age of palm trees.
“We maximise returns this way,” says the spokesman.

11 Dec 2006: Corporate: IOI in a league of its own

2007-08-28T13:09:00.000+08:00

Link here

11 Dec 2006

The IOI Group is poised to become the largest producer of vegetable oil-based fatty acids in the world.
"This will give them tremendous pricing power in the edible oils market," says a foreign analyst. "When you have that kind of status, multinational companies will approach you because you are the biggest player in their market. This just pushes them into a whole different league."
Last Thursday, IOI announced that it is acquiring India-based Birla group's Pan Century Edible Oils Sdn Bhd and Pan Century Oleochemicals Sdn Bhd for RM423 million. With this acquisition, IOI will double its existing splitting capacity to 700,000 metric tons.
"This is something that IOI has tried to do for the country," group chairman and patriarch Tan Sri Lee Shin Cheng tells The Edge.
This announcement came just a week after Malaysia announced the creation of what will become the world's largest plantation company following the merger of Sime Darby Bhd, Golden Hope Plantations Bhd and Kumpulan Guthrie Bhd.
"Together, the two announcements put Malaysia on the map in a way we never have been before, even though we had all the right ingredients. Now, we are using these ingredients to create something that everybody will want a bite of," an analyst comments.
For IOI, the proposed Pan Century acquisitions are positive in more ways than the immediately obvious. For instance, an analyst says the Pan Century group has over RM100 million in tax credits. This means that for a specific duration, the effective contribution to tax for the two companies will be less than the current corporate tax rate of 26%.
"This is something that is not obvious but will go straight to the bottom line," the analyst says.
Another plus is the fact that IOI has been trying to increase its oleochemical capacity for over two years now, but was unable to find anything meaningful of good value. "This was a great chance and it fits in neatly with existing operations because the Pan Century plants are neighbours to IOI's facility in Pasir Gudang," the foreign analyst says.
Another analyst notes that at RM423 million, and considering Pan Century's profit after tax as at September 2005, the two companies are priced at a collective price-to-earnings ratio (PER) of about 12 times.
"IOI itself, at RM18.80 a share, is trading at a historical PER of 26 times. But then of course with IOI, you are paying for the whole story — what the group stands for, its sterling management credentials, its foresight, its efficiency, everything," the analyst says.
There is also little doubt in the minds of analysts that the two Pan Century companies will be turned into far more profitable ventures within a couple of years.
For its financial year ended Sept 30, 2005, Pan Century Edible Oils posted a profit after tax of RM20.121 million on revenue of RM1.57 billion. Pan Century Oleochemicals, meanwhile, posted a profit after tax of RM15.52 million on turnover of RM285.55 million.
Comparatively, according to a statement issued by IOI last Thursday evening, its manufacturing businesses reported operating profits of RM92 million for the quarter ended September 2006, which is more than double the operating profits of RM28 million for the previous corresponding quarter.
This is a far cry from the less-than-attractive oleochemical manufacturer Palmco Holdings Bhd, which IOI took over back in 1997.
It acquired a 32.96% in Palmco at RM4.35 per share in 1997 before the onset of the Asian financial crisis. The company was a loss maker at the time of the takeover and Lee, according to legend, swept in and cleaned up.
By its financial year ended June 1999, net profit was RM28.3 million. The next year, it had leapt to RM72 million. By FY2005, Palmco, by then reborn as IOI Oleochemicals Bhd, had posted a net profit of RM136.18 million. IOI Oleo was taken private soon after.
The Pan Century group owns the largest single-location vertically integrated palm oil refinery and oleochemicals complex in the world, with installed refinery capacity of one million tonnes a year.
According to IOI's statement, the production capacities of the Pan Century plants were expanded recently, which means that IOI will not have to cough up additional capital expenditure to increase capacity — at least for the near term.
One possible negative of the deal could be the fact that IOI will now become a net buyer of crude palm oil. With CPO closing at RM1,830 per tonne last Thursday, being a net buyer may not be a grand idea. However, those familiar with IOI say this may not be such an issue because the group has tied in its supplies for the future.
"Anyway, the margins in refining move in tandem with CPO prices, although the margins in oleochemicals and biodiesel move the other way," says a noted plantation analyst.

Corporate: Is IOI going into bio-fuel?

2007-08-28T13:08:00.000+08:00

Link

9 August 2005

As far as corporate deals go, IOI Corp Bhd's move to take 61.03% subsidiary IOI Oleochemical Bhd private was not surprising. What it has done instead is to push IOI watchers into huddles trying to second-guess family patriarch Tan Sri Lee Shin Cheng's next move.
"Lee never does anything for no reason," says a foreign banker.
The fact of the matter is IOI Corp completed a US dollar-denominated Eurobond issue just this March raising US$500 million, which at exchange rates then, amounted to RM1.9 billion. This, added to some RM600 million in cash balances, left the group with over RM2.5 billion in cash.
"At first when we saw the IOI Oleo deal, we thought this was the reason for the bond issue, but no, it still does not quite add up," says a local analyst. Even if every minority opts for the all-cash option of the privatisation exercise, it would only cost IOI Corp RM880 million. If all the shareholders other than IOI Properties Bhd took the cash and share option, it would cost IOI Corp about RM130 million.
So what is the group going to do with the rest of its cash hoard, especially considering it has free cash flow of over RM700 million annually?
The speculation in the market now is that the group should be taking steps towards some other "far more expensive" venture.
"Bio-fuel?" speculates the local analyst.
Probably due to the newness of the subject matter, estimates on the cost of a bio-fuel refinery fluctuate wildly from "RM1 billion or thereabouts" to "well over RM2 billion".
Either way, if anyone can do it, IOI could. It has the cash and the acumen to pull something of this magnitude off. And of course a bio-diesel facility would neatly complete the family picture.
IOI Corp already owns specialty fats manufacturer Loders Croklaan and should by the second quarter of 2006 wholly own oleochemical manufacturer IOI Oleo as well. That takes care of the edible oils and specialty fats applications of crude palm oil (CPO). Leaving of course a conspicuous empty slot in the family picture, which could be neatly filled by the industry's new favourite talking point, bio-fuel.
"With crude oil prices hovering at US$60 a barrel, the call for increasing use of bio-fuel has started resonating around the developed world," notes the foreign banker.
Existing law in the EU requires diesel to be mixed with 5% of vegetable oil. The oil of choice has been rapeseed thus far. However, rapeseed is a far more expensive alternative compared to CPO, which is among the cheapest edible oils.
Industry estimates show that at US$50 a barrel, the price of crude oil is equivalent to RM1,380 per metric tonne of CPO. Considering that CPO is now at the RM1,400 level, that means that bio-fuel is still a tad expensive.
"However, there are expectations that crude oil prices can go even higher. But then, there is also the fact that bio-fuel is a renewable energy source and a viable alternative to fossil fuels," notes one industry player.
Of course, all such news would be great for IOI Corp.
Just to put things in perspective, a local analyst says that the US is expecting demand for bio-diesel to double in the next 18 months from the current annual estimated demand of 150 million gallons. An increase of 150 million gallons would significantly reduce existing CPO stockpiles of one million tonnes.
"Even at one million tonnes, our stockpiles at today's consumption are quite tight," comments the local analyst.
IOI, of course, as one of the largest producers of CPO in the world, would stand to benefit from any increased demand for bio- fuel. However, the real money would stand to be made if it can refine CPO into bio-fuel.

But why take IOI Oleo private
"Why not?" replies the foreign banker. "It's something they should have done. And they did it," he adds.
"It's good housekeeping. They needed to do some tidying and they have. Now the structure is a lot neater and it becomes easier to reorganise," says Scott Lim, chief investment officer at CMS Dresdner.
In a nutshell, IOI Corp has proposed to cancel the shares in IOI Oleo it does not hold, which includes 11.37 million shares or a 5.63% block held by IOI Properties Bhd. In return, shareholders will have the option of walking away with RM11.08 cash per share or a share plus cash option to swap three IOI Oleo shares for IOI Corp share valued at RM10.82 each and RM11.34 for each of the other two shares.
For IOI Corp, the deal is earnings accretive. According to a foreign house earnings, enhancements can range from 2% to 5% depending on which option the minorities take. A local house says if all the shareholders take the cash-only option, then expect additions to bottom line of 7% to 7.5%.
While the jury is still out on which option the minorities will opt for, analysts say minorities should take their time.
"We have a target price of RM11.50 for IOI Corp," says Yusree Mohd Yusof, senior plantations analyst at Southern Bank.
Thus, if IOI Corp's share price goes much higher than its close last Thursday at RM11.10, minorities stand to gain as the cash and share option values each IOI Corp share at only RM10.82.
As it stands, among the downside risks for the stock are bumper soya harvests, India increasing CPO import tariffs, China decreasing CPO imports and production at levels above expectations.
The issues pushing CPO consumption are of course the trans fats issue and the GMO issue. (GMO refers to genetically modified foods, of which CPO is not one. A significant percentage of soya oil is produced from GMO soya plants.)
Other than that, analysts say India has postponed replanting of its rapeseed crops due to unfavourable weather conditions while Brazilian soya harvests have been affected by Asian Rust disease.
"All these factors could cause a supply crunch which of course bodes well for the share price of stocks such as IOI," the local analyst comments.

Interesting link on the rise of IOI share price

2007-01-04T15:11:00.000+08:00

This is something I found while surfing the net:

http://www.min.com.my/eng/html/smartsuccess_IOI.html

Interesting stuff on how the long-vision of Tan Sri Dato' Lee enables the meteoric rise of IOI share price.

A Start

2006-12-26T12:49:00.000+08:00

Hi all,

I've been an admirer of IOI since I joined the company for a 6-month stint back in 1999 while waiting for my STPM results.

I was a "Sales Coordinator" for IOI Properties at Bandar Puchong Jaya sales office.

During my stay there, I was lucky to see Tan Sri Dato Lee every week (if I remember correctly) to see how he was always interested to know the happenings at the sales department where I was.

My manager was Catherine Ng.

I was introduced to the company by a neighbour, Mr. Badrul Hisham. I seldom go back to KL now, and have since lost contact with Mr. Badrul. But I would like to thank him for introducing me to this job, as the job and my contact there has given me inmerse motivations.

Thank you, Badrul! And I would like to hear from you ....