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NEWS ADMIN

Mahamad Rodzi Abdul Ghani

DATE

30/10/2003

NEWS PROVIDER

Mahamad Rodzi Abdul Ghani

NEWS SOURCE

Bernama

CATEGORY

HEADLINE

Mega-Merger Of Plantation Firms Not So Soon, Says
KUALA LUMPUR, Oct 29 (Bernama) -- Kumpulan Guthrie Group Chief ExecutiveTan Sri Abdul Khalid Ibrahim says that while the mega-merger of plantationcompanies is conceptually a great idea, it is not bound to take place inthe next three to four years.

"This is because there is a lot of restructuring going on now (amongplantation firms) and they will not be able to effectively plan themerger," he told reporters after attending the Malaysian Capital MarketSummit 2003 held here Wednesday.

"The current potential of the companies should be realised first. Whyshould they jump into another area," he said.

He further said that there was no urgency to merge the companies as palmoil was already a competitive crop by international standards.

"Unless you merge, and capture a bigger market share, in terms of endproducts... Malaysia has not reached that level yet. It is still acommodity producer (and) it has to go through that level of preparation,"he said.

Meanwhile, on current stable crude palm oil prices, Abdul Khalid said,"The best palm oil price should be between US$350 (RM1,330) and US$450(RM1,710) a tonne. It should not exceed US$450.

"I hope it will stabilise as the present strong rise is because of theundersupply of other vegetable oils output," he said.

Abdul Khalid said that the current prices would naturally attract shortterm players and as a player, he advised them to take a long termposition, "so that we will be able to enjoy the current prices."

"For the future of the palm oil industry in Malaysia, Indonesia and PapuaNew Guinea, we should be promoting price stability rather than high price.We should avoid unnecessary volatility in prices," he added.

As of Tuesday, November South CPO prices stood at RM1,900 per tonne.

On the listing of its Indonesian plantations unit, PT Minamas Gemilang, onthe Jakarta Stock Exchange, Abdul Khalid said that the Group would stay toits plan to sell 30 percent shareholding spread to enable Indonesian andinternational investors to participate in the group's venture inIndonesia.

Under the Indonesian listing rules, Guthrie is required to have a 25percent shareholding spread.

-- BERNAMA