Palm oil maker Anglo-Eastern struggles to expand

04 April 2007 19:09  [Source: ICIS news]

TORONTO (ICIS news)--Palm oil maker Anglo-Eastern Plantations is finding it hard to further expand in Indonesia, the company said on Wednesday.

 

Anglo-Eastern, which has about 34,000 hectares of mostly palm oil plantations in Indonesia, said with the current high crude palm oil prices of around $640/tonne land to expand crop production was hard to come by.

 

But it added: “Our management continues to search for new land or estates to acquire.”

 

Analysts have repeatedly noted supply constraints as the two top palm oil-producing countries Indonesia and Malaysia run out of land. Palm oil is in increasing demand as a feedstock for biodiesel.

 

Anglo reported 2006 operating profit up 18%, at $26.3m (€19.7m), on the back of high palm and crop prices, which more than offset the impact of a weaker US dollar and higher operating costs in Indonesia. Revenues were $79.1m, up 23% from 2005.

 

Anglo’s crude palm oil (CPO) price for 2006 was $479/tonne, up 14% from 2005, driven by high demand.

 

Commenting on the 2007 first quarter and outlook, Anglo said that with the exception of North Sumatra crops so far in 2007 appeared to suffer from the effects of the drought in the region.

 

However, the London-listed company expects to further improve profits this year, provided “current [CPO] prices are maintained and unless there is a significant decline in crops,” it said.

 

($1 = €0.75)

By: Stefan Baumgarten
+1 713 525 2653

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