By Aidila Razak
As the standoff against intruders continue, refiners in Lahad Datu claim their operations have not been adversely affected.
“It is business as usual for now although we will continue to monitor the situation as we value the safety of our workers,” a Kuala Lumpur Kepong official told KiniBiz today.
It is understood that there have been no problems of access to the plantations, although trucks transporting crude palm oil to the ports have had to take a longer route due to security roadblocks.
“Still, there has been no disruption,” the official said.
Other refiners are Kwantas Corp and Wilmar International. Wimar’s refinery is a joint venture with TSH Resources. The three refineries have a production capacity of 1.8 million tonnes per annum.
AmResearch said that TSH/Wilmar’s refinery, located in Kunak, is “not affected by the shootout” so far. Gunmen were spotted at Kunak earlier this week.
Similarly, Plantation Industries and Commodities Minister Bernard Dompok was reported yesterday as saying that the refiners will not be affected as they are located in town, further from the hostilities.
This clarifies a Reuters report yesterday that Malaysian palm oil refineries located near the standoff point are “preparing to halt operations if the violence drags on”.
10,000 Felda workers on leave
Bernama yesterday also reported that minister in charge of Felda Ahmad Maslan said that some 10,000 workers at Felda Sahabat have been granted leave due to security reasons.
He was quoted as saying that an adverse impact on operations cannot be ruled out but this cannot yet be quantified.
Part of the violence is taking place within Felda Global Venture’s 95,542-ha Felda Sahabat plantation.
Sabah contributes about a third of the country’s palm oil production, but analysts believe that the fighting will have limited impact on planters earnings.
“We believe (the fighting) is short term, and is limited to a very small area of Felda Sahabat. It will have little impact on FGV’s earnings as a whole,” Alliance Research Arhnue Tan told KiniBiz.
Agreeing, CIMB Research said the hostilities have blocked access to only about 1,000ha of the mammoth Felda Sahabat estate.
It also reported that Hap Seng Plantations is operating as per normal while Genting Plantations has “temporarily suspended the intake of CPO”, suspected to be due to ‘security reasons”.
AmResearch in its note added that TH Plantations which has an estate of about 6,000 ha in Lahad Datu is also unaffected as its estates are “located quite a distance away from the shootout”.
“The group’s operations in the oil palm estates and palm oil mills are running normally,” the research house said.
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