Green issues hold up UMB’s plans

TheStar Tue, Sep 29, 2020 09:00am - 6 months ago


When contacted by StarBiz, UMB chief executive officer Peter Benjamin (pic) said it would be difficult to determine the time frame when the cash crop JV project will start again. UMB had initially planned to start planting its first large-scale cash crop, stevia, a popular substitute for sugar, on a 100ha site this year.

PETALING JAYA: There will be some delay in the progress of United Malacca Bhd’s (UMB) large scale commercial cash crop joint-venture (JV) in Indonesia because of environmental issues.

The planter decided to halt the operation of its 60%-owned Indonesian JV PT Wana Rindang Lestari (WRL) in Sulawesi starting on Saturday to address the issues raised by several non-governmental organisations (NGOs) recently.

When contacted by StarBiz, UMB chief executive officer Peter Benjamin (pic) said it would be difficult to determine the time frame when the cash crop JV project will start again.

UMB had initially planned to start planting its first large-scale cash crop, stevia, a popular substitute for sugar, on a 100ha site this year.

“At this juncture, UMB is also unable to ascertain the financial and operational impact, if any, of its JV in WRL, ” he added.

The NGOs had highlighted environmental issues pertaining to the operations of WRL, which has a business licence to source timber products over a land area of about 59,920ha in the regencies of Tojo Una-Una and Morowali in Sulawesi.

Of the total landbank, UMB is looking at 35,000ha-40,000ha dedicated to planting cash crops such as coconut, cocoa, coffee and stevia within the next 10 years. Benjamin, however, has expressed confidence that the plantation group would be able to settle the matter amicably. “I don’t think this will be an issue once everything is being ironed out, ” he said. He pointed out that an assessment of the soil and land terrain as well as an environment report had been done before the JV project started and was approved by the relevant authorities.

“Since additional environment information is requested (by the NGOs), UMB and our Indonesian partner, PT Sinar Kemilau Cemerlang, will also look into it.

“We will undertake the high conservation value (HCV) and high carbon stock (HCS) studies as well as take up further discussions with all the stakeholders involved on the next course of action, ” explained Peter.

The HCV, HCS and impact assessments are important to mitigate the significant sustainability risks associated mostly with new plantation development.

Pure oil palm planter UMB is betting on its venture to plant cash crops in Indonesia, which has the potential to be a big contributor to its profit within the next three to five years.

In early 2019, the group disposed of four estates in Negri Sembilan and Melaka for RM175.14mil to Huat Lai Resources Bhd.

The bulk of the sales proceeds were to be used for its cash crop venture in Indonesia and to reduce the group’s borrowings.






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