Sitt Tatt to Diversify Into Oil Palm Business in Indonesia

KUALA LUMPUR, Aug 18 (Bernama) — Sitt Tatt Bhd (STB), which is predominately involved in the semiconductor and property industry, is planning to diversify its business into oil palm refining in Indonesia by early next year.

Its Executive Chairman, Tan Sri Dr Mohan M.K. Swami, said the company was currently in talks with several parties to build five oil palm refineries.

It is also negotiating with small Indonesian plantation owners with the view of refurbishing five existing refineries it plans to acquire from them.

Dr Swami said Sitt Tatt would invest about US$100 million for this venture.

“We are looking at 10 mills first, each costing about US$10 million,” said Mohan, adding that the mills were expected to contribute to group turnover between three and four years.

He told Bernama, in an interview after the company’s annual general meeting here today, that Sitt Tatt had decided to diversify into the oil palm business as it provided stable returns.

“There is already more than 100 refineries in Indonesia which is a large producer of oil palm, but there is still a shortage given the fact that the country is expected to produce 20 million tonnes of crude palm oil this year,” said Dr Swami.

He said Middle East and Taiwanese investors have also shown positive interest for this project.

Dr Swami also disclosed that Sitt Tatt was looking at the prospects of venturing into the global healthcare business, early next year, as part of exploring new opportunities.

“We are eyeing the Middle East and South East Asia for this business,” he added.

On the group’s semiconductor related business, he said Sitt Tatt would invest S$5 million in research and development over the next three to four years.

“Continuous R & D is necesary to develop new products and to place the group in a strategic position to take advantage of the economic recovery,” Dr Swami said.

The semiconductor related business is the major contributor to group revenue contributing 62 per cent of turnover whilst its sticker and label printing business contributed 23 per cent.

Sitt Tatt’s operates in Malaysia, Singapore and China.

For the financial year ended March 31, 2009, revenue slipped 22 per cent to RM56 million from RM72 million registerd in the previous financial year. Source : BERNAMA by Santhia Panjanadan

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