SANDAKAN: Despite its move in recent years to expand its operations into Indonesia and create a new land bank in this neighbouring country, IJM Plantations Berhad says it is here to stay.
“We are here to stay in Sabah with or without the labour,” Joseph Tek Choon Yee, its chief executive officer stressed in an interview at his office here yesterday when asked if its move into Indonesia was due primarily to labour considerations.
He said the company would love to find more land within Sabah, if it could expand organically here, adding that “Unfortunately, land is no longer easily available.”
Tek explained that the company wants to grow organically, and to put its impetus to its core competency, that is in the upstream of the plantation industry.
For this reason, he said, the company has to find a new land bank elsewhere.
“The wisdom of the board is that we go into Indonesia. It was in 2006 when we propelled the move into that country.”
The CEO of IJM Plantations said the company is moving into Indonesia with a scale that it is comfortable with.
He explains: “We are not going into such a big scale and acquire hundreds of thousands of hectares. We want to go in there at the pace by which our management and human resource can cope.”
IJM Plantations presently has four properties in Indonesia, three in East Kalimantan located at Bulungan and Kutai Timur and another in at Lampung, Sumatra.
“Eventually, the land size would be the size of Singapore. To date we have planted 9,000 hectares, moving to the milestone of 10,000 ha, by the end of this year.
“We have already started our palm oil mill construction. Over the next three years, we would be able to complete planting the 40,000 ha there.”
This Sabah centric public listed plantation company, that celebrates its 25th anniversary this year, started in 1985 by IJM Corporation a construction company.
Tek recalled that IJM Corporation was bidding to build a road along Kinabatangan.
“As we were bidding for it, there was an opportunity for a joint venture on this piece of land which is known today as the Desa Talisai.”
At that time the IJM was also looking at opportunities for diversification, other than its core business of construction.
“The joint venture merited that we would go into oil palm and that was how we changed the landscape there. From there, we moved into other parts of Sandakan, then into Sugut in the Beluran district.”
In Sabah, IJM Plantations now has 11 oil palm estates and four palm oil mills.
From its humble beginning with a start-up investment of RM7 million, the company has transformed and multiplied to become a public listed company with a market capitalization of over RM2 billion today.
“The foresight of the visionaries, the sweat and tears of the pioneers of IJM’s oil palm venture in Sabah have done us proud,” said Tek who took over from Velayuthan Tan Kim Song when the latter retired as CEO and Managing Director in May this year.
Tan had been at the helm of IJM Plantations since its inception.
Touching on the company’s decision to locate its head office here in Sandakan, Joseph Tek stated that the company had always believed that it should be where it is operating in the community.
“Our community is here in Sabah, in Sandakan, and to put this corporate body headquartered here is a testimony that we are here to stay.
“We want to render back what we have achieved, by providing jobs, by putting the resources here.
“We are also outreaching to the communities in many of our corporate social responsibility (CSR) activities,” he added.