WTK to finish Durafarm replanting by September

The Star

12-05-2025

KUCHING: WTK Holdings Bhd is expected to complete the replanting of 1,100ha of its newly acquired Durafarm oil palm estate in southern Sarawak by this September.
Last year, some 620ha were replanted and cultivation activities of the remaining 480ha are ongoing and expected to be completed in the July-September 2025 quarter, said the Sarawak-based timber/ plantation firm.
Wholly-owned subsidiary BioFarm Venture Sdn Bhd acquired Durafarm for RM188.8mil in WTK group's major acquisition to boost its oil palm planted area by 4,394ha to 20,824ha.
The acquisition in three separate deals was completed between January 2024 and 2025.
Durafarm estate in Betong and Sri Aman had a total planted area of 4,010ha when acquired by BioFarm, with 867ha under development for replanting.
About 608ha (15.16%) are old palm trees (19 to 25 years old) that need to be cleared and replanted.
'The Durafarm estate has a relatively young crop profile, with approximately 64% of the oil palm trees having an age profile of less than three years.
'As these young palms mature and enter higher yielding age brackets, Durafarm's oil palm yields are expected to improve further and the growth momentum of Durafarm's revenue and earnings is expected to continue in future financial years, said WTK in a management discussion and analysis in the company's 2024 annual report.
The typical lifecycle of oil palm trees runs from 25 to 30 years.
The peak production cycle of fresh fruit bunches (FFB) and yields recorded during their prime mature and mature stages range from nine to 18 years.
Overall, as at December 2024, the group had about 10,048ha (48%) of the oil palm planted area in the prime age (nine to 14 years), at their peak of productivity.
Further, about 35% of the palm trees are less than nine years old.
'As the oil palm enters maturity and moves into a higher yielding age bracket, the production of the plantation segment is poised to improve further and the growth momentum in earnings is expected to continue in the future financial years,' said WTK.
In financial year 2024 (FY24), the WTK group reported a 34% jump (58,000 tonnes) in FFB output to 231,000 tonnes from 2023.
This was thanks to the contribution from Durafarm and increasing production from existing plantations as more crops moved into a higher yielding age.
WTK has in recent years shifted its focus into the more commercially sustainable and profitable plantation and food business.
These segments have been identified as key growth drivers in improving the group's earnings, as its traditional downstream timber processing operations has recorded dismal yearly financial results.
The group ceased its loss-making plywood manufacturing operation in Bintulu in January this year.
This was due to weak market demand for its key export market, Japan, coupled with intense competition from Japanese producers.
Last year, the group increased its plywood sales by 25% to 25,000 cubic metres (cu M).
Out of this, 72% went to Japan with the remaining 28% going to Taiwan.
'These challenges have reduced the timber segment's financial viability, making its continued operations less strategic for the group's future growth,' said WTK.
WTK had recently entered into agreements to dispose of two timber-related subsidiaries – Piramid Intan Sdn Bhd and Immense Fleet Sdn Bhd – for RM16mil and RM24.3mil, respectively.
The move came on its intention to shed non-core and less profitable businesses.
However, the group is continuing with its timber logging and reforestation activities.
The group operates eight timber concession areas.
Out of this, six come directly under its timber licences covering 194,000ha.
The remaining two, spanning 207,000ha, are operated by the group as a contractor.
The group oversees about 62,000ha of reforestation areas under Licenses for Planted Forest (LPF).
Each LPF has a 60-year tenure.
The reforestation areas are in Oya-Kanowit-Katibas (Sibu Division) and Bukit Raya (Kapit Division), both in central Sarawak.
Last year, the group's log production surged by 59% to 324,000 cu M (2023: 204,000 cu M), with harvesting from planted forests together with natural forests.
Besides plantation, WTK has increased investment in its food business.
The firm has done this by expanding the cold room capacity to 2,400 tonnes for fresh and frozen food products and setting up more retail outlets in Sarawak's major towns.
The group offers a diverse range of frozen, chilled and consumer products.
These include chicken frankfurters, burger patties, nuggets and carb sticks catering for markets across Sarawak.
In FY24, the group's food segment increased its revenue to RM109mil from RM83mil in FY23.
WTK's other core business is in the manufacturing and trading of adhesive and masking tapes in Penang, with the products for both domestic and overseas markets.