16  theSun | TUESDAY MAY 26 2009

business

Sime Darby records lower pre-tax profit in Q3

KUALA LUMPUR: Sime Darby Bhd
has reported a pre-tax profit of
RM315.52 million for the third quarter
ended March 31, 2009, down from the
RM1.58 billion in the same quarter of
last year, due to the weaker plantation
division.
Revenue for the quarter fell slightly
to RM7.47 billion from RM8.64 billion
previously.
For the nine months ended March
31, 2009, the group’s pre-tax profit
declined 48% to RM1.96 billion from
RM3.75 billion in the preceding year
corresponding period and revenue
was also down to RM23.48 billion from
RM24.92 billion.
Sime Darby said in a statement
the plantation division has registered
a 55% decrease in operating profit to
RM1.25 billion, compared with the
previous corresponding period.
This, the company said, was due
to lower average crude palm oil (CPO)
prices realised and lower produc-
tion experienced across the whole
industry, as a result of biological tree
stress.
However, despite the global slow-
down, the group’s industrial division
continued to perform strongly with
operating profit increasing by 29% to
RM624 million compared to last year,
mainly from its South East Asian and
Australasia operations.
Sime Darby’s president and group
chief executive, Datuk Seri Ahmad
Zubir Murshid, said the group is
poised to take advantage of any
recovery despite the uncertainty in
the economic environment.
“The group will also leverage on
its strong balance sheet to seize the
opportunity to acquire undervalued
assets given the attractive valuations
we are currently seeing,” he added.
Going forward, the group’s order
book until the end of calendar year
2009 is expected to remain strong.
–- Bernama

Genting eyes 50%

TNB aims to commission
first nuke plant by 2025
TERENGGANU: Tenaga Nasional
Bhd (TNB) targets to commission the
first nuclear power plant in Malaysia
by 2025 should the government decide
to include nuclear as an acceptable
energy option.
Head of nuclear energy unit TNB,
Dr Mohd Zamzam Jaafar, said TNB
cannot ignore nuclear energy amid
the uncertain future supply and
volatile fossil fuel prices as well as
gas resources.
“In order to ensure reliable and
reasonably priced electricity, the prov-
en base-load nuclear option must not
be precluded,” he said during a media
briefing on TNB’s future energy plans
at Pulau Perhentian Besar, a resort
island in Terengganu state.
Mohd Zamzam said by 2019, an
alternative energy supply resource
will become critical as current gas
resources will be on decline by that
time.
Coal price, he said, has also been
very volatile.
TNB power generation mix con-
sists of gas (about 50%), coal (35%),
hydro (14%) and oil (more than 1%).
With the establishment of the first
nuclear power plant in Malaysia,
Mohd Zamzam said, TNB will be
joining the list of countries that have
already established nuclear power
plants like Canada, France, Germany,
South Korea, US, Japan and China.
In terms of cost of electricity, he
said, nuclear power was also more
competitive than other energy re-
sources.
“Based on the selling price at the
Korea Power Exchange, the selling
price of nuclear is only 3.9 US sen/
kwh compared with 71.1 US sen/kwh
for solar (most expensive), oil 11.7
US sen/kwh, wind 10.7 US sen/kwh,
LNG 10.4 US sen/kwh, hydro 9.4 US
sen/kwh, soft coal 4.1 US sen/kwh
and hard coal 6.5 US sen/kwh,” he
said.
In procurement,
Malaysia should
pay particular
attention to emerging
standard reactor
designs. Reference
will also be made
to the International
Atomic Energy
Agency (IAEA)
guidelines.”
Nuclear power, according to Mohd
Zamzam, also addressed issues on
land and resource requirements as
it required comparatively less land
and capacity factor compared with
other sources of energy such as wind,
photovoltaic, biomass, biooil and
bioalcohol.
Nuclear power also has low radio-
active exposure.
“Target radiation level around
nuclear power stations is 0.05 mSv
per year compared with about 2.4
mSv/year (world average) of natu-
ral radiation exposure. From X-ray
chest CT scan, exposure is 6.9 mSv
per exam, radiation from ground is
0.48 mSv per year according to recent
studies,” he said.
Dr Mohd Zamzam said the cost
of a nuclear plant according to the
Chinese design for 1,000MW will
cost US$2 billion (RM7 billion) while
a Russian design will cost €2 billion
(RM9.8 billion).
The cost for research and feasibil-
ity activities, he said, could possibly
be from RM2 million.
“We will be working with the
Korea Electric Power Corporation on
nuclear pre-feasibility study,” he said.
He said with nuclear power, there
will be more stable power resource, re-
sulting in more stable electricity tariff.
Mohd Zamzam stressed that suc-
cessful nuclear power plant projects
required extensive and well-struc-
tured government involvement.
Several initiatives will need to be
taken for the successful implementa-
tion of nuclear power in Malaysia,
including a legal framework policy
and licensing fee.
“In procurement, Malaysia should
pay particular attention to emerging
standard reactor designs. Reference
will also be made to the International
Atomic Energy Agency (IAEA) guide-
lines,” he said. – Bernama
stake in MGM
Grand Macau
KUALA LUMPUR: Genting group may be one of the
parties eyeing MGM Mirage Ltd's (MGM) 50% stake in
MGM Grand Macau.
OSK Investment Research said speculations were
rife that MGM may sell its stake in MGM Grand Macau,
which was held under MGM Grand Paradise.
“Although it is premature to speculate on such an
outcome considering the intricacies of the licensing
agreement, we believe that given Genting’s strong
appetite for large-scale casino investments in Macau,
this could certainly pave the way for the group’s
long-awaited entry into Macau’s gaming market in a
meaningful way,” it said in its research note released
yesterday.
It said MGM Mirage has formed management
agreements with Infinity World Development Corp,
Magpies
a subsidiary of Dubai World, for future casino and
non-casino resorts in China and Abu Dhabi.
could OSK Investment did not discount the possibility
of Genting forming such agreements with MGM for
slide future casino developments in the region.
further
pg 31
“Such a partnership will be highly synergestic,
given MGM’s established branding and Genting's
large combined customer profile base,” it said.
At the end of the trading session yesterday, Genting
shares rose 35 sen to RM5.55 and Resorts World added
21 sen to RM2.79. – Bernama
Tesco sets up
RM300m non-chilled
distribution centre
by Hemananthani Sivanandam
newsdesk@thesundaily.com
KUALA LUMPUR: Tesco Stores (Malaysia) Sdn Bhd is invest-
ing RM300 million to set up its second distribution centre
in Bukit Beruntung.
The 4,645-sq m centre, with potential for further expan-
sion, is expected to be opened in September.
“We’re committed to the Malaysian market and we’re
committed to carry on investing in this market,” said Tesco

TM joins consortium to build cable system
KUALA LUMPUR: Telekom Malaysia
Bhd (TM) plans to increase the scope and
resiliency of its global network by joining a
consortium to plan and develop a proposal
to build an international undersea cable
system.
Called the Asia Pacific Gateway (APG),
the system will link Malaysia, Singapore,
Thailand, Vietnam, Hongkong, the Philip-
pines, Taiwan, China, Japan and South
Korea.
The system will span 8,000km and
use the latest Dense Wavelength Division
Multiplexing technologies with a minimum
design capacity of four terabits per second,
and is expected to be ready for service by
end of 2011.
World Bank says M’sian banks supportive of lending to businesses
KUALA LUMPUR: Malaysian banks in general
are supportive of lending to businesses, espe-
cially the small and medium enterprises (SMEs),
as evident by the recent World Bank report.
CIMB Group chief executive Datuk Seri
Nazir Razak yesterday said although Malaysia
was ranked about 19th in terms of attractive-
ness for investment, the country was tops in
terms of access to financing.
“I’m not sure where this discussion about
difficulty in fund raising is coming from,” he told
TM group chief operating officer Datuk
Adnan Rofiee said yesterday the cable link
would improve the resiliency not only to
each country, but also help to enhance
the survivability of all these cables during
simultaneous submarine cable cuts, like
what had happened in 2006.
“In addition, the APG will definitely help
meet demand for more internet capacity as
it continues to surge upwards.
“With APG in operation, internet users
in the region can look forward to faster and
more reliable international connectivity,”
he said in a statement.
Adnan said that the proposed cable
system has the potential to provide an
alternative route and/or restoration paths
reporters after the launch of the CIMB Founda-
tion, “My Cause”, photography contest.
He said the issue was that sometimes the
environment changed.
This in turn would change the prospects of
companies and therefore, banks would have
to re-evaluate their credit.
“I don’t agree that banks are not supportive
because that’s how we do business,” he said.
Nazir noted that banks were also eager
to use the guarantee scheme set up by the
to existing cable systems in the region as
it is designed to provide a high degree
of inter-connectivity with existing and
planned high bandwidth systems.
“As customers worldwide are
experiencing an explosive surge in
data, voice and video traffic, TM is
strengthening its global network to meet
their needs by offering more capacity,”
he said.
The other telcos in the consortium
besides TM are China Telecom and China
Unicom (China), Chunghwa Telecom
(Taiwan), KT Corporation (South Korea),
NTT Communications (Japan), PLDT
(the Philippines) and VNPT (Vietnam).
– Bernama
government for SMEs.
He said although there were some
borrowers who were unhappy, the Malaysian
banking system is actually very facilitative.
“You can’t stop the complaints. Different
banks have different views and if you’re frus-
trated with one bank, go to another.
“But that doesn’t mean the overall banking
sector here is not supportive. I think it is one of
the most supportive in the world,” he added.
– Bernama
Stores Malaysia chief operating officer David Hobbs in a
press conference on the sidelines of the Tesco International
Sourcing Programme seminar yesterday.
The new centre will be used to store non-chilled prod-
ucts while the first distribution centre in Simpang Pulai is
used to store fresh produce.
Hobbs also said Tesco Stores Malaysia will open seven
more stores in the country by the end of this year.
The seminar, organised by Malaysia External Trade De-
velopment Corporation (Matrade) and Tesco Malaysia, was
attended by 110 participants from 70 companies.
Matrade deputy chief executive officer (trade promotion)
Dr Wong Lai Sum said the seminar was an effort to promote
more Malaysian products internationally.
“Basically the whole idea is to get our Malaysian suppli-
ers into the global map and for them (suppliers) to under-
stand the rules of the game when it comes to supplying to
hypermarkets such as Tesco,” she said.
The seminar, which had representatives from Tesco
International Sourcing, Hongkong aimed to provide an over-
view of sourcing requirements for Tesco stores worldwide,
which include customer preferences, packaging, regula-
tions and logistic arrangements.
Hobbs said the company has been very impressed with
the quality of manufacturing within the Malaysian market.
“At the moment, we have 1,300 suppliers of Malaysian
products in our local stores -- that’s 70% of the products that
are manufactured by small medium enterprises (SMEs).
“Our customers are delighted by the great value and
quality of these products,” said Hobbs.
In conjunction with the seminar, Matrade is also or-
ganising several one-to-one business meetings between
Tesco officials and 65 Malaysian companies from various
industries.