Monday morning. 7th Jan 2013.
Published on Business Times:
- Giant timber concession for Permaju
By Francis Fernandez Published: 2013/01/07
KUALA LUMPUR: Permaju Holdings Bhd, which is controlled by Tan Sri Chai Kin Kong, is close to securing some 809.37 hectares of timber concession land in Sabah and Sarawak.
Business Times was told that an announcement on the matter will be made by as early as this month.
"The bulk of the land is in Sabah, near the Keningau area," said a source close to Yayasan Sabah.
State-controlled Yayasan Sabah is the one awarding the concession.
The potential concession will make Permaju the single largest land concession owner in the "Land Below the Wind".
Permaju, at its peak, had some 129ha of state-given land concession in Sabah.
Some of the said land has now been converted for development projects, while the rest has been surrendered to the state.
Business Times was told that the new award will eclipse Permaju's previous record holdings.
The impending award will be for a period of between 30 years and 60 years.
Under the terms of the contract, Permaju will help clear the land, said to be a virgin jungle area, and then plant oil palm.
The virgin jungle is filled with valuable timber, and proceeds from timber will go directly to Permaju.
It will, however, share with Yayasan Sabah any proceeds from the planned oil palm estate.
"Gross proceeds from the timber is easily more than RM1 billion," said the source.
As can be seen on the chart, Permaju ended 2012 at 42 sen and started the new year strongly on very active volume. With such a news that Permaju 'may' win a 'giant' timber concession, the stock soared on Monday morning. The Edgemalaysia carried the following news in the morning..
- Permaju shares ride on news it may win timber concession Business & Markets 2013
Written by Shalini Kumar of theedgemalaysia.com
Monday, 07 January 2013 11:22
KUALA LUMPUR (Jan 7): Permaju Holdings Bhd shares rose in active trades today after news that it may be awarded about 809 hectares of timber concession land in Sabah and Sarawak.
“It’s speculative play that is driven by the news. People could have known about this earlier and bought shares and now that the news has broken, they are selling, while others continue to buy,” said Goh Kay Chong, a senior dealer from SJ Securities.
“This could also be cyclical play, or even pre-election play….[Permaju] is the darling of the speculators.” he added.
At 10:30am, Permaju was trading at 50 sen, up 1 sen or 2%, on volume of 14.36 million. Hitting a high of 52 sen earlier, it was the third most active counter on the exchange.
According to a news report in a local paper, the outcome of the land concession award will be made known by this month.
The potential concession will make Permaju the single largest land concession owner in Sabah, said the report.
Under the terms of the contract, Permaju will clear the virgin jungle and then plant oil palm. Proceeds from the timber extracted will go directly to Permaju.
Gross proceeds from the timber is expected to be more than RM1 billion, the news report.
- Permaju directors deny knowledge of timber concession Business & Markets 2013
Written by Shalini Kumar of theedgemalaysia.com
Monday, 07 January 2013 18:02
KUALA LUMPUR (Jan 7): PERMAJU INDUSTRIES BHD 's board of directors said they were not aware of the timber concession the company was supposed to receive, as reported by a local newspaper not linked to The Edge group.
The article stated that Permaju was close to securing huge timber concessions in Sabah and Sarawak, with the gross proceeds from the timber potentially totalling more than RM1 billion.
The company's share price rose in active trade early on Monday, but fell before the market closed.
- Sabah Forestry: No timber concession issued
KUALA LUMPUR: The Sabah Forestry Department has denied reports that Permaju Industries Bhd was close to securing a 80,937-hectare timber concession in the state.
The reports, quoting sources, alluded that state-controlled Yayasan Sabah was the one awarding the 30 to 60 years concession. Part of the terms of the deal will involve Permaju to help clear the land, said to be a virgin jungle area, and then plant oil palm.
"There is no such concession issued or going to be issued. Yayasan Sabah has not awarded such a concession and also has no authority to issue concessions, which is strictly the purview of the Forestry Department and state government of Sabah," the department's director Datuk Sam Mannan said in a statement yesterday.
Mannan said Sabah does not allow the conversion of virgin jungle forests into oil palm plantation, particularly in a forest reserve. Any virgin forests, if found in the state, will be turned into TPAs (totally protected areas) and protected against any form of development, including logging.
He added that apart from pockets of virgin forests that may be found in scattered localities of insignificant sizes (50-100ha), all virgin forests in Sabah have been reserved for TPAs.
Mannan's statement came a day after Permaju's board of directors, via a filing to Bursa Malaysia, did not confirm the news report.
"The board of directors of the company, after having made due inquiries, wishes to advise that to the best of their knowledge and belief, they are not aware of such matter stated in the said article," the company noted in the filing.
Mannan said the report and speculation had done "untold damage to Sabah's and Malaysia's conservation efforts painstakingly built up over the years".
"Sabah's Deramakot Forest Reserve is the first and longest certified rainforest in the tropical world that obtained the gold standard of the FSC (Forest Stewardship Council), the most important certifying body in the world. This reserve is now a model for the world.
"... Also, the state has phased out short-term logging licences and our commercial forest reserves are managed on the basis of sustainability, with a duration of 50-100 years for security of tenure, along the Deramakot model.
"Logging under strict control (Reduced Impact Logging), is only a small part of the management," he explained.
Mannan also said that the state has more orang utans (13,000) than the whole island of Sumatra, which is at least seven times bigger.
"Sabah is the first in the world to embark on the GRASP (Great Apes Survival Project), recognised by Unesco as a world leader, at Ulu Segama-Malua Forest Reserves, an FSC-certified forest.
"In 2007, logging over 300,000ha was completely stopped in the interest of conserving orang utans and other wildlife, despite the opportunity cost of billions in foregone revenue," he said.
On Bursa Malaysia yesterday, Permaju shares closed one per cent or 0.5 sen, higher at 45 sen, with over five million units traded.
Our local FINANCIAL news report, elected to publish a financial news based on 'sources'. Did the reporter bother even checking with the facts? Here we have the Sabah Foresty Department and Permaju Industries denying the possibility of such a 'GIANT' timber concession (as boldy headlined by Business Times on Monday morning).
Now given the possibility that such a news would have a massive impact on the stock price, why didn't Business Times check the validity of its sources?
Now with the denials, what's the implications?
Was the GIANT timber concession news cooked up by the source to drive the stock price higher?