MKH Annual Report 2017

Plantation The Group’s plantation operations are located in East Kalimantan, Indonesia housed under 2 subsidiaries, namely PT. Maju Kalimantan Hadapan (“PT MKH”) and PT. Sawit Prima Sakti (“PT SPS”) which have approximately 15,943 hectares and 2,445 hectares of plantation land respectively. The plantation lands, which are used to cultivate oil palm, are held under lease concession for 35 years from year 2007 and 2010 respectively, with an option to renew for another 25 years. Subsequently, both leases could be further extended for another 35 years. The total area planted as at 30 September 2017 for both the subsidiaries was about 16,407 hectares (2016: 16,775 hectares) with 15,622 hectares (2016: 14,679 hectares) thereof which are mature. PT MKH has fully planted about 14,877 hectares with trees ageing from 6 to 9 years. All hectares are fruiting and are being harvested. As for PT SPS, about 1,530 hectares are planted with trees ageing from 1 to 5 years with some of the planted area fruiting and harvested. The division has a CPO mill with an installed capacity to process Fresh Fruit Bunches at 90MT per hour. The following table summarises the performance of the division for the past three (3) years, rounded off to the nearest thousand, as the case may be: 23 MKH Berhad • Annual Report 2017 Production for both Estates (MT) FY2015 FY2016 FY2017 Fresh Fruit Bunches (“FFB”) 370,000 371,000 407,000 Crude Palm Oil (“CPO”) 81,000 85,000 83,000 Average CPO Price RM2,000 RM2,050 RM2,530 Oil Extraction Rate (“OER”) 21% 22% 20% PT MKH – FFB Yield/hectare 25 MT 25 MT 26 MT Management Discussion and Analysis Report Aerial view of oil palm trees planted at PT MKH plantation estate Figures exclude CPO purchased from outside parties for resale.