INTRAPRENEUR VENTURES.
JCorp’s introduced Intra 2.0 programme on December 2016 and implementation across all IV companies was held in 2017. This to create a conducive ecosystem for intrapreneurs with the context of a 21st Century economic and business landscape. The programme identifies three (3) categories of intrapreneurs, with emphasis on their financial contribution as one of the key bottom lines as well as their business sustainability.
Kulim has been reassessing the performance of the companies it has taken under its wing. Consistent with the corporate direction we have taken, priority will be given to nurturing companies that are related to our core palm oil business.
Kulim stands at the crossroad of a pivotal stage of its development. These are exciting times as we continue to lay the foundations that will anchor new growth to future success. We have a viable plan and the strategies we have crafted will serve us well in a changing and challenging market environment. Time will show the validation of the Group’s vision and the actions taken today.
OIL AND GAS
On 10 December 2014, our wholly-owned subsidiary, Kulim Energy Nusantara Sdn Bhd (“KENSB”) signed a Conditional Subscription and Shares Purchase Agreement (“CSSPA”) to acquire a 60% stake in PT Citra Sarana Energi (“PT CSE”) for USD133.55 million. Two subsidiaries of PT CSE, namely PT Rizki Bukit Barisan Energi (“PT RBBE”) and PC SKR International (“PC SKR”) have been awarded a Production Sharing Contract (“PSC”) for the South West Bukit Barisan (“SWBB”) Production Sharing Contract (PSC”), located in the West Sumatera Province. On 7 February 2016, a Supplemental Agreement (“SA CSSPA”) was signed with the vendors, revising the investment cost downward to USD80 million to take into account lower crude oil prices.
The completion date of the CSSPA and SA CSSPA has been further extended to 4 November 2018, pending approval of the Indonesian Government and Satuan Kerja Khusus Pelaksana Kegiatan Usaha Hulu Minyak dan Gas Bumi (“SKK MIGAS”). The Plan of Development (“POD”) approval is expected to be obtained by the first half of 2018. In the meantime, PT RBBE has fulfilled all its obligations to drill four (4) exploratory wells as required under the POD and the SKK MIGAS.
AGROFOODS
Kulim is currently evaluating the viability of expanding its cattle and pineapple cultivation operations. Our cattle operations are contributing towards the nation’s food security programme, while Malaysian pineapples have a high marketability worldwide.
PROPERTY DEVELOPMENT
As a plantation-based company, Kulim has a vast landbank, with sizeable tracts suitable for development. The first phase, at Taman R.E.M. is being developed to provide staff housing and is expected to be completed by end-2018. Several of our estates in the vicinity of Pengerang also hold the potential of property development as a spill-over from Petronas’ Refinery and Petrochemical Integrated Development (“RAPID”) project.
ACKNOWLEDGEMENTS
My confidence in the future of Kulim is strong. This is because I know I can harness the knowledge, experience, professionalism and commitment of our employees, who will undoubtedly play a decisive role in shaping our corporate future. In a demanding year, it has been inspirational how everyone, both management and staff, have pulled together to achieve all we have set out to do. On behalf of the Board, I express my sincere appreciation for all your efforts.
In this time of revitalisation and preparing for the next thrust forward, we are grateful for the backing we receive from several quarters. Our parent company, JCorp, has always been there to provide guidance and support. We have also benefited from the support of our business partners and associates, consultants, financiers, media and the relevant government and regulatory authorities both in Malaysia and Indonesia. Your support has always made the difference.
The momentum has been established and we look forward to achieving many more milestones.
I thank all of you.
DATO ’ KAMARUZZAMAN ABU KASSIM
Chairman
Non-Independent Non-Executive Director