PUBLIC Investment Bank (PIB) conducted site visits to Sarawak Plantation Bhd (SPB) and Sarawak Oil Palms Bhd (SOP) in Miri, Sarawak. Both companies are early pioneers of Sarawak’s oil palm industry and collectively account for 7% of the state’s planted area.
A key takeaway from the visit is the strategic landbank exposure along the Pan-Borneo Highway, which presents medium- to long-term monetisation optionality.
“Operationally, we observed encouraging progress in mechanisation and biological yield enhancers, including advanced harvesting machinery and EK weevil hatchery facilities, which should support productivity gains over time,” said PIB.
Management has targeted a long-term replanting size of 4,000-5,000 hectares per annum.
On fresh fruit bunch (FFB) production growth, management expects a decline of 10% for financial year 2025 (FY25) but a low single-digit growth for FY26.
It has approximately 5,000 acres located along the Pan Borneo Highway, which is slated for asset monetisation in the future.
It has a 10,000ha plantable area that is catered for mixed crop planting. The group has earlier ventured into high-value downstream products via collaboration with Avant Health.
“We visited the seed production centre and the EK weevil hatchery centre at Peninjau and Subis estates, Miri,” said PIB.
The group is set to expand its oil palm seed production capacity by 61% to 2.57 mil seeds p.a. in 2026 before hitting 4.4 mil seed p.a. in 2030.
The estate manager also guided on the use of insect pollinators to transfer pollen from male to female flowers, which could help induce fruit formation and boost production.
The most interesting part of the visit was witnessing the performance of its new harvesting machine, Lipan, which comes in 3-in-1 features (harvesting, loading, evacuation & dumping) and it could harvest more than 3mt/day (land coverage: 5ha/day).
Both SOP and SPB have about 5,000 ha (Taniku estate) and 12,000ha (Subis and Ladang 3 estates) located along the Pan Borneo Highway. The leasehold land currently sits on SOP’s balance sheet at an undemanding valuation of RM0.23 psf while SPB leasehold lands in Subis and Ladang 3 are only at RM0.10 psf and RM0.12 psf, respectively.
PIB sees huge potential value in those landbanks once the entire Pan Borneo Highway is fully completed and most sections are fully open to traffic.
Upsides could be further enhanced if the Trans-Borneo Railway project materialises. —Dec 30, 2025
Main image: South China Morning Post
