New Britain Palm Oil (NBPOL) says an extension of its Papua New Guinea palm oil refinery to handle products required by confectionery giant Ferrero should be operational by mid 2011.
Reporting impressive third quarter results for 2010, as it cashed-in on higher world prices for sustainable palm oil, NBPOL chief executive Nick Thompson said the firm's capital project to expand the refinery, “specifically to cater for products required by Ferrero Rocher, is making steady progress, with a planned start up in the first half of 2011”.
In a third-quarter trading update covering January 1 to September 30 2010, Papua New Guinea-based NBPOL reported sales of US $355.3m, compared with $238.1m in the previous period during 2009, meaning profits of $87.9m.
Thompson said that although palm oil extraction levels were “slightly lower” than 2009 due to unusually high rainfall, NBPOL produced a record 335,086 tonnes of crude palm and kernel oil throughout the period – 22% up on 2009.
Soaring palm oil prices
It also achieved prices almost 13% higher as against 2009 as a result of higher world palm oil prices, since crude palm oil prices had soared to $1,070 per tonne by late November, compared with $760-$920 for the first nine months of the year.
Thompson said that despite forward sales of around 129,000 tonnes of all oils into 2011 at an average of $828 per tonne, and 12,000 tonnes into 2012 at $820, “the current higher price environment will allow NBPOL the opportunity to add to the forward sales and increase the average prices realised for such sales.
NBPOL commenced operations at its new UK refinery in Liverpool last May, and said it had seen “week-on-week increases in sales and production”.
“We are very pleased with the level of demand we have going forward, and the quality of oil produced at the refinery is of the highest standard.
“The demand for fully traceable and certified sustainable palm oil is growing steadily and more and more food manufacturers continue to contact us as part of their intention to bring forward their commitments to using traceable and certified sustainable palm oil.”
NBPOL acquired 80% of Kula Palm Oil in April 2009, and the firm said the latter’s intergration was “progressing well”, with 236,639 tonnes of palm fruit bunches harvested during the first five months following the acquisition.
However, Thompson conceded unduly low yields and “several operation deficiencies” at the time of acquisition meant that KPOL is not currently producing at market-leading levels, although “we remain of the view that the new estates...do have such potential”.
“Our key focus at KPOL is to continue to work towards reducing the age profile of the oil palms through an ongoing replanting programme, increasing and optimising fertiliser application and reducing infrastructure constraints.
“Whilst work is progressing well, it is still relatively early in the process. However, we look forward to gradually increasing yields over the next 24 months.”