Executive Summary of Plantation Development Plan (January 1, 2004 - December 31, 2013)

The Plantation Development Plan (PDP) is prepared in accordance with the requirement of Clause 43 and Clause 79 of the SFMLA 04/97, as well as, on the recommendations outlined in the approved FMP and Clauses 81 to 84 of the SFMLA 04/97. In addition, the PDP has been prepared in accordance with all standards pertaining to plantations contained in the SFMLA and covering those compartments designated for  conversion and management as plantations. The PDP is prepared for 10 year commencing in year 2004 and to be reviewed after 5 years, that is, in year 2008. 

This PDP contains the following information:

• Policy Statement and Objectives;
• General Information of the ITP Areas;
• Basic Consideration in ITP Development;
• ITP Establisment & Management (Nursery, Land Clearing, Planting, Species Choice, Harvesting, Silviculture Measures and Fire Prevention);
• ITP Financial Analysis; and
• R&D Program 

The total area sets aside for the Industrial Tree Plantation (ITP) project is 27,736 ha. The area is highly degraged due to repetitive logging in the past. Thus, in order to develop the resource base in the area and to maintain the development of Sapulut's economy, the establishment of the ITP by planting fast and high quality species is considered as the best strategy. The main species selected for the project are Rubber (Hevea brazilensis), Acacia mangium, Batai (Paraserianthes falcataria), Laran (Neolarmarkia cadamba) and Binuang (Octomeles sumatrana).

Based on the approved FMP, the planting program is scheduled to commence in year 2006. However, infrastructure development and land preparation will commence in year 2004 and 2005 respectively. The annual target for ITP establishment is approximately 1,750 ha with the following area a arrangement;

• Rubber - 14%;
• A. mangium and Batai - 29% each; and
• Laran and Binuang - 14% each 

The matching of planting sites with the correct species is very crucial for the successful establishment of tree plantations. Therefore, the areas have been divided into the following:

                  Slope Classification                                        Preferred Species  

1. Steeper areas (15 degree < 25 degree slopes)        Acacia mangium and Batai
2. Undulating areas (10 degree < 15 degree slopes)    Rubber
3. Riverine areas (< 10 degree slopes)                        Binuang and Laran

Sapulut will use good quality planting material for its plantation. The planting material will be from seeds. This is the most efficient, economical and commonly practiced in forestry.

A financial analysis using the discounted cash flow method has been used to support and predict the viability of the ITP project for one rotation. Based on the estimated cost of operations and the projected prices of log and log volume that can be extracted, the ITP project shows that it is viable with positive returns will be generated beginning at year 12 (2017). A total of RM 479.7 million is estimated to be required to run the operations of the plantation for one cutting cycle, while generated gross revenue is projected to be at RM 917.9 million and net revenue at RM 438.2 million at current price.

For more information for our PDP, please contact us.