PPB expects higher dividends from Wilmar

PPB Group Bhd, the second biggest shareholder in Singapore's Wilmar International Ltd, expects to receive more dividends from the plantation group this year as palm oil prices remain strong.

Last year, PPB, which is involved in flour milling and sugar manufacturing, received RM70 million from Wilmar.

"Whether or not we will receive more this year will depend on how well Wilmar performs. Palm oil is still trading at strong prices," chairman Datuk Oh Siew Nam told reporters after the company's annual general meeting in Kuala Lumpur yesterday.

PPB may also set aside more money to cover further falls in the value of its investment in Transmile Group Bhd, an air cargo company that was hit by an accounting scandal.

PPB holds a four per cent stake in Transmile, via Trinity Coral Sdn Bhd.

"Last year, we already provided RM12 million, up to its net tangible value," Oh said.

The company is also in talks to sell its rubber glove business in Indonesia.

Since July 2006, PPB's rubber glove plant faced shortage of natural gas and electricity supply. The factory produced less than 30 per cent of its capacity and in December 2007, PPB decided to close it down.

"So far, we made provisions amounting to RM19 million for this glove business. We're now talking to three or four parties to sell the assets and maybe recover about US$3 million (RM9.75 million)," PPB managing director Tan Gee Sooi said.

Oh also said that there is no shortage of food.

"It is just that consumers are not willing to pay more for food when the ingredients have become more expensive."

Food ingredients have become more costly because fuel used to process food and transport them to consumers are more expensive. Crude oil prices have doubled from a year ago and is currently trading at US$127 (RM412) per barrel. Food prices have also gone up because biofuel industries in developed countries are consuming corn, soya and palm oil that could have been processed into foodstuff.