KUALA LUMPUR: Malaysian palm oil producer Sarawak Oil Palms Bhd is focusing on maximising yields from existing plantations as the state grapples with lower productivity compared to other regions in Malaysia.

Sarawak, with 1.62 million hectares (4 million acres) of oil palm plantations, accounts for 29% of Malaysia's total palm oil acreage but it produced only 21.6% of the country's palm oil output, with yields lagging behind neighbouring Sabah and Peninsular Malaysia. The country is the world's second-largest palm oil producer.

There are no new lands for expansion and the state faces challenges from climate and soil issues that impact productivity, Sarawak Oil Palms CEO Eric Kiu told Reuters in an interview on the sidelines of the Malaysian Palm Oil Board industry conference on Wednesday.

The Malaysian government has capped oil palm cultivation at 5.6 million hectares, focusing instead on improving agricultural practices to boost yields.

"We can't plant more, so the only thing is to maximise what we have.

"Our soil in general is also not as good as those in Sabah. There are certain parts of Sabah which have volcanic soil and produces much better yields. We just have to overcome this and find a better way to manage it," Kiu said.

Kiu maintains that the company's production is targeted to grow this year by 5% from a year earlier.

Sarawak Oil Palms' total production was 1.25 million metric tons last year.

In its second quarter results, the company said it was taking effective steps to improve its production through better management, including cost control and by replanting.

"We replant between 4,000 to 6,000 hectares a year, aiming to complete full replanting cycles within 15 years," Kiu said. - Reuters