RHB Research Institute expects Fitters Diversified to likely temporarily “go slow” on the signing of new third-party green palm oil milling joint ventures on the back of the depressed prices of end-product dried long fibre of late.
It said on Tuesday the decline in prices of the predominantly China-bound dried long fibre has effectively turned one of the three earnings drivers of the business model, that is offtake spread, to a drag on the bottomline.
“However, we believe this is only a soft patch and the situation should normalise once prices of dried long fibre recover on the back of a stronger manufacturing/export sector in China,” said the research house.
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