In 2016 the Asian oil palm industry was affected by the cumulative effect of the El Nino dry weather phenomenon. Major producers in Malaysia and Indonesia suffered very low crop yields. In Thailand and Philippines, Univanich was similarly affected with our lowest crop yields and poorest result for many years.
The good news is that El Nino is not a permanent feature of our weather and in 2017 there has been very good rainfall in the normally dry season January - March. This is a very encouraging sign for the year ahead.
Despite the lower consolidated profit of Baht 344.59 million in 2016 Univanich has been able to maintain an unchanged dividend to shareholders, whilst also continuing significant investment for future growth of our business. This is a benefit of our strong balance sheet and prudent management over the years.
In our previous Annual Reports we have attempted to explain the on-going dispute over the Chean Vanich land concession. This matter is now before the courts but in order to summarise for the understanding of shareholders we can present this basic timeline, going back more than 60 years. The crucial events during that timeline are as follows:
|:||The current Land Law came into effect 1st December 2497. If farmers had been occupying and utilizing land prior to that date they are entitled to remain, also entitled to transfer this occupation right to others.|
|:||The founder of the Univanich company, Mr Chean Vanich, began purchasing land from farmers (1967) who had occupied and cultivated the area well before the 2497 Land Law. The intention of these acquisitions was to create a sufficient area for a pioneering oil palm estate which later became known as the Chean Vanich Estate.|
|:||Surveyors from the Land Department surveyed the many blocks purchased by Khun Chean and prepared land maps to confirm the occupation of these areas. These maps with related documents equivalent to Sor Kor 2 documents are officially filed at the Plai Phraya Land Office. There were three groups of these land parcels surveyed and mapped in 2520, totaling 11,291 rai.|
|:||A first Wild Life Reserve was declared in the region but parts the WLR boundaries overlapped land which had already been occupied and cultivated prior the 2497 Land Law.|
|:||A Forest Reserve was declared, partly overlapping the areas which had been occupied since before the 2497 Land Act, including the 11,291 rai purchased by Khun Chean around 2010 and already mapped by the Land Office, for Sor Kor 2.|
|:||The Forestry Department issued a Land Concession of 20,000 rai, which overlapped much occupied land, including those blocks already mapped for Sor Kor 2. The issuing of the 20,000 rai concession to the Chean Vanich Company enabled the pioneering joint venture with Unilever PLC International Plantations Group which brought capital investment and overseas expertise to develop the Univanich concession. In the event, only 15,000 rai of the 20,000 rai concession could be planted because some residents of the remaining areas chose not to sell their occupation rights.|
|:||A second Wild Life Reserve was declared, with the first declaration being cancelled, however it also overlapped parts of the Forest Reserve, parts of the Chean Vanich Concession and parts of the areas occupied and cultivated since|
|:||Univanich began the process to renew the lease over those parts of the concession area which it had developed.|
|:||The Concession expired 21st April 2556 The Univanich application to renew had been approved at all steps of the legal process but remained with the Minister of Natural Resources and Environment (NRE) who did not present it for Cabinet endorsement, as required by Law. Univanich then petitioned the Administrative Court.|
|:||11th May, The Administrative Court ruled that the Univanich renewal application had been correctly processed and the Minister of NRE must present it to the Cabinet for endorsement. The Minister did not appeal and the Administration Court rejected an NRE request for additional time beyond the 60 days granted in the Court judgement.|
|:||Univanich began petitions to the Administration Court requesting the Land Office to issue Chanote Land Titles over those areas which had been occupied and cultivated before the 2497 Land Law and which already appear on the district land maps.|
|:||The Civil Court in Krabi issued a Temporary Protection order to allow Univanich to enter and operate in 2,782 rai of the company’s plantations which boundaries had been overlapped by a Wild Life Reserve designation in.|
|:||The Civil Court in Krabi issued an Enforcement Order to restrain officials of the Wild Life Reserve from obstructing Univanich entry to the land and interfering with the company’s operations in that 2,782 rai of the company’s occupied land.|
This long process is continuing with many legal cases before the Administration Court, Civil Court and sometimes the Criminal Court. We continue to have faith in the judgement of the Courts and in the strength of our legal case. We remain confident that justice will prevail and we will regain full possession of these lands to which we are entitled under the law.
I would like to take this opportunity to congratulate our management teams in Thailand and in Philippines for their success in guiding our business through a very challenging year. I would also like to thank our many stakeholders for their loyal support during 2016 and for their continuing interest in the development of our company and the communities in which we operate.