FGV TO INVEST RM283.5 MLN TO DEVELOP NEWLY-ACQUIRED LAND IN INDONESIA

12 Jul 2013 11:19

KUALA LUMPUR, July 9 (Bernama) -- Felda Global Ventures Holdings Bhd (FGV) is investing RM283.5 million over the next five to six years to develop its newly-acquired land in Kalimantan Barat, Indonesia.

FGV's chairman, Tan Sri Mohd Isa Abdul Samad, said the investment covered agricultural costs (RM236.76 million) and capital expenditure (RM46.79 million) for the 21,037 hectares (ha) acquired by its unit, Felda Global Ventures Kalimantan Sdn Bhd (FGVK).

FGVK today acquired 95 per cent stake each in PT Temila Agro Abadi and PT Landak Bhakti Palma for RM44 million in Kalimantan Barat, Indonesia.

The first agreement involved acquiring interest in PT Temila for RM25.7 million, which owns 8,193ha in Sebangki district of Landak, Kalimantan Barat for development into an oil palm plantation.

To date, 725ha had already been planted with oil palm.

The second agreement involved acquiring PT Landak Bhakti for RM18.3 million which owns 12,844ha of rubber land in Sekadau province.

Isa said the purchase consideration for the acquisition will be funded from initial public offering proceeds of RM4.46 billion in which the group still has RM3.85 billion.

He said the acquisitions were a strategic investment in two core commodities that was expected to enhance the future earnings and shareholders value of the group.

"Furthermore, the PT Temila land is adjacent to our PT Citra Niaga Perkasa.

"Therefore, the acquisition presents an opportunity for us to achieve economies of scale by sharing the nursery and palm oil mill as well as reducing labour cost," he told reporters after the signing of the purchase agreement here today.

Isa said the group was currently in a pipeline to acquire more land outside Malaysia and the countries which were currently on its radar included Myanmar, Cambodia and Papua New Guinea. -- BERNAMA

ZER THs