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Friday, October 4, 2013

Kulim eyes Kalimantan land

Source: http://www.thestar.com.my/Business/Business-News/2013/10/04/Kulim-eyes-Kalimantan-land.aspx

JAKARTA: Kulim (M) Bhd is eyeing to take control of 40,645 ha of oil palm land through the acquisition of an Indonesian company for US$43.44mil (about RM140mil) and ventures in the oil and gas sector.

Its chairman Datuk Kamaruzzaman Abu Kassim said Kulim was acquiring a greenfield project in northern Barito, Central Kalimantan, Indonesia, to enable the group to diversify its geographical presence into other locations suitable for cultivation of palm oil apart from Malaysia, Papua New Guinea and the Solomon Islands.

He said Kulim was poised to increase its direct landbank by 80% from the current 49,551 ha to more than 90,000 ha upon the completion of the acquisition, noting that the move was consistent with the group’s long-term business plan to expand their oil palm landbank.

“With oil palm land getting scarce in Malaysia, Kulim is proactively looking at steps to significantly increase its landbank particularly among neigbouring countries.

“The choice of Kalimantan was also made given the goup’s previous experience in the region besides the biophysical suitability of the area as evidenced during the site visits,” Kamaruzzaman, who is also president and chief executive of Johor Corp. — Bernama

said in a statement here on Thursday.

Johor Corporation owns a 56 % stake in Kulim.

Earlier, Kulim inked a memorandum of understanding (MoU) and conditional shares sale agreement (CSSA) with Indonesia-based PT Graha Sumber Berkah (PT GSB) to signify both parties’ commitment to work together in developing the oil palm plantation and explore opportunities in the downstream and upstream oil and gas sector.

Also present to witness the event were Johor Mentri Besar Datuk Seri Mohd Khaled Nordin, who is also Chairman of Johor Corporation; Chief Secretary to the Government of Malaysia Tan Sri Dr Ali Hamsa, who is also Deputy Chairman ofJohor Corporation; and Malaysian Ambassador-Designate to Indonesia Datuk Seri Zahrain Mohomed Hashim.

Kulim returns to Indonesia after a break of over six years. It sold a total of over 40,000 ha of its oil palm plantation in Kalimantan and Sumatra in 2006.

Earlier, when addressing the event, Kamaruzzaman said the company was expected to fully develop the oil palm plantation in Barito in seven to eight years and expected to get returns in 12 years.

Meanwhile, Kulim Managing Director Ahamad Mohamad said the group was committed to procuring the relevant endorsements for the greenfield development, and has engaged Daemeter Consulting to carry out all the necessary assessments.

Daemeter is a leading independent consulting firm in Indonesia promoting sustainable and equitable management of natural resources.

Ahamad said Kulim’s move to acquire a 75 % stake in Indonesia-based PT Wisesa Inspira Nusantara (PT WIN) for up to US$43.44 million would pave the way for the group to tap into the expertise of its local partner PT GSB that would effectively hold the remaining 25 % stake of PT WIN.

The company via its advisor RHB Investment Bank had, at the close of trading today, announced to Bursa Malaysia the details of both the MoU and CSSA.

For the year ended Dec 31, 2012 (based on restated figures due to discontinued operations), Kulim’s revenue dipped 13 % to RM906.82 million from RM1.042 billion in 2011, mainly due to lower palm product prices.

In the same period under review, Kulim’s profit after tax rose 0.3 % to RM1.011 billion from RM1.007 billion previously. — Bernama

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