KUALA LUMPUR: Kulim (M) Bhd, in consolidating its Indonesian operations, will divest its palm oil plantation in Sumatra to focus on building up its presence in central Kalimantan.
Managing director Ahamad Mohamad said the company would divest its stakes in wholly-owned subsidiaries, PT Multrada Multi Maju and PT Padang Bolak Jaya, as well as its 71% equity in PT Trimitra Sumber Perkasa, to a company domiciled in the British Virgin Islands for US$60mil cash.
“The decision is consistent with the company's objective to focus on developing its operations in Kalimantan, which has a higher return and development opportunity,” Ahamad said in a statement yesterday.
The deal is expected to be completed by April.
Kulim has over 34,000 ha in south Sumatra, with over 16,000 ha of palm oil plantation and a palm oil mill. At present, he said Kulim had over 63,000 ha in Kalimantan, of which 14,000 ha had been planted.
Ahamad revealed that Kulim would embark on an extensive rehabilitation and planting schedule in Kalimantan.
A RM28.5mil, 30-tonne per hour palm oil mill would also be built in one of its plantations in Kalimantan, in anticipation of higher fresh fruit bunches (FFB) production. The mill is expected to be operational in the fourth quarter.
“Our Kalimantan operations are progressing smoothly and we plan to increase our plantations by about 9,000 ha per year until 2007 and a further 5,000 ha per year, thereafter,” Ahamad said.
He described progress in Kalimantan as “encouraging”, as FFB recorded in the third quarter of 2005 stood at 12,622 tonnes, 83.7% higher than in the same period in 2004.
FFB production for the three cumulative quarters of 2005 stood at 38,900 tonnes, which is 80.2% higher compared with the corresponding quarters of 2004.
In 2005, Kulim's Indonesian operations contributed 9.6% to the company's overall oil palm production. – Bernama