KUALA LUMPUR: Bright Packaging Industry Bhd
has entered into a new joint venture agreement with Datai Plantations Sdn Bhd (DPSB) for further diversity and increase its investment in oil palm plantation with facilities and provision of services ancillary in land located at Sarikei, Sarawak with an investment of RM5.30 million.
In a filing with Bursa Malaysia today, it said the agreement was also to supersede the previous joint venture agreement dated Aug 19, 2021 between both parties.
It said the investment by Bright Packaging shall be utilised for DPSB to construct necessary infrastructure such as access road, field road, bridges and workers hostel as well as improve water management which includes the construction of bunds and watergates.
The project refers to the development of an oil palm plantation together with facilities and provision of services ancillary to such plantation including palm oil mills on land situated in Loba Bunut, Bintangor, Sarikei Division, measuring approximately 1,921 hectares.
"Total plantable area for the purpose of oil palm cultivation estimated at 1,152.6 hectares undertaken by Datai Pelita Bintangor Sdn Bhd, a 60 per cent owned company of DPSB,” the group said.
On the investment, Bright Packaging said the sum was arrived at based on the market value of the project amounting to RM41 million and the expected internal rate of return is eight per cent, while the absolute return is expected to be RM11.57 million.
"Bright Packaging is desirous to further invest and potentially in the near future to diversify its business in the field of oil palm plantation to obtain sustainable future income with the assistance of DPSB that is able to provide technical, commercial and management expertise in the relevant industry,” it said.
In addition, it said the joint venture may reduce the group’s reliance on its manufacturing business of aluminium foil which is increasingly competitive, and subject to volatility of its primary raw material as well as fluctuation in foreign exchange rate.
"The board believes that the joint venture will potentially contribute positively to Bright Packaging’s future earnings,” it said.
It said the group remains optimistic on the long-term prospect of the palm oil industry.
"Global population and per capita income growth as well as the many health qualities of palm oil are expected to drive greater demand for palm products,” it added. - Bernama
