Boustead Plantations to aquire RM433m plantation assets

by DASHVEENJIT KAUR / TMR file pix

Boustead Plantations Bhd (BPB) plans to buy a parcel of plantation land and a palm oil mill worth RM433 million as part of its overall strategy to expand its landbank.

Its wholly owned subsidiary, Boustead Rimba Nilai Sdn Bhd, has issued a letter of intent (LoI) to Sit Seng & Sons Realty Sdn Bhd for the proposed acquisition, and the LoI has been accepted by Sit Seng & Sons.

The proposed acquisition comprises plantation land measuring 5,531.25ha and a 60-tonne per hour palm oil mill, both in Sandakan, Sabah.

This deal comes after BPB proposed to buy 11,600ha of land in Labuk and Sugut in Sabah in April this year.

In a filing to Bursa Malaysia on Tuesday, BPB noted the proposed acquisition exercise will involve the acquisition of the entire equity interest in Lubah Plantations (S) Sdn Bhd and Ever-Yield Sdn Bhd, wholly owned subsidiaries of Sit Seng & Sons.

Upon completion of the proposed acquisition, BPB’s total plantation landbank will increase by 6% from 93,400ha to 98,900ha and 5% increase in total planted area from 75,000ha to 79,000ha.

BPB’s vice chairman Tan Sri Lodin Wok Kamaruddin (picture) said the acquisitions in Sabah are part of the group’s overall strategy to expand its landbank.

“We will benefit from greater economies of scale as a result of the proximity of these estates to our existing estates in Sabah.

“Not only will we be able to lower our operations cost, we will also enjoy opportunity cost savings on the construction cost of a new palm oil mill,” Lodin noted.

At the close of trading, BPB’s shares were unchanged at RM1.26, giving it a market capitalisation of RM2.03 billion.