Golden Hope to Expand Oil Palm Estates in Indonesia

BUSINESS TIMES (MALAYSIA): Golden Hope Plantations Bhd may spend as much as RM1.3 billion to enlarge its oil palm estate holdings in Indonesia sevenfold over the next decade.

The company wants to expand its Indonesian oil palm hectarage from 20,000ha now to about 150,000ha within the period. It costs about RM10,000 to develop a hectare of oil palm estate in Indonesia.

Golden Hope group chief executive Datuk Sabri Ahmad said the company will start the expansion drive by doubling its oil palm estate hectarage in Indonesia to about 50,000ha over the next five years. The early part will cost Golden Hope some RM300 million.

“However, not all estates will be owned by Golden Hope … the long-term expansion could either be an outright purchase, on a joint-venture basis or managed by Golden Hope for another firm,” he told Business Times.

He said Golden Hope will also cooperate with its West Asian partner, the Savola Group of Saudi Arabia, which imports 1 million tonnes of CPO a year into Saudi Arabia, Egypt and Jordan.

Golden Hope’s expansion plan is in line with its vision to double its crude palm oil (CPO) production to 1.6 million tonnes in 10 years.

Sabri said the land expansion is also to feed CPO into its three biodiesel plants – one each in Banting, Selangor, Bintulu (Sarawak) and Rotterdam (the Netherlands), slated to produce a total of 400,000 tonnes of biodiesel by 2007.

In Malaysia, Golden Hope will work together with state governments such as Sarawak to develop hundred thousands of hectares of “greenfields” and logged over area to grow oil palm and rubber, he said. The group has 180,000ha of plantations in Malaysia.

The company, 52 per cent owned by Permodalan Nasional Bhd, earns a revenue of between RM2 billion and RM3 billion a year and is the largest plantation player, in terms of land size, listed on Bursa Malaysia.

The largest plantation company in Malaysia is the Federal Land Development Authority or Felda, with more than 800,000ha of land.

Source March 22, 2006.