Boustead Plan­ta­tions to in­vest RM250mil in Sabah es­tates

The Star Malaysia - StarBiz - - News -

PE­TAL­ING JAYA: Boustead Plan­ta­tions Bhd will in­vest RM250mil over the next 10 years for re­plant­ing ex­er­cises and build­ing new in­fras­truc­ture at es­tates in Sabah that it is buy­ing from Du­ta­Land Bhd.

As it is, the fresh fruit bunch (FFB) yield from the tar­geted es­tates is sig­nif­i­cantly lower com­pared with the group’s av­er­age in Sabah.

The com­pany told Bursa Malaysia yes­ter­day that it had en­tered into a sale and pur­chase agree­ment with Du­ta­Land to ac­quire a to­tal of 11,579 ha of plan­ta­tion land lo­cated in the dis­tricts of Labuk and Sugut for RM750mil.

“The man­age­ment plans to re­plant about 7,400 ha out of 9,998 ha of plantable area of the es­tates over the next 10 years with im­proved high-yield­ing, semi-clon- al and clonal oil palms, which is ex­pected to boost the FFB yield and prof­itabil­ity,” it said.

Boustead Plan­ta­tions said the pro­posed ac­qui­si­tion was part of the group’s strat­egy to ac­quire more plan­ta­tion land in Malaysia in view of the scarcity of suit­able and size­able land banks for oil palm cul­ti­va­tion.

“The pur­chase con­sid­er­a­tion rep­re­sents a dis­count of RM10mil or 1.3% from the mar­ket value of the plan­ta­tion land of RM760mil,” the com­pany said in its fil­ing with the stock ex­change.

Du­ta­Land, in a sep­a­rate an­nounce­ment, said it in­tends to use pro­ceeds from the dis­posal to pur­sue new busi­ness un­der­tak­ings when the op­por­tu­nity arises to di­ver­sify the group’s busi­ness port­fo­lio, which will gen­er­ate re­cur­ring in­come.

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