Boustead Plantations to invest RM250mil in Sabah estates
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.