Kim Loong buys Sabah plantation land for RM92.5m

PETALING JAYA: Kim Loong Resources Bhd has purchased four pieces of oil palm plantation land in Sabah for RM92.54 million cash, or RM32,500 per acre.

It entered into four conditional sale and purchase agreements with Greenfingers Sdn Bhd, R & H Sdn Bhd, Bakti Perusahaan Sdn Bhd and Sri Handal Sdn Bhd for the acquisition of the plantation land measuring 258.06ha (RM20.73 million), 390ha (RM31.18 million), 149.05ha (RM11.97 million) and 361ha (RM28.66 million) respectively.

The acquisitions are to be settled by cash through its internal funds wholly.

Kim Loong said the oil palm plantation land is strategically located nearby the group’s estates in Sandakan, Sabah. Therefore, it is expected that the group can achieve synergistic effects and benefits in terms of cost efficiency in managing the operations of those plantations acquired.

In addition, the group said the purchase prices are fair and reasonable considering the palm age profile, well-maintained condition of plantations by the vendors, accessibility and good location nearby the group’s existing plantations.

“The acquisitions will increase the supply of fresh fruit bunches (FFB) produce to the group’s palm oil mill at Telupid, Sabah so as to contribute towards optimising utilisation of the mill’s processing capacity as well as to reduce dependence on FFB supply from third parties especially during a seasonal low crop period,“Kim Loong said.

It added that the acquisitions will increase the group’s landbank for oil palm plantation and will contribute positively towards the group’s long-term growth in profitability.

The acquisitions are subject to the relevant authorities’ approvals such as the Sabah’s Ministry of Agriculture and Fisheries.

Barring any unforeseen circumstances, the acquisitions are expected to be completed by the third quarter of the year 2020.