IOI buying Dutaland estates for RM830m

IOI Corp executive chairman says there is hard work down the road as IOI will need to rehabilitate the oil palm estates as the current yield is very low.


Kuala Lumpur: IOI Corp Bhd is buying close to 12,000ha of matured oil palm estates from Dutaland Bhd for RM830 million.

In a filing to the stock exchange yesterday, IOI said the planned purchase will help expand the group's agriculture landbank in Malaysia by 7 per cent to 190,862ha.

"This is the best price we can get. We negotiated for many months," said IOI Corp executive chairman Tan Sri Lee Shin Cheng, who is known to enjoy bargain hunting.

"We like this block because it's adjacent to our existing plantation in Sabah," Lee told Business Times yesterday.

Still, the tycoon contended that there is hard work down the road as IOI will need to rehabilitate the estates as the current yield is very low.

IOI is known in the industry as a very efficient planter.

Its estates are mostly high yielding, with top performers churning out more than 30 tonnes of fresh fruit bunches (FFB) per hectare.

"The yield is about 10 tonnes of FFB per ha, but we have the agronomic expertise to bring up the FFB yield to 18 tonnes in the first year, and 22 tonnes in the second year," he said.