Kulim to expand plantation land by 40pc

by **hlk** Tue 16 Aug 2011, 22:54

Kulim (Malaysia) Bhd announced two strategic exercises that will see it expanding its plantation land in Malaysia by 40 per cent to 48,100 hectares and raising the number of its palm oil mills
from three to five.

In a statement, Kulim said the first exercise would be its proposed acquisition of six parcels of oil palm plantation land totalling 13,687 hectares and two palm oil mills in Johor for RM700 million from Johor Corporation (JCorp).

The acquisition will be funded by internally generated funds and external borrowings, it added.

Kulim managing director, Ahamad Mohamad said Kulim has been managing these estates for JCorp since 1975, and has persistently pursued the possibility of an outright purchase.

In the second exercise, Kulim has proposed to privatise its 75 per cent subsidiary, Sindora Bhd, by offering to acquire the remaining 23.5 million Sindora shares that it does not own via a voluntary general offer of RM3.00 per Sindora share.

Sindora assets that are synergistic to Kulim are its 6,165 hectares plantation estate in Kluang, Johor, of which 5,279 hectares are planted.

Sindora also has a palm oil mill in the estate, said Kulim.

The two exercises will increase Kulim's total planted oil palm hectarage, locally and internationally, to 124,256 hectares compared to 112,224 hectares now.

Kulim is the plantation arm of JCorp, which is Johor State's government-linked corporation.

In a separate statement, JCorp Chairman Datuk Abdul Ghani Othman said the two exercises marked the start of JCorp group's restructuring exercise.

The move is in line with the strategic recommendation of the group's Investment Committee to streamline JCorp's businesses and assets into distinct business units, the Johor Menteri Besar said.

The exercises will also enable JCorp's debts to be addressed.

He said JCorp group will review and restructure its debt position to ensure that all core businesses are adequately funded, and its debt capital efficiently employed.

Specific initiatives will be announced in due course, Abdul Ghani added. -- Bernama