Publicly listed PT Bakrie Sumatera Plantations plans to add 50,000 hectares to its oil palm plantation by 2010 with an investment of US$260 million.
"Thirty-million dollars will be financed by equity from Bakrie Sumatera's new subsidiary PT Bakrie Sentosa Persada (BSP), $80 million from an international consortium equities and the remainder with bank loans," president director Ambono Janurianto said Wednesday.
Bakrie Sumatera established the palm oil producer BSP in June 2007.
Ambono said the expansion area, located in Central Kalimantan and Riau, Sumatra, was expected to contribute a profit of $100 per hectare, totaling $5 million per annum.
Bakrie Sumatera now operates 87,415 hectares of plantation, with 67,745 hectares for oil palm and the rest for rubber.
Ambono said the holding company aimed to expand its plantation area to 200,000 hectares by 2011.
Bakrie Sumatera, the country's fifth-largest plantation owner by value, booked a 794 percent increase in its first quarter net profit to Rp 18.5 billion (US$1.99 million) over the same period last year.
"The year 2007 was really a great year for palm oil and natural rubber as prices surged to levels never reached before," said president commissioner Soedjai Kartasasmita.
In 2007, the world crude palm oil price reached $600 to $800 per ton up by 100 percent from 2006.(rff/**)