Mumbai, Jun 24 : Leading edible oil producer, K S Oils limited has acquired 35,000 acres of palm plantation in Indonesia for an undisclosed amount in continuation of its strategy of acquiring palm plantation assets in South Asia.
With this acquisition, K S Oils' palm plantation land bank assets in Indonesia stand at 85,000 acres with 50,000 acres being acquired in 2008, the Compnay said in a release.
The acquired land parcel is situated in Sumatra Island of Indonesia, which has one of the most fertile lands for environmentally sustainable palm plantations in the world and has the highest yield of CPO. The land is adjacent to K S Oils' current plantation and has been acquired through a joint venture with a local partner, who has a minority interest of 10 per cent.
Sumatra Island has significant palm plantation assets and investments from global edible oil and food companies like Cargill, Sime Darby Berhad, Golden Agri-Resources, IOI Corporation and other players. K S Oils is the first Indian company to join the list of international food companies to develop sustainable palm plantation assets in Indonesia to ensure steady raw material supply for its Indian consumer needs.
K S Oils, through its international subsidiary, K S Natural Resources Pvt Ltd., Singapore (KSNR), has planned an outlay of Rs 750 crore to acquire and develop palm plantations and related assets like CPO mills in South East Asia over the next three years. Till date, the company has invested Rs 90 crore in its palm plantation assets in the region.
From the current equity infusion of Rs 450 crore by three private equity players, New Silk Route, Citi Venture Capital, Barings Private Equity Asia and the Promoters, the company has allocated Rs 375 crores for buying and development of palm plantation and other assets in South East Asia. The balance Rs 75 crores will be used to double the refinery capacity of its Haldia refinery from 500 to 1,000 metric tonnes per day. The current purchase of 35,000 acres will be funded from the recent funds raised.
The company aimed to produce 150,000 tonnes of crude palm oil from its overseas plantations. This would form 50 per cent of the expanded capacity of refinery at Haldia.
The palm plantations will start producing CPO from the year 2012 and currently the first palm plantation is being readied.
The nursery, spanning over 100 acres and having a million saplings, is ready and is one of the most advanced and largest in the Sumatra region of Indonesia. Employing over 3,000 people in a direct and indirect way, it is creating a socio-economic impact by improving the lives of the locals in an economical and social way, the release added.