Dutch Rabobank to boost financing in Indonesia

Dutch Rabobank to boost financing in Indonesia

SINGAPORE (Reuter): Dutch cooperative Rabobank plans to expand
its syndicated loan business in Indonesia in other Southeast
Asia's countries to top the US$500 million it posted in 1996, a
senior official said on Thursday.

Rabobank general manager Hans Hannaart told Reuters the bank
did $500 million in syndicated transactions, mainly in the food
and agri-business sector, last year.

"We certainly hope to improve on that number," Hannaart said,
adding Rabobank is looking into projects in the palm oil, poultry
and sugar industries. "We are (also) looking at the number of
sugar transactions in the region."

The poultry and meat industry in Southeast Asia and the animal
feed business to support it have grown sharply on the back of the
area's rapidly growing population and increasing affluence.

Increased consumption has transformed countries here into
large importers of corn, soymeal and wheat.

Growth in the vegetable oil and animal feed sectors has been
particularly strong, especially the flow of palm oil from leading
producers like Malaysia and Indonesia to the West and China.

Rabobank has moved aggressively into the palm oil industry and
was the lead arranger in a $95 million syndicated term loan
facility signed on Friday with P.T. Asianagro Lestari of
Indonesia, one of the biggest palm oil growers in the country.

"We do a lot of transactions in that sector, palm oil, because
we feel that palm oil in Indonesia is a very good sector,"

Hannaart said. "It will definitely become one of the top
export earners for Indonesia by the turn of the century."

Indonesia is particularly attractive because "they are the
lowest cost producer in the world (of palm oil). There is
increasing demand outside Indonesia for the product," he added.

Sukanto Tanoto, the chairman of RGM International and the
mother company of Asianagro, told reporters his firm planned to
use the proceeds of the loan facility to expand palm oil
cultivation in Indonesia sharply in the coming years.

"We expand about 40,000 hectares a year," he said.

Tanoto said the outlook for palm oil remains promising because
of strong Chinese buying.

"In the last five-seven years, the Chinese have been buying a
lot of palm oil. That's why palm oil prices have been reasonably
firm," he said.

Rabobank officials have previously said they had roughly a 60
percent share of the agricultural commodities trade finance
market in Southeast Asia.

Hannaart said the Dutch cooperative welcomes competition in
the market and expressed confidence Rabobank can maintain its
position as the leading institution in commodity financing in the
region.

Expansion in the commodity finance business has attracted
other banks into the sector although it continues to be dominated
by Dutch firms such as MeesPierson and ING Bank and French banks
such as Societe Generale.