Jakarta freezes KL investments

Jakarta freezes KL investments

KUALA LUMPUR (DPA): Indonesia has imposed a temporary freeze
on new Malaysian investments in oil palm plantations there
because of overwhelming investments in that sector, a Malaysian
official said.

Primary Industries Minister Lim Keng Yaik said he was informed
of the freeze during a visit to Jakarta last week, Bernama
national news agency quoted him as saying in Penang island.

Lim said the Indonesians imposed the freeze to allow the palm
oil sector to consolidate following an influx of investments,
especially from Malaysia.

So far, 27 Malaysian companies have inked joint venture
agreements with Indonesian firms to develop about 1.5 million
hectares of land for oil palm cultivation.

Malaysia is the world's biggest producer of palm oil, with an
estimated output of 8.04 million tons last year, while Indonesia
is in second place, producing slightly over half of that amount.

Lim said the move was a signal that Indonesia will no longer
encourage acquisition of land by foreign investors.

He did not expect the freeze to hamper Malaysia's plans to
seek tie-ups in oil palm cultivation with foreign partners,
adding that he will be leading a trade mission in April to
Africa, Latin America and Pacific island nations to scout for new
markets.

The Malaysia government is encouraging its oil palm plantation
firms to open up ventures abroad in countries like Indonesia, the
Philippines and Latin America because of a severe labor shortage
at home, and also to ensure a continuous supply of raw material
for the country's palm oil-based industry and refineries.