Malaysia, RI firms sign deal on palmoil

Malaysia, RI firms sign deal on palmoil

KUALA LUMPUR (AFP): Tradewinds (Malaysia) Bhd. has sealed a deal with Indonesia's Sadin Group to develop an oil palm plantation in Indonesia, signaling what analysts said yesterday was a rising tide in Malaysian-Indonesian cross-border investments.

Tradewinds, a consumer product counter listed on the local bourse, through its wholly-owned unit Tenaga Lestari (M) Sdn. Bhd., is to take up a 56 percent stake in the joint venture deal with Sadin Multiagro Sentosa to develop 20,000 hectares (50,000 acres) of land for oil palm cultivation.

Sadin Multiagro, a subsidiary of timber and plantation company PT Satia Dinamis Corporatama will own the balance in the joint- venture firm called PT Sadin Tradewinds Indonesia, Tradewinds said on the weekend.

The joint venture company will be initially capitalized at US$2.4 million, which will be raised to $12 million over six to eight years.

Tradewinds said the total development cost of the project was estimated at 150 million ringgit ($60 million). The plantation has a potential yield of some 120,000 tons of crude palm oil a year.

This is the Tradewinds group's second joint-venture company formed with a foreign party. The first was a property development company in Singapore.

The recent entry of Malaysian companies in a big way into Indonesia was spearheaded by listed conglomerate Renong Group when it set up a $100 million venture capital company with Bank Rakyat Indonesia in Indonesia in July.

This followed a move in June by Indonesian timber tycoon Prajogo Pangestu to take control of a Malaysian listed concern, Construction and Supplies House Bhd, in a transaction valued at $1 billion.

In the same month, another Malaysian listed firm, Kretam Holdings Bhd., signed a deal with Indonesia's PT Ira Widya Utama to invest 300 million ringgit ($116 million) over 10 years in a 40,000 hectare (100,000 acre) oil palm plantation in North Sumatra.