New joint venture for oil palm plantation
New joint venture for oil palm plantation
JAKARTA (JP): Malaysia's Lembaga Urusan Tabungan Haji (LTH) signed an agreement here yesterday to acquire a 70 percent stake in PT Multigambut Industri, which will establish palm oil plantations in Riau.
The agreement was signed by business tycoon Hashim S. Djojohadikusumo of Multigambut and Dato Hj. Abdul Latif Bin Hj. Mohd. Hassan of LTH.
The signing of the agreement was witnessed by Dato Dr. Abdul Hamid Othman, an official of the Malaysian prime minister's office.
Under the agreement, state-owned LTH, through its subsidiary, Bonggaya Plantations Sdn. Bhd., will invest M$566 million (US$224 million) in Multigambut, which is owned by Hashim, Siti Hediati Prabowo and Siti Hutami Adiningsih. The latter two are daughters of President Soeharto.
Hashim, who will remain as Multigambut's president, will be assisted by two directors, Jojo C. Policar and Badai S. Daniel, while Hediati and Hutami will assume positions as commissioners. LTH's chief executive officer, Abdul Latif, will serve as Multigambut's new chief commissioner.
The new plantation, which will be supported by a palm oil factory, is expected to produce 400,000 tons of crude palm oil a year.
Hashim said the conversion of peat areas into plantations and the planting of palm oil trees will start in the beginning of next year.
He said 10,000 palm oil trees will be planted each year in the next six to eight years.
Multigambut was established in 1988 by Hashim together with Hediati and Hutami. The company started its operations in Riau by converting some 100,000 hectares of peat areas into palm oil plantations.
Hashim said the funds from LTH will enable Multigambut to acquire 83,622 more hectares of land for plantations.
LTH was established under Malaysia's 1995 Tabung Haji Act which allowed the state firm to invest outside Malaysia. In Malaysia, LTH, through its subsidiaries, has shares in a number of plantation businesses, particularly palm oil plantations.
According to Latif, this will be LTH's first step in expanding its operations outside Malaysia. (pwn)