Kumpulan Guthrie Bhd (KGB) keeps expanding its plantation business in Indonesia with the acquisition of another 20,000 hectares of oil plantation land, Malaysia’s Bernama reported.
Guthrie is Malaysia’s largest plantation group. Its group chief executive Datuk Abdul Wahab Maskan said besides the conducive climate offered by Indonesia, the investment was part of a strategic move to expand its business.
“The existing landbank we have in Sumatera, Kalimantan and Sulawesi amounts to 220,000 hectares with 170,000 hectares planted with oil palm,” he said.
The Guthrie entered Indonesia’s plantation business in 1995 with the establishment of a to develop oil palm plantation in Palembang, South Sumatra. But it’s major investment started in a big way in 2001 with the acquisition of Salim Group’s assets (265,000 hectare) from Indonesia Bank Restructuring Agency (IBRA) for US$368 million in 2001.
Guthrie operates 17 mills in Indonesia with output of 473,000 tones of CPO and 81,000 tones of PKO in 2004, bigger than its combined Malaysian output.
The Star reported in June that Kumpulan Guthrie Bhd plans to list its Indonesian plantation business next year as part of its efforts to pay down debt.
In 2005, its Indonesian unit generated operating profits of RM146mil, accounting for just over half of the group’s overall plantations business.
Guthrie has RM2.95bil in borrowings and Wahab said the firm wanted to cut that to RM2.5bil, using cash from the initial public offering of shares in the Indonesian unit and also from the sale of a highway concession.
In the same month, Business Times reported that Guthrie was studying a possible venture into the biodiesel industry, building a plant either in Malaysia or Indonesia.
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