Golden Land to double plantation landbank

KUALA LUMPUR: Golden Land Bhd plans to acquire a 95% equity stake in Indonesia’s PT Tasnida Agro Lestari (TAL) for RM16.57 million, which will double its oil palm plantation landbank to over 20,000ha from 9,683ha presently.

The acquisition by Shinny Yield Holdings Ltd, a wholly-owned unit of Golden Land, will provide the company about 10,810ha in South Kalimantan. About 837ha of this are planted areas.

According to the company’s latest annual report, Golden Land currently owns 9,683ha of oil palm plantations. Of this, 86% or 8,337ha are planted areas close to which 85% has already matured. Another 276ha or 3.3% of the total planted area are due to be developed in the current financial year.

Golden Land said the recent acquisition would also allow it to expand its plantations abroad, as the scarcity of land and labour shortage in Malaysia posed challenges for it to grow domestically.

Sabah-based Golden Land, which owns 9,683ha of oil palm estates, plans to increase its plantation landbank to over 20,000ha with the acquisition of an Indonesian firm.

The company added that quality agricultural land in Malaysia had become very costly and difficult to acquire.

“With demand on the rise, especially from major consuming countries such as India and China, the global dependence on palm oil will continue to drive strong business growth for Golden Land.

“Hence, we are committed to growing the company and focus on the palm oil business, seizing every opportunity to expand our oil palm locations, both domestically and internationally,” said the company in its last annual report.

In August 2011, the company spent RM8.8 million to purchase PT Sumber Serasi to reap 4,913ha of plantation land in Indonesia. It said the land would be developed over a period of five years.

Golden Land said the recent acquisition would be paid for with internally generated funds and bank borrowings.

It added the acquisition was not subject to approval from its shareholders, though it was conditional to approval from relevant authorities in Indonesia.

Golden Land posted a net profit of RM23.8 million for 1HFY11 ended December 2010 against RM15.3 million in the previous corresponding period. Revenue was higher at RM135.35 million against RM120.7 million.

For FY11 ended June 30, the company saw net profit jump over four-fold to RM33.2 million from RM7.5 million the previous year thanks to the 35% increase in the price of crude palm oil during the period.

The plantation revenue registered its highest level to RM261.1 million in FY11 due to the increase in overall average prices.