LONDON: The board of M.P.Evans, the producer of sustainable palm oil, announced, in line with its growth strategy, the acquisition, for cash, of additional planted land, adjacent to the Group’s Simpang Kiri estate, in Indonesia.
The Group has been successful in acquiring 100% of the shares in two Indonesian companies, PT Teunggulon Raya and PT Dharma Agung, which between them own 2,100 hectares planted with oil palm. All the land being acquired is fully titled, with long leaseholds already established with the Indonesian government, in a similar way to the Group’s existing properties.
The planted land is close to the Group’s Simpang Kiri estate in Aceh Province, Northern Sumatra. Total costs associated with the acquisition, including the assumption of liabilities within the companies acquired, are estimated to be US$14.3 million, giving rise to a purchase cost of US$6,800 per hectare. The Group does expect to replant some of the acquired areas in the near term, as part of its plans to bring them up to Group standards.
Following the acquisition, the Group will have an expanded planted area of 4,800 hectares at or around the Simpang Kiri estate, and the potential to build its own palm-oil mill there. If one is developed, the Group would reach a position of processing 100% of its own crop, as well as further increasing its sustainable palm-oil production.
Commenting on the acquisition, Peter Hadsley-Chaplin, executive chairman, said: “This is an excellent acquisition, fully in keeping with our stated strategy and supported by the strength of the Group’s balance sheet. Thanks to a combination of the good price at which it has been secured, and the added scale it gives the Group around Simpang Kiri, these additional hectares are further fuel for the M.P.Evans growth engine.”