KLK makes foray into Liberia

KUALA LUMPUR: Kuala Lumpur Kepong Bhd (KLK), one of Malaysia's top five plantation companies, will venture into Liberia to expand its oil palm land beyond Malaysia, Indonesia and Papua New Guinea.

KLK, yesterday, said it had sealed a cash deal with Singapore's Biopalm Energy Ltd to buy a 50 per cent stake in Liberian Palm Developments Ltd (LPD) for US$17.4 million (RM55.3 million) and a 20.1 per cent stake in Equatorial Palm Oil Plc for US$3.2 million, both from Singaporean stock exchange-listed Biopalm Energy Ltd.

KLK will also take on LPD’s US$608,000 loan from Biopalm Energy. The remaining 50 per cent stake in LPD is held by Equatorial, which is listed on the London Stock Exchange's Alternative Investment Market. 

"The acquisition is in line with KLK's strategy to expand its plantation landbank outside Malaysia and Indonesia for geographical diversification into the West African nation where there is a net deficit of edible oils.

"LPD's concession land is also agronomically suitable and located within 50km of deep-water ports," KLK said in its filing to Bursa Malaysia.

The proposed acquisitions will be financed by KLK's internally generated funds and is set to be completed in two weeks.

LPD's subsidiaries hold two 50-year concessions with 45 years remaining awarded by the Liberian government to rehabilitate and develop 25,547ha oil palm plantations, of which 3,750ha have been planted. A further 61,111ha have been earmarked for future joint expansion.