Ta Ann enters into JV for oil palm projects

PETALING JAYA: Ta Ann Holdings Bhd, which lost a legal battle to native owners in Sarawak over customary land last year, is making a second attempt at expanding its palm oil landbank in the state via a joint venture (JV).
Ta Ann's plans to collaborate with the Sarawak state government and Native Customary Rights (NCR) owners to implement oil palm development projects spread over 28,195 ha in the state.
Ta Ann's unit, Ta Ann Plantation Sdn Bhd (TAP), yesterday entered into two JV agreements with Pelita Holdings Sdn Bhd (PHSB), the trustee to the NCR owner, to develop 17,017 ha in Sibu and 11,178 ha in Kapit.
In a Bursa Malaysia announcement yesterday, Ta Ann said the projects are "replacement" projects for the failed project entered into in Sept 28, 2012 between TAP and PHSB with the land owners owners at Matu-Daro, Mukah division; Tambirat-Asajaya, Kota Samarahan division; and Sebuyau Sebangan, Kota Samarahan division, all in Sarawak.
"Due to the lack of interests by the land owners in the projects under the 2012 agreements, both PHSB and TAP decided not to proceed with the projects under the 2012 agreements and to revoke the 2012 agreements by mutual consent," Ta An said.
Ta Ann will hold a 60% stake in the new JV, while PHSB as trustee of NCR owners and PHSB by itself, will have 30% and 10% respectively.
"The JV agreements will enable the group to further increase its total acreage of oil palm plantations. This is in line with the group's aim of continually expanding its oil palm division to achieve greater economies of scale and to broaden its earnings base," Ta Ann said in a filing with the stock exchange.
It added that the participation of PHSB will enhance the viability of the projects. It said that PHSB has vast experience in facilitating JVs between private sector investors and NCR owners. It is also well versed in the procedural requirements for the implementation of such projects.
"The JV agreements are not expected to contribute to the earnings of Ta Ann for the financial year ending Dec 31, 2015. However it is expected to contribute positively in the future years, when the mature oil palms are producing fresh fruit bunches," Ta Ann said.