Oriental buys 90% of PT Sumatera Sawit Lestari

PETALING JAYA: Oriental Holdings Bhd’s (OHB) unit OBS Pte Ltd has acquired a 90% stake in PT Sumatera Sawit Lestari (PTSSL), which holds a concession to develop oil palm plantation on a 8,000ha land in South Sumatera, for RM2.84 million.
This is after it obtained approval from Indonesia’s Law and Human Rights Ministry for the acquisition of the stake from PT Tradisi Bina Usaha (TBU) and Saksono Boenjamin (SB).
Following the shares subscription agreement, TBU will hold the remaining 10% stake in PTSSL.
In a stock exchange announcement yesterday, Oriental Holdings said OBS use internally generated funds to purchase the stake.
OBS is a unit of Oriental Boon Siew (Mauritius) Pte Ltd (OBSM) which in turn is a 50.5% unit of OHB.
OHB said the acquisition was consistent with its strategic plan to expand its planted land holding in Indonesia.
It noted that the land is located strategically next to existing concessions owned by two other subsidiaries of the group.
“This expansion of upstream activities will enhance value chain and allows the group to derive synergies through enhanced operations and optimization of costs across all its plantations through sharing of common resources and expertise. In turn, this will help the group strengthen its position in the palm oil and agribusiness industry,” it said.
OHB added the acquisition, together with its existing planted area, will enable it to have its fourth CPO (crude palm oil) mill in Indonesia and the first CPO mill in South Sumatera concessions and yield a quality asset that would enhance the group’s competitive edge.
“It would also reinforce the group’s standing as a key plantation player in Indonesia,” it said.
Moving forward, OHB said the subscription is expected to improve the future earnings of the group resulting from the cultivation and harvest of palm oil trees on the lands.