Wijaya Baru seeks partner for Indonesian venture

Wijaya Baru Global is in talk with Malaysian entities for a possible joint cultivation venture

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Petaling Jaya: Wijaya Baru Global Bhd (WBG), which has clinched a deal to log and clear 80,000 hectare of land in Indonesia to make way for an oil palm plantation, will seek partners for the cultivation venture. Chief executive officer Datuk Faizal Abdullah said the company is in talk with Malaysian entities for a possible joint venture. Early this month, WBG signed two deals to buy Suffolk Pte Ltd (SPL) and Wealthgagte Pte Ltd (WPL) for US$40 million (RM124.4 million) each. SPL has a joint-venture deal with PT Trimegah Karya Utama, where it has been granted exclusive rights to extract and sell timber in the district of Jair, Regency of Boven Digoel, Province of Papua, Indonesia on 40,000ha. Similarly, WPL also has a joint-venture deal with PT Manunggal Sukses Mandiri where it will have rights to another 40,000ha of land adjacent to SPL's land. Timber activities can only happen after it receives an approval letter from Indonesia's Forestry Ministry. After issuing the approval letter, the National Land Authority will issue the rights to plant oil palm trees on the same land. In June this year, WGB appointed Datuk Che Abdullah@Rashidi Che Omar to its board. He has some 37 years of experience in the plantation industry. Faizal feels that his appointment will help steer the group in the right direction, in terms of roping in a partner and establishing WBG's expertise in oil palm. WBG, which has 20 years of experience in the timber business, expects to set up a joint venture that will see the plantation company holding a majority stake in it. Faizal said once WBG gains expertise in this field, it may consider venturing into oil palm cultivation on its own. However, he added that since Che Abdullah is a non-executive director at Sime Darby Plantations, WBG is unlikely to form a joint venture with Sime as it would be a conflict of interest. According to Faizal, the likely scenario could see WBG divide the land into few blocks of possibly 10,000ha each. "The land is huge ... from the north to south it is about 30km and from east to west, roughly 60km," he said. The entire clearing of the land has to be done within six years.