London-listed palm oil producer MP Evans has acquired 8,350ha of oil palm plantations in Indonesia from PT Agro Bumi Kaltim (ABK) and PT Nusantara Agro Sentosa (NAS) for US$60M.
The acquisition by MP Evans subsidiary PT Evans Indonesia was subject to the completion of legal and regulatory formalities in Indonesia, which the group expected to be finalised before the end of this year, MP Evans said on 7 September.
ABK and NAS both own oil palm plantations in East Kalimantan and, between them, manage a total planted area of 8,350ha. This is made up of 4,973ha at ABK and 3,377ha at NAS, comprising a total of 6,664ha under direct ownership and 1,686ha managed on behalf of associated smallholder co-operatives.
Following the acquisition, MP Evans said it was expecting all the crop from ABK to be sent to the group’s Kota Bangun estate for processing at its mills while crop from NAS would be sent to an external mill.
Group chairman Peter Hadsley-Chaplin, commented:
“The addition of the estates at ABK and NAS to our portfolio … will bring our total area under management to over 65,000ha. We have been very keen to acquire more hectares close to Kota Bangun for some time, and having the ABK estate supplying its crop to our existing mills will further enhance our operational efficiencies.”
MP Evans said it was acquiring ABK and NAS from PT Palma Serasih Tbk, a listed Indonesian company with subsidiaries operating in the oil palm sector, which had other plantation interests in East Kalimantan.
According to audited accounts for the companies for the year ended 31 December 2022, ABK and NAS made losses after tax in the year of US$3M and US$2.6M respectively.
The group said it expected results from ABK and NAS – both estates with relatively young plantings – to improve as the areas matured and as management worked to improve agronomic standards on both estates.
Following the acquisition, MP Evans said it would work to include the acquired areas as part of its registration with the Roundtable on Sustainable Palm Oil (RSPO), in line with its continuing commitment to increase the proportion of its output that is certifiably sustainable.
According to its website, London Stock Exchange-listed MP Evans owns oil palm plantations in five Indonesian provinces - North Sumatra, South Sumatra, Aceh, Bangka-Belitung and East Kalimantan – and also has an investment in a property company in Malaysia.
Its oldest plantations are in North Sumatra and Aceh with newer projects developed in East Kalimantan, Bangka-Belitung and South Sumatra since 2005.