MP Evans Buys Indonesian Palm Oil Plantation for US$88M
MP Evans announced it has agreed to acquire Sunrich Plantations Pte Ltd - which owns PT Bumi Mas Agro, the holder of an oil palm plantation in Indonesia spanning 10,000 hectares - for US$88 million in cash and the assumption of US$20 million in debt.
Of the total land, 8,240 hectares are under a 35-year renewable license. Of this area, 7,400 hectares are young oil palms planted between 2012 and 2016, while another 400 hectares are in the process of being developed and planted. The purchase prices is based on a per-planted hectare valuation of US$13,200.
As per Indonesian law, under the terms of the deal, a minimum of 20 percent of the hectarage, or 1,300 hectares, are dedicated to a smallholders’ scheme. The land will be sold to a smallholder co-operative with the land to be managed by MP Evans, and all fruit produced to be bought by the group.
Future plans include the construction of a palm oil mill to process the fruit from both MP Evans’ land and the land being used by the smallholder co-operative, which MP Evans estimates will total 270,000 tons per year within 10 years, and the registration of the plantation with the Roundtable on Sustainable Palm OIl.