Monday, August 29, 2011

Lion Forest Industries' RM78.3m Cambodian investment

KUALA LUMPUR: LION FOREST INDUSTRIES BHD [] (LFIB) is acquiring 58,000 hectares under an economic land concession (ELC) in Cambodia for US$26.1 million (RM78.3 million) to cultivate oil palm and rubber trees.

LFIB said on Monday, Aug 29 the concession would not be less than 70 years under the master service agreement.

It said its unit Harta Impiana Sdn Bhd had on Aug 29 issued an instruction notice to Seng Enterprise Co. Ltd, identifying six parcels of economic land concession.

'Seng Enterprise will assist six wholly-owned subsidiaries of Harta Impiana which are incorporated in Cambodia to procure from the Royal Government of Cambodia the concession rights to the ELC of the identified land for a concession period of not less than 70 years,' it said.

LFIB said the land cost was US$450 (RM1,350) per ha and the total land cost was about US$26.1 million.

Explaining the rationale for the acquisition, LFIB said after selling its tyre operations both in Malaysia and in China, the group has been studying and identifying a new core business.

'The proposal allows the LFIB group the opportunity to tap into a new core business and also to diversify its earnings stream by investing in lands for the purposes of PLANTATION [] of rubber and/or oil palm,' it said.

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