beyondbrics

By Paul Francis-Grey of mergermarket

Noble Group’s acquisition of a 51 per cent stake in PT Henrison Inti Persada of Indonesia marks the commodity company’s first foray into palm oil production and is a growing indication of the appeal of south-east Asia’s agriculturally-rich regions.

The Hong Kong-based firm intends to develop around 32,500 hectares of land for palm oil production in Sorong Regency, West Papua Province, Indonesia.

PT Henrison Inti Persada develops palm plantations in Sorong, and is part of the Kayu Lapis Indonesia Group – the biggest forestry and plantation operator in the region.

With demand for palm oil surging, Noble’s latest investment is unlikely to be its last. As Noble’s group executive chairman, Richard Elman put it:

“This move into palm oil plantations will complement our global agriculture and energy businesses. Our operating experience in Indonesia should prove to be an asset in helping us manage this and future projects”.

Noble is no stranger to Indonesia – it already owns three coal assets and two cocoa warehouses. But the company’s more recent acquisitions have focused on the US and Australia, with several investments in the coal and metals sectors.

While the company does already hold a number of oilseed processing plants in Asia, the move into palm oil could mark a change of direction as Noble Group secures a foothold in the palm oil market. It could set the precedent for other diversified commodity companies to follow in Noble’s footsteps.

PT Henrison Inti Persada’s plantation could be valued at approximately $162m, according to the SG Value Stocks blog, though it did not give sources. It was not disclosed who acted as advisor for either party during the deal.