JAKARTA, April 7 (Bernama) -- Malaysia's plantation giant, KumpulanGuthrie Bhd, will allocate about US$100 mill. over the next two years toincrease the output of its oil palm operation in Indonesia.

The group's chief executive, Tan Sri Khalid Ibrahim said that Guthrie wassatisfied with the performance of its 25 oil palm plantations inIndonesia, which it purchased from the Indonesian Bank RestructuringAgency (IBRA).

"Our palm oil output from Indonesia is very satisfying. So we plan toinvest more money to set up mills and other facilities needed to boostproduction," he said as quoted by "The Jakarta Post."

Khalid was in the country over the weekend to attend a seminar onagroindustry here.

He said when the group purchased the 25 oil palm plantation in April 2001,total output was about 200,000 tonnes per year and it had increased to300,000 tonnes by March this year.

He said with the new investment, output was expected to jump to 450,000tonnes this year and 600,000 tonnes by next year.

Guthrie paid some US$368 million for the oil palms plantations, whichcover a total area of more than 260,000 hectares in Sumatera, Kalimantanand Sulawesi.

IBRA took over the plantation in 1998 from a local conglomerate the SalimGroup, after it ran into trouble following the economic crisis that hitthe country since a year earlier.

The plantation was part of the group's repayment deal for its debts to thegovernment under a mechanism operated by IBRA, which was tasked withdisposing of assets to help finance the state budget deficit.

Indonesia, with vast track of fertile land, is the world second largestpalm oil producer after Malaysia.

-- BERNAMA