20/19/05 NEW DELHI (Bloomberg)  -   Kumpulan Guthrie Bhd., a Malaysian plantation company, said it spent 10 million ringgit ($2.6 million) on its first palm fruit research center in Indonesia, as it seeks to expand its operations in the country.

Kumpulan will conduct research in plant breeding, agronomy, fertilizer and crop protection practices, it said in an e-mailed statement on Monday.

Kumpulan Guthrie is increasing productivity of palm fruit as it seeks to lower costs and compete with rivals such as PT Astra Agro Lestari, Indonesia's largest publicly traded plantation company. Kumpulan is producing as much as 16 tons of palm in a hectare of land compared with 10 tons a year earlier. Yield mayincrease to 24 tons by 2007, the statement said.

Kumpulan Guthrie owns 54 plantation estates in an area of 216,911 hectares in Indonesia and 17 mills, the statement said.

Malaysia and Indonesia produce 80 percent of the world's palm oil, which is processed into cooking oil and margarine and into chemicals used in soap. (**)