5/6/06 (Bloomberg) JAKARTA: PT Indofood Sukses Makmur, the world’s biggest instant- noodle maker, may sell shares of its palm oil units as surging demand for the commodity in India and China drives up prices.

“We know that there is much investor interest in this sector,” Anthony Salim, president of Indofood, said in Jakarta last Friday, without giving more detail on the proposal.

“We are seriously considering doing an initial public (IPO) offering for our crude palm oil business, ” he said.

Rising incomes are changing tastes in India and China, the world ’s biggest buyers of palm and soyabean oils, increasing demand for palm oil.

Prices in Rotterdam have risen 17 per cent after falling to a two-year low in August.

The palm oil business accounts for about 16 per cent of Indofood’s sales, Anthony said.

“The IPO plan could help Indofood fund a plantation expansion plan,” said Erwan Teguh, head of research at PT Danareksa Sekuritas.

“They may sell shares of companies in the commodity side of the business, not the branded side,” he added.

Indofood may have to merge some of its units before selling them in a public offering, said Kevin Sietho, a deputy director at the company.

“The timing is good now as all Indonesian plantation companies get high valuation. We would like to take advantage of that.” The company plans to spend 200 billion rupiah (100 rupiah = RM0.04) to expand its palm plantations this year, Anthony said.

The company also plans to spend a further 500 billion rupiah this year for other investments, Thomas Tjhie, a director of the company, told reporters last Friday. —Bloomberg