KLANG, Feb 15 (Bernama) -- Plantations company, Golden Hope PlantationsBhd is planning on increasing its hectarage of oil palm plantations inKalimantan, Indonesia to 50,000 hectares in the near future, its groupchief executive Datuk Sabri Ahmad said.

He said the company, which currently owned 20,000 ha of land inKalimantan, was in negotiations with a landowner there for the additional30,000 ha.

The decision to expand the oil palm plantations in Indonesia was made inview of the lower cost of production there compared with Malaysia, he toldreporters after attending the second meeting of the Roundtable Group WorkCriteria for the Sustainable Management and Production of Palm Oil, inCarey Island, near here, Tuesday.

Cost of production in Indonesia is between RM300 and RM400 for everymetric tonne of palm oil while in Malaysia it runs between RM500 and RM550per metric tonne, he said.

Golden Hope is Malaysia's second largest producer of oil palm fruits afterthe Federal and Land Development Authority (Felda). Its production in 2004was 14.2 million metric tonnes.

Sabri who is also the chairman of the Malaysian palm oil association, saidthat almost all oil palm plantations and mills in the country practicedsustainable agriculture methods and management in their respectiveoperations.

These included the use of natural anti-parasite measures and the use ofwaste or bio mass from oil palm as fertilizers.

He said these sustainable methods reduced the cost in the long term whileincreasing production.

While the cost of production might be high during the initial stages, itbecomes more cost-effective in the long term, he said.

-- BERNAMA