16/5/07 (BUSINESS TIMES) -- IOI Corp Bhd boss Tan Sri Lee Shin Cheng has fuelled market talk that he is after Genting Bhd's plantation unit, Asiatic Development Bhd, when he did not deny this yesterday.

"That is a sensitive question. I think I shall avoid it," Lee said, and laughed when he was asked whether IOI was keen to buy Asiatic.

Genting, a casino and power plant operator, told the stock exchange on February 23 that it had no plans to sell its 55 per cent stake in Asiatic. The plantation unit has a market value of some RM4.5 billion.

"We look into opportunities from time to time. As you are aware, big plantation areas are hard to come by because of the (prohibitive) price," Lee told reporters after the company's extraordinary general meeting in Putrajaya.

"We're looking for a big chunk of land. We can raise the funds for it," he said.

When asked the size of the land IOI is eyeing, he replied: "I can't say anything unless we've signed on the dotted line." In a news report earlier, IOI executive director Datuk Lee Yeow Chor had said that the group prefers to buy established oil palm plantations as big as 50,000ha, and does not discount expanding into Indonesia.

Asiatic's landbank in Malaysia is 65,664ha. In Indonesia, it has a 70:30 joint venture with the Sepanjang Group to develop 98,300ha of unplanted land.

Currently, IOI's landbank is 167,689ha, of which more than 90 per cent is already planted.

If IOI were to buy Asiatic, their combined plantation landbank would be 320,000ha, making IOI the world's third largest by landbank, after Synergy Drive Bhd and Singapore's Wilmar International Ltd.

Synergy Drive, a newly-formed Malaysian entity backed by the Government, agreed in January to buy Sime Darby Bhd, Kumpulan Guthrie Bhd and Golden Hope Plantations Bhd to become the world's biggest oil palm company owning 600,000ha of oil palm estates in Malaysia and Indonesia.

Asked if IOI was worried about the emerging competition that big-sized Synergy Drive poses, Lee said: "We're not worried (because) it is all about friendly competition. This is good for everyone as we all strive to become better. In fact, I would like to congratulate Synergy Drive." Although IOI's plantation landbank is considered medium-sized, it is already the most efficient palm oil producer in the world.

It is squeezing out six tonnes of crude palm oil (CPO) per hectare per year, way above the industry's average of four tonnes.

Shares of IOI closed unchanged at RM27.25 yesterday. Asiatic also closed unchanged at RM6.