31-08-2007 (The Edge Daily) - KUALA LUMPUR: Glenealy Plantations (Malaya) Bhd is set to expand its oil palm plantation business in Sarawak with the proposed sub-licensing of a 21,123ha oil palm compartment in Bintulu and 40,684ha tree plantation compartment in Bintulu and Kapit for RM19.2 million and RM21.6 million respectively.

Announcing the deal yesterday, Glenealy said that its subsidiary, Timor Enterprises Sdn Bhd (Timor), had entered into the sub-licence agreements with Samling Reforestation (Bintulu) Sdn Bhd (SRB) for the Jelalong Plantation in Bintulu and Lana Plantation in Kapit.

The Jelalong Plantation sub-licence — which is expected to incur a development cost of RM464.7 million or RM22,000 per ha upon completion in 2015 — has granted Timor the right to establish, develop and maintain planted oil palms on the oil palm compartment for 25 years.

The total annual land rental cost and licence fee payable for the oil palm compartment amounted to RM2.7 million over 25 years, Glenealy added.

These costs will be borne entirely by Timor

Meanwhile, under the Lana Plantation agreement for which Timor holds the licence, SRB will establish, develop and maintain planted trees until 2058 where the total annual land rental cost and licence fee payable is RM5.2 million for 25 years.

Glenealy said it remained positive on the group’s outlook, attributing it to the expected continued growth in the demand of edible oils, efforts undertaken by the Malaysian Palm Oil Board to expand and diversify the country’s palm oil export markets and the expected growth of the agriculture sector.