02/10/2007 (The Edge Daily), KUALA LUMPUR - TDM Bhd has entered into a joint-venture (JV) and shareholders agreement with Indonesian Bapak H Rahman to develop oil palm plantations and operate oil palm businesses in Indonesia.

Announcing the deal yesterday, TDM said the JV company, PT Rafi Kamajaya Abadi, intended to invest a total of RM118 million to develop and operate the oil palm plantations businesses on 10,000 hectares in West Kalimantan. TDM will have an 80% stake in the joint venture and the rest by Bapak H Rahman.

“We believe the collaboration with Bapak H Rahman will enable us to explore the opportunities in venturing into the oil palm plantations sector in Indonesia thereby providing growth and strengthening the prospects of our group,” TDM said.

The company said its subscription of the initial new PT Rafi shares of RM2.8 million would be financed through internally generated funds.

The undeveloped land, to be leased to PT Rafi for 95 years, is expected to begin development into oil palm estates by year-end.

TDM said it was estimated to cost PT Rafi RM1,200 per ha in the form of procurement fees payable to H Rahman via a combination of 20% cash and an 80% issuance of new PT Rafi shares, and include the costs of all preliminary expenses.

TDM was optimistic of the outlook and growth prospects of its oil palm plantation given soaring crude palm oil (CPO) prices, its strong demand and Indonesia’s initiatives to become the world’s largest producer of CPO in the next five years, it said.