KL Kepong to develop RM1.6b township in Sg Buloh
Posted on | April 26, 2007
By THE EDGE
Kuala Lumpur Kepong Bhd (KL Kepong) will launch its 404ha integrated township in Sungai Buloh early next year as the first step in unlocking the value of its 2,828ha plantation land identified for property development in that area.
Its director Datuk Lee Hau Hian said the new township, which would have an eventual gross development value of RM1.6 billion, would keep the company busy “for a few years at least”.
Speaking to reporters after a signing ceremony to launch its five-year Sukuk Ijarah Islamic Commercial Papers (ICP) / Islamic Medium Term notes (IMTN) to raise RM500 million in Kuala Lumpur on April 25, Lee said property development was not new to the company, as it had carried out other such developments before.
The property projects developed by KL Kepong include the Sierramas development via a joint venture in Kumpulan Sierramas (M) Sdn Bhd, and the ongoing 92.9ha Desa Coalfields mixed development. Both the projects are in Sungai Buloh.
“The available land in Sungai Buloh can be developed over the next 10 to 20 years, and the type of properties to be developed would depend on the demand,” he said.
On the private debt securities, Lee said up to RM210 million from the proceeds of the issue would be used to refinance its existing bank borrowings while the rest to finance future Syariah-compliant investments and working capital requirements.
Aseambankers Malaysia Bhd and CIMB Investment Bank Bhd are joint lead arrangers as well as joint lead managers and joint book runners for the Sukuk Ijarah programme.
The Sukuk Ijarah programme allows KL Kepong to issue ICP and/or IMTN of different tenors to meet its short- to medium-term funding requirements, with the flexibility to issue ICPs in tenors of below 12 months and IMTNs in tenors of one year to five years.
Lee said the proceeds from the issue would also allow the company to continue with its plantation expansion plans and further downstream development of its oleochemicals and resource-based manufacturing activities.
“Our plantation landbank will increase to 205,000ha upon completion of our recent proposed acquisitions of 22,000ha in central Kalimantan.
“Over the next few years, we hope to increase our total landbank to 250,000ha with future acquisitions coming mainly from Indonesia. At the same time, our goal is to continue to plant up between 10,000ha and 15,000ha annually in Indonesia,” he said.
Lee said the company was optimistic that crude palm oil prices would remain around RM2,000 per tonne for the rest of the year, supported by continued demand from growth in edible oil usage in China and India, as well as from the biodiesel sector.
“The continuing trend of replacing non-renewable petroleum-based products with oleo-based products extracted from renewable vegetable oils would also support our optimism,” he said.
On its acquisition of Swiss-based Dr W Kolb Holdings AG, a specialty oleochemical holdings company, last December, Lee said it was part of its downstream integration and that the company was synergistic with its oleochemical operations, adding that it enabled KL Kepong to develop immediate market penetration in Europe.
He said KL Kepong would supply fatty alcohol and fatty acids to Kolb from its new fatty alcohol plant being commissioned at Westport, Port Klang, and expected its annual worldwide oleochemicals production capacity to reach 772,000 tonnes by year-end.
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