Malaysian company Felda Global Ventures has finalised a deal to buy 37% of PT Eagle High Plantations Tbk, the plantation company in which the Rajawali Group held the controlling stake. The company was created last year after Rajawali’s reverse takeover of BW Plantations.
It’s a huge deal. Felda Global Ventures claims to be the world’s third largest oil palm plantation operator and the world’s largest crude palm oil producer. Eagle High Plantations says it has permits on 419,000 hectares of land in Indonesia. This includes two oil palm plantations in Papua: PT Tandan Sawita Papua in Keerom Regency and PT Varia Mitra Andalan in South Sorong.
As part of the deal, Felda Global Ventures intends to take a 95% stake in Rajawali’s sugar operations in Merauke. That’s the two operational companies, PT Cenderawasih Jaya Mandiri and PT Karya Bumi Papua. There’s also a 93.3% share in Rajawali’s undeveloped concession PT Riski Kemilau Berjaya.
The sugar business is probably particularly interesting for Felda Global Ventures, which is Malaysia’s leading producer of refined sugar and has ambitions to “become ASEAN’s largest sugar hub”. Having plantations in Indonesia gives the company the right to import sugar to Indonesia, which currently does not produce enough sugar to meet its consumption needs.
Felda reportedly paid $67 million in cash for the sugar companies. This works out at around 18.7 million Rupiah per hectare. As a rough comparison, the upper limit for land compensation paid to indigenous people in Merauke is about 300,000 Rupiah – less than one sixtieth of what was paid in this transaction.