First Resources

The palm oil maker has a US$500m investment plan to raise production and buy plantation land amid an ongoing palm oil boom. The company has about 180,000 hectares (ha) of plantations concentrated in Indonesia's Riau province, and is looking to purchase at least 50,000 ha within the next 18 months in Kalimantan or Irian Jaya.

First Resources CEO Ciliandra Fangiono said the company expects world consumption of palm oil to grow by 5% next year and that palm crude oil prices would stay firm at above US$1,000 per tonne. The firm is planting on 87,500 ha of its existing land, and wants to add 10,000 ha of planted land every year, Mr Fangiono said.

But land acquisitions will likely come outside its base in Riau. The company aims to buy plots of at least 50,000 ha in size to justify building facilities such as mills and cut transportation costs.

Mr Fangiono said First Resources, whose key crude palm oil customers include Wilmar International, will fund its expansion mainly through existing cash, at US$185m as of end-Mar, and excess cash flow from sales.