MP Evans subsidiary completes USD2 million acquisition of hectarage

MP Evans Group PLC on Thursday announced that its subsidiary completed an acquisition that it said provides a further source of long-term production growth.

The Tunbridge Wells, England-based company produces palm oil in Indonesia. It said its wholly owned subsidiary PT Evans Indonesia on Tuesday completed the takeover of the Indonesian plantation company PT Kalimantan Wahana Berjaya, known as KWB, for USD2.0 million.

MP Evans said KWB has 776 hectares planted to oil palm, which require some rehabilitation or replanting. Further, KWB has up to 450 hectares of additional land suitable for planting, in accordance with environmental guidelines.

Further, MP Evans's other wholly owned subsidiary PT Nusantara Agro Sentosa secured initial land rights over an adjacent parcel of land of 3,600 hectares, known as Long Nah. MP Evans said survey work indicates that around 2,000 hectares can be developed to oil palm there.

"As the group works to rehabilitate, plant, and bring to maturity, the palms at both KWB and Long Nah, the total planted area at the group's Kota Bangun project may expand by more than 3,000 hectares," MP Evans said. "Over time, the total investment in the new areas is expected to be USD20 million to USD25 million, representing a cost per planted hectare of approximately USD7,000 to USD8,000."

MP Evans Chief Executive Matthew Coulson said: "This new hectarage, close to our existing Kota Bangun project in East Kalimantan, provides a further source of long-term production growth. Its location means that crop from the new areas can be processed through the Group's existing mills, supporting our strategy of processing more of our own crop and making efficient use of our milling capacity."

MP Evans shares rose 6.9% to 1,910.00 pence each on Thursday afternoon in London.

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