Halcyon Agri to acquire 24,327 acres of Malaysian land

Plans to build a natural rubber plantation.

Natural rubber producer Halcyon Agri Corporation Limited (Halcyon Agri) announced that it has signed a term sheet for the acquisition of JFL Agro Pte Ltd, a company holding 24,327 acres of 99-year leasehold Sultanate land in Kelantan, Malaysia. The land, of which an estimated 16,061 acres is cultivable, will be developed as a natural rubber plantation. The purchase price for the acquisition, which is subject to certain adjustments, is approximately MYR130.9 million.

The upstream investment in Malaysia is complementary to Halcyon Agri’s recently announced acquisition of Chip Lam Seng’s natural rubber processing factories in Malaysia. Once the rubber plantation fully matured, it will provide up to 10% of the raw material feedstock for the Malaysia factories. Halcyon Agri’s Executive Chairman and CEO Robert Meyer said: “This move upstream in Malaysia is highly strategic for Halcyon Agri. In addition to capturing the upstream margin, having custody of our raw material will enable us to produce the speciality grades of rubber for which the Chip Lam Seng factories were designed, further enhancing profitability”.

Halcyon Agri, which recently became the first natural rubber processor to publish its sustainability report, intends to develop the natural rubber plantation in line with its sustainability goals. Mr Robert Meyer said: “We take our Corporate and Social Responsibility obligations seriously, including our commitment to sustainability. We intend to explore opportunities to establish the 8,000 acres of non-cultivable land as an eco-haven for key tropical rainforest species”.

The development and management of the plantation will be undertaken by Halcyon Rubber Estates Sdn. Bhd., implementing best practice planting and tapping techniques. The acquisition is subject to the finalisation of detailed terms, customary due diligence, independent land surveys and the execution of definitive documentation(s), and is expected to complete by the end of 2013.