Golden Agri eyes boosting oil palm plantations by 20-30,000 hectares this year

But risks are looming.

According to CIMB, one of the key concerns among investors is the slowing growth in new plantings and M&As for the group's upstream division (estates and milling operations) in recent years. 

On top of that, the average age of 13 years for the group's palm oil estates is considered optimal.

Here's more from CIMB:

Golden Agri explained that the slowdown in new plantings was due to tighter new regulations and a slower land compensation process.

It is targeting new plantings of around 10k per ha for this year and hopes to supplement this with M&As at reasonable prices.

Overall, it aims to grow its oil palm plantations by 20k-30k ha in 2014 through organic growth and acquisition.

It said that pricing is one of the key issues faced when negotiating to acquire estates. The group explained that it has around 100k ha of land reserves to support growth and will not be affected by Indonesia’s new ruling to limit plantation companies’ land ownership to 100k ha in the near term.

It also highlighted that it is also expanding into Liberia, Africa through its investments in Verdant Fund which owns around 200k ha of land in Africa, of which only 3k ha are planted. The fund also owns some estates in Indonesia.