THAILAND'S largest energy firm, PTT pcl, plans to sell its palm oil business in Indonesia worth an estimated US$300 million to US$400 million (RM990 million to RM1.3 billion) as part of moves to divest non-core businesses, a senior company official said yesterday.
State-controlled PTT is one of several Thai companies that expanded aggressively in recent years, but which have since scaled back investments because of a slump in Southeast Asian exports in recent months.
PTT slashed this year's budget by 46 per cent and most of its cutbacks involved planned foreign investments.
Charoen Pokphand Foods pcl, Thailand's largest meat and animal feed producer, also cut its five-year investment budget by a third, while Thai Union Frozen Products pcl , the world's largest canned tuna marker, cut investment this year by 17 per cent.
"We are in the process of selling palm plantations in Indonesia," said a PTT official.
"It's a business that needs a lot of attention and is more suitable for locals, while PTT does not have much background in palm plantations," he said.
The deal is likely to attract interest from planters such as Singapore's Wilmar International Ltd and Malaysia's Sime Darby Bhd, a source familiar with the deal said.
PTT, the third-biggest listed oil and gas firm by market value in Asia Pacific, bought stakes in palm oil plantations and processing operations in West Kalimantan in 2008 as part of a plan to expand into green energy businesses.
It set up a wholly-owned unit PTT Green Energy Pte Ltd to buy a 95 per cent stake in PT Mitra Aneka Rezeki for US$14.7 million in 2008.
The Indonesian firm has licences to run about 14,000ha of palm oil plantations in west of Kalimantan Island.
In April 2008, PTT bought a 95 per cent stake in PT Az Zhara, which owns licences to operate about 40,500ha of oil palm plantations and processing facilities in central Kalimantan.
The Thai energy giant also has interest in coal businesses in Indonesia. It withdrew from an investment in Egypt in 2011.
It owns stakes in oil and gas assets in Southeast Asia, Australia, Algeria, Canada and Mozambique. Reuters