"We will buy a stake in the company (Mata Brait) as it holds the licence to the project in Papua New Guinea. We are now in talks (on the percentage of CCFH stake in Mata Brait)," CCFH CFO Darren Tan Poon Guan told reporters after the signing of a memorandum of understanding (MoU) between CCFH and Mata Brait, here yesterday.
Under the MoU, the two companies will begin work towards a definitive agreement.
Tan said the execution and completion of the agreement is subject to a satisfactory due diligence review by CCFH, negotiation between CCFH and Mata Brait on the terms and conditions of the definitive agreement, regulatory approval, and shareholders' approval if required for the proposed investment.
Mata Brait was appointed as the developer and contractor by Binige Resources Ltd, the owner of the land in Papua New Guinea for the agro-forestry project, which involves clearing the forest for rubber cultivation for a lease period of 99 years.
Mata Brait director Azam Ismail Bakri estimates that the agro-forestry project in Papua New Guinea could potentially generate an aggregate revenue of RM4.55 billion over 20 years.
He expects to begin planting next year, with 1.36 million rubber trees to be cultivated per year over a period of eight years, concurrently as the logs are extracted and harvested in phases.
Azam said the project will be using latex timber clones that are endorsed by the Malaysian Rubber Board and PRIM-Consult Corp.
About 70% of Mata Brait is currently controlled by Malaysian businessman and executive chairman Datuk Tan Siew Heng, who is involved in the timber and rubber businesses through Zhun Ling Enterprise Sdn Bhd, a local timber trader.
The Sun Daily