* Planned Wilmar, Noble Indonesia JV fell apart in July
* Regulatory uncertainty, dwindling land curb Indonesia palm
* Planters increasingly turning to Africa
By Eveline Danubrata
SINGAPORE, Aug 7 Singapore-listed Wilmar
International Ltd is looking to expand its palm oil
plantations in Africa and could start sugar operations in
Myanmar, as its plans to find suitable land in Indonesia hit
The company is eyeing opportunities to grow in Africa and
hopes to give more details in the next six months or so on
starting business in Myanmar, as the Southeast Asian nation
sweeps aside decades of isolation, Chief Executive Kuok Khoon
Hong told reporters on the sidelines of a briefing on Wednesday.
He did not give further details.
Millions of hectares of forest in top producers Indonesia
and Malaysia have been cleared for palm oil plantations, and
planters are increasingly turning to the west coast of Africa as
the industry's next frontier.
The collapse of a planned palm venture between Wilmar and
Noble Group Ltd in the Indonesian region of Papua
after they failed to win regulatory approval marked the latest
setback for plantation firms trying to expand in that country.
Kuok declined to give details on the venture with Noble.
Other firms such as Golden Agri-Resources Ltd are
also finding it more difficult to get new licenses in the shadow
of proposed changes to Indonesian law.
Indonesia has become a top investment destination in
Southeast Asia, but regulatory uncertainty, especially in the
banking and resources sectors, has been a source of concern for
At the start of 2013, Wilmar had around 255,648 hectares of
planted area, with about 73 percent in Indonesia, 23 percent in
East Malaysia and 4 percent in Africa.
Indonesia's plantation sector has been under heavier
scrutiny in the wake of recent forest burning in Sumatra that
caused one of Southeast Asia's worst air-pollution crises,
blanketing neighbouring Singapore and Malaysia with record
levels of smog.
"Given all the news in the press recently about haze in
Indonesia and the burning of forest areas for plantation
purposes, it's easy to imagine that local authorities may be
more reluctant now than they have been in the past to give
permits for palm oil plantations," said Bill Sullivan, a foreign
legal counsel at Indonesian law firm Christian Teo Purwono &
Officials in the world's top palm oil producer are looking
to limit the size of new plantations to 100,000 hectares, but
details are yet to be finalised.
If the law is implemented, big palm oil companies such as
Sime Darby Bhd and Kuala Lumpur Kepong Bhd
may have to intensify their search for land in other markets or
settle for slower earnings growth.
"Companies would like to expand as fast as they can, but
operational challenges are making it more difficult," Richard
Fung, Golden Agri's director of investor relations, said at an
earnings briefing last week.
Golden Agri is one of the world's largest palm plantation
companies with total planted area of 464,600 hectares in
Indonesia extended in May a moratorium on the issuance of
new plantation and timber concessions in primary forests and
peatland. Norway has agreed to provide the country with up to $1
billion in financing to help reduce deforestation.
"The movement for transparency is taking root within the
Indonesian government, where reformers are working to streamline
and strengthen processes for how the government allocates land,"
said Nigel Sizer, director of Global Forest Initiative at the
World Resources Institute.
"It's also happening in the markets, where buyers are
increasingly demanding sustainable and ethically-sourced
(Additional reporting by Michael Taylor and Nadhila Renaldi in
Jakarta; Editing by Joseph Radford)