KUALA LUMPUR (Sept 03): PPB Group Bhd is unfazed by the possible lower limit on foreign ownership of oil palm plantations in Indonesia, managing director Lim Soon Huat says.
PPB owns an associate 18.3% stake in Singapore-listed Wilmar International Ltd, which in turn, owns plantations in Indonesia. While stressing that PPB is not a plantation group, Lim said the market had "overreacted" to news that Indonesia had proposed to lower the limit on foreign ownership in plantations there to 30%.
This compares to the current maximum of 95%.
"It is not a concern to us. I think the market has overreacted. It has become a hot topic in Malaysia, because major local plantation companies have stakes in plantation land in Indonesia," Lim said at PPB's first-half financial results briefing today.
Lim said PPB would wait for clarity on the draft bill. He said approval would take time, in light of the current political development in Indonesia.
Meanwhile, PPB director Datuk Ong Hung Hock said the group was bullish on wheat prices.
Ong said the bullish stance was underpinned by Ukraine's political tension, as the country is the world's fifth-largest wheat exporter.
Other factors include dry weather in Australia, a near-completed harvest season in Western Europe and lower expected production in Canada, he said.