News Straits Times Press, 15 January, 2007

Genting to invest US$3b in Indonesian biofuel plants

GENTING Bhd, the country's leading multinational corporation, plans to invest as much as US$3 billion (RM11 billion) to set up biofuel plants in Indonesia, executives familiar with the matter said.
Business Times was told that the investment will be made via Genting Biofuels Asia Pte Ltd, a company incorporated in Singapore and 100 per cent owned by Gecoun Ltd.

Genting, which owns Malaysia's sole casino licence, has indirect shares in Gecoun, which acquired Genting Biofuels on January 8 this year.

This is the third major foreign investment in two months by the Genting group.

Genting is spending as much as US$3.38 billion (RM12 billion) to invest in a casino-resort in Singapore, while its unit Landmarks Bhd is in the midst of drawing up a plan to invest in Indonesia's Bentan Island.

A senior Genting official, who did not want to be named, confirmed Genting's plans to invest in biofuel production in Indonesia.

The investment comes at a time when Indonesia is on the brink of dislodging Malaysia as the world's biggest producer of palm oil.

Genting's investment in the biofuel industry in Indonesia will be focused near the Papua area.

"Yes, one of the units has signed a cooperation agreement with Papua's Merauke district administration to invest US$3 billion in biofuel production. The investment is expected to be fruitful," said the Genting official.

Meanwhile, it is believed that Multi Vest Corp Bhd, alongside several Indonesian parties, has also signed an agreement to build a US$1 billion (RM3.52 billion) biofuel centre in West Kalimantan, where the company has 100,000ha of plantation land.

Multi Vest executive deputy chairman Datuk K.K. Eswaran was unavailable for comment.

The biofuel cooperation project will be realised in three stages to produce crude palm oil-based biodiesel and sugarcane- and cassava-based bioethanol.

Sugarcane and cassava will be planted in Kalimantan and Papua on a total area of about 1 million hectares.

China's oil major China National Offshore Oil Co has also joined palm oil producer PT SMART Tbk and a Hong Kong energy firm to invest US$5.5 billion (RM19 billion) in producing biofuel in Indonesia, SMART said last Tuesday.

The deal, details of which have yet to be revealed, will rival the scale of Indonesia's biggest liquefied natural gas project and China's top overseas oil investments, potentially giving the two nations a big boost in their efforts to secure alternative fuel sources.