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UPDATE 1-Wilmar and Noble palm joint venture in Indonesia's Papua stalls
July 23, 2013 / 8:33 AM / 4 years ago

UPDATE 1-Wilmar and Noble palm joint venture in Indonesia's Papua stalls

* Wilmar says plan stalled as not approved by authorities

* Palm oil firms face stumbling blocks expanding into Papua

* Region lacks infrastructure, manpower (Adds detail, comment)

SINGAPORE, July 23 (Reuters) - A planned venture between Wilmar International and Noble Group Ltd to develop palm plantations in Indonesia’s Papua region has stalled just months after it was announced as it failed to win approval from authorities.

Palm oil companies have been looking at expanding in so-called frontier markets such as Papua, but face hurdles ranging from regulatory uncertainty and lack of infrastructure to manpower shortages and resistance from locals and environmentalists.

“The Wilmar-Noble JV is off the table as certain relevant merger clearances were not received (before a deadline),” a Wilmar spokeswoman said on Tuesday, without specifying which authorities had failed to give the greenlight.

The venture holds a majority interest in PT Henrison Inti Persada, which owns around 23,000 hectares of land in Papua. Both companies had planned to produce and sell crude palm oil and its by-products.

Analysts said the stymied project was unlikely to have a big impact on the firms’ earnings due to the relatively small size of the land and as the development was still in very early stages.

“This was probably unexpected by the companies, but I think they are still keen to work together and look for other opportunities both in Papua and other markets,” said James Koh, an analyst at Maybank Kim Eng.

Firms that have tried to develop palm plantations in Papua with little success include a unit of Singapore-listed Golden Agri-Resources Ltd, which has 13,355 hectares of palm land there. It has total planted areas of around 464,300 hectares. (Reporting by Rujun Shen, Eveline Danubrata and Michael Taylor; Editing by Joseph Radford)

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