KUALA LUMPUR (May 10): Astral Asia Bhd is planning to expand its plantation footprint into Sarawak through the acquisition of 35,000 acres (14,164ha) of oil palm estate.

In a bourse filing today, the plantation company said the proposed acquisition will boost its plantation land bank by 357% to about 44,800 acres (18,129.92ha) from 9,800 acres (3,965.92ha) currently.

In view of the land size of the prospective oil palm plantation, Astral Asia said it will have to set up a palm oil mill to process its fresh fruit bunches at a later stage.

"Astral Asia believes the long-term prospects for the oil palm industry remain profitable and the proposed acquisition will enable Astral Asia to continue expanding its core palm oil business in the state of Sarawak," it said.

It did not specify the price tag for the estate, but said the proposed acquisition is expected to contribute positively to its long-term earnings.

The proposed buy also marks the company's first oil palm plantation venture in Sarawak.

Astral Asia's subsidiary Astral Plantation Sdn Bhd has entered into a memorandum of agreement with Sima Properties Holdings Sdn Bhd to acquire Paramount Estate Sdn Bhd, for the purpose of the said acquisition.

Paramount Estate, an investment holding firm, owns 80% of Paramount Pelita Kapit Sdn Bhd, which holds the provisional leases to 13 pieces of land in Sarawak measuring about 35,000 acres (14,164ha).

Currently, some 1,500 acres (607.03ha) of the lands had been planted with oil palms, the filing read.

In a separate filing, Astral Asia announced it had started the construction of the main access road from Bukit Sagu main road to the Kuantan Hi-Tech Park site in March this year.

Kuantan Hi-Tech Park is a 2,433-acre industrial park located in the East Coast Economic Region.

"The group is actively promoting development opportunities with certain business groups and has completed the acquisition of the access road in 2015," it added.

Astral Asia had in 2012 secured a government grant via its wholly-owned subsidiary Tasja Development Sdn Bhd to facilitate the phase one development of the Kuantan Hi-Tech Park.

According to a report then, Tasja had already signed the agreement with the government and Bank Pembangunan Malaysia for a facilitation fund of RM57.5 million for the above purpose.

Tasja was to be the developer of phase one of the park, while Syarikat Ladang LKPP Sdn Bhd (SLLKPP) was to provide land for the development.

SLLKPP is 65%-owned by Astral and 35% by the Pahang state government agency Lembaga Kemajuan Perusahaan Pertanian Negeri Pahang.

Shares in Astral Asia closed two sen or 1.08% higher at RM1.87 today, for a market value of RM220.79 million.