KUALA TERENGGANU: TDM Bhd’s wholly-owned Kumpulan Ladang-Ladang Terengganu (KLLT) has entered into four conditional lease agreements with the Terengganu State Economic Development Corporation (PMINT) for the renewal and formalisation of lease for 10,222 hectares and 2,772 hectares in the state respectively.
The renewal of lease for 10,222 hectares of land is for a second term of 46 years, while the leases being formalised 2,772 hectares are for a lease period of between 30 and 99 years. The lease periods can be extended for a further between 92 and 99 years.
Collectively, the lands make up 12,994 hectares, which is 29 per cent of TDM’s total palm oil plantation land bank of 45,196 hectares.
TDM group managing director Datuk Mohamat Bin Muda said after the signing of the agreements yesterday that these estates have been a major contributor to the group’s earnings.
“With the agreements, we are able to continue cultivating oil palm on these lands, which provides long-term clarity and earnings visibility to the group. We have invested heavily in the development of the oil palm plantation on the collective lands and would like to continue to reap the financial benefits from our investments.”
With the renewal and formalisation of the lease agreements, TDM will pay a higher annual rental to PMINT which amounts to RM4.9 million from the current annual rental of RM429, 965.
TDM initially gained access to the lands with the acquisition of KLLT in 1997 as KLLT held the leases to clear and develop the lands for oil palm plantation. To date, KLLT still continues to manage the oil palm plantations on the lands.
In line with TDM’s domestic plantation expansion plans, Mohamat said the lease agreements further strengthens the group’s commitment to champion the plantation sector in Terengganu.
Earlier this month, TDM had accepted a land grant of 4,515 hectares from the Terengganu state government, which will see its land bank in Terengganu increase to 36,363 hectares.
The lease agreements are subject to the approval of TDM shareholders at an extraordinary general meeting to be convened.