IJM Plantation Bhd is investing up to RM400 million in the current financial year ending March 31 2012 to double up its plantation business in Indonesia.

The company, with a market capitalisation of over RM2 billion, has between 30,000ha and 40,000ha of oil palm plantation in Kalimantan and Sumatra. Of this, 13,606ha has been planted.

Its chief financial officer and executive director Purushothaman Kumaran said for the next two fiscal years, the company will be investing around RM200 million a year until all the trees are planted.

According to Kumaran, IJM Plantation had invested close to RM400 million in Indonesia since its entry into the market in 2009.

"By 2014, we would have invested around RM1 billion. This includes setting up a 60-tonne oil palm mill, infrastructure and housing," Kumaran said.

"We are expanding the business to have more planted areas in Indonesia. We expect Indonesia to contribute substantially to our earnings from 2014," he said at the company's AGM and EGM yesterday.

IJM Plantation chief executive officer and managing director Joseph Tek Choon Yee said the company is expecting another record year in fiscal 2011 on higher crude palm oil (CPO) price and production,

"Last year, the average CPO price was RM2,770 a tonne and it is today hovering around RM3,000. If the price can sustain throughout the year, we will perform better, barring any unforeseen circumstances," he said.

Tek said the company is expecting the production for fresh fruit bunches to surpass 600,000 tonnes this year, from 575,000 tonnes last year on good weather conditions.

Currently, the company makes money from its 30,000 hectares oil palm plantation in Sabah.

Last year, it posted record net profit of RM147 million on revenues of RM506 million.

"We expect demand for palm oil to increase especially from China and India as the population move to middle class. We hope demand will sustain," he said. - Business Times