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August 26, 2011

Singapore group in $1.9 billion Cameroon palm oil deal

Biopalm Energy, a subsidiary of Singapore's Siva group will launch a 900 billion CFA Francs palm oil investment project in the south of Cameroon, an official of the country's agriculture ministry said on August 23.

The 200,000 hectares greenfield project will be jointly developed with the Central African nation's National Investment Corporation, the official said, requesting not to be named.

"The project will cost an estimated 900 billion CFA francs in foreign direct investments," the official said.

He said the mill would increase Cameroon's yearly palm oil production by 80,000 tonnes within the first five years of production, and would add about 30 billion CFA francs to crude-producing nation's yearly revenue.

Neither Siva Group nor Biopalm Energy could be reached for comments, however, Biopalm lists Cameroon and several other African countries including Ghana, Sierra Leone Ivory Coast and DR Congo as places it was in the process of acquiring greenfield land for palm oil production.

The company said on its website that the highly profitable world market for palm oil is projected to exceed 100 million tonnes by 2015.

Cameroon, which has seen its modest oil production decline to about 64,000 barrels per day from 185,000 bpd due to maturing fields, wants to explore other areas for foreign investments.

Its palm oil sector has attracted several industry majors. New York-based agricultural company Herakles Farms plans to develop some 60,000 hectares of oil palm plantations in the country, while Malaysia's Sime Darby is said to be considering a $2.5 billion plantation expansion deal.

Several environmental groups have however, raised concerns that the rapid expansion of agro-industries could not only threaten some of the Cameroon's unspoiled rainforest, but also the livelihood of the local population.

Australian environmental group Rainforest Rescue has launched an online petition aimed at pressuring the Cameroonian government to reconsider Herakles' planned project which they said could destroy plant and animal species, a charge the firm has rejected.

Reuters

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