The company will acquire 60 per cent stakes in PT Mentari Subur Abadi, PT Swadaya Bhakti Negaramas and PT Mega Citra Perdana for R125 billion. The three companies own 85,541 hectares of plantation land.

"Indofood long-term objectives for the EOF group are to fulfill all the CPO requirements of the refinery division and to become one of the players in the bio-diesel industry," said director Thomas Tjhie.

"In order to meet these objectives, EOF group needs to increase its plantation area planted with oil palm trees to approximately 250,000 hectares by 2015."

By 2015, total crude palm oil production is projected to reach more than 1 million tons per annum. The demand from its refineries is estimated to be around 600,000-700,000 tonnes.

The edible oils division currently owns a plantation land bank of approximately 138,000 hectares, of which approximately 63,000 hectares are planted with oil palm trees. The output from the plantations can only fulfill 50 per cent of CPO requirement of the refinery division, which produces cooking oil, margarine and shortenings.

The new deal will give the group around 225,000 hectares of plantation areas.

A spokesperson at the firm told news reports that it will issue new shares of its edible oil unit in Singapore in the first quarter of next year to help finance the expansion.