Thai PTT plans to sell palm oil business in Indonesia


* Plans to sell non-core assets after investment cutback

* PTT lacks expertise in palm oil plantations

* Deal likely to draw interest from Wilmar, Sime Darby (Add details on industry, past investments, budget figures)

By Khettiya Jittapong and Pisit Changplayngam

BANGKOK, Sept 11 (Reuters) - Thailand's largest energy firm,PTT Pcl, plans to sell its palm oil business inIndonesia worth an estimated $300-400 million as part of movesto divest non-core businesses, a senior company official said onWednesday.

State-controlled PTT is one of several Thai companies thatexpanded aggressively in recent years, but which have sincescaled back investments because of a slump in Southeast Asianexports in recent months. PTT slashed this year's budget by 46percent and most of its cutbacks involved planned foreigninvestments.

Charoen Pokphand Foods Pcl, Thailand's largest meatand animal feed producer, also cut its five-year investmentbudget by a third, while Thai Union Frozen Products Pcl, the world's largest canned tuna marker, cut investmentthis year by 17 percent.

"We are in the process of selling palm plantations inIndonesia," the PTT official, who declined to be named, toldReuters. "It's a business that needs a lot of attention and ismore suitable for locals, while PTT does not have muchbackground in palm plantations," he said.

The deal is likely to attract interest from planters such asSingapore's Wilmar International Ltd and Malaysia'sSime Darby Bhd, a source familiar with the deal toldReuters.

PTT, the third-biggest listed oil and gas firm by marketvalue in the Asia-Pacific region, bought stakes in palm oilplantations and processing operations in West Kalimantan in 2008as part of a plan to expand into green energy businesses.

It set up a wholly-owned unit PTT Green Energy Pte Ltd tobuy a 95 percent stake in PT Mitra Aneka Rezeki for $14.7million in February 2008. The Indonesian firm has licences torun about 14,000 hectares palm oil plantations in west ofKalimantan Island.

In April 2008, PTT bought a 95 percent stake in PT Az Zhara,which owns licences to operate about 40,500 hectares of palm oilplantations and processing facilities in the central KalimantanIsland.

The Thai energy giant also has interest in coal businessesin Indonesia. It withdrew from an investment in Egypt in 2011.

Through its 66 percent-owned PTT Exploration and ProductionPcl, PTT has interests in oil and gas assets inSoutheast Asia, Australia, Algeria, Canada and Mozambique.

At 0800 GMT, PTT shares were down 1.5 percent,underperforming a 0.3 percent drop of the broad market.

($1 = 32.14 baht)

(Additional reporting by Saeed Ahzar and Anshuman Daga inSINGAPORE; Editing by Matt Driskill)

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