The company has been working with four foreign companies, to increase average palm oil production to four million tonnes per rai the 2.6 million tonnes most current plantations yield.

Montri Congtrakultien, chief executive and president of the group's crop integration division, said yesterday that if the plan succeeded Thailand's could double its output of palm oil for ethanol.

The four countries that are cooperating in research with Charoen Pokphand Seedling (CPS) are Costa Rica, Singapore, Malaysia, and Indonesia.

Ethanol produced from palm oil is added to petrol or diesel fuel to make gasohol or bio-diesel.

Montri said CP would ask the Agriculture Department for approval to continue developing the project on real plantations.

Separately, CPS yesterday defended itself against allegations by farmers that it had breeched a contract it had signed with the Agriculture Department to distribute rubber seedlings to farmers.

Montri said the company had followed all obligations under the contracts.

CP group currently has a monopoly on the government concession to produce 90 million quality rubber seedlings between 2004 and 2006 for the "one million rubber trees" project aimed at helping farmers increase their incomes. The company was awarded Bt1.4 billion from the government to the supply rubber seedlings to farmers within three years.

The plan is to grow 90 million rubber trees on one million rai of land across the North and Northeast and distribute them to farmers.

But, recently a group of farmers alleged that the company broke the contract with the government by assigning the task to other companies.

However, Montri said the company has performed every process for the rubber planting in accordance with the contra ct. The company has a right to cooperate with its partners for the task of rubber planting.

"CPS still conducts all processes on our own, but only assigns some tasks to our partners such as experts in rubber plantation," he explained.

Petchanet Pratruangkrai,

The Nation