14 SEPTEMBER 2012 (Business Times) - United Plantations Bhd and Oleon, Europe's largest oleochemical producer, are to begin construction of a RM96.33 million oleo-derivatives production plant in the first quarter of next year.
Oleon Sdn Bhd managing director James De Caluwe said the plant at the Selangor Halal Hub is expected to be completed by the third quarter of 2015.
The first year will see an annual production of 15,000 tonnes.
"By the second year, we will add another 10,000 tonnes," he said after the announcement of seven key investments under the Economic Transformation Programme's National Key Economic Areas by Prime Minister Datuk Seri Najib Razak here yesterday.
Caluwe said the bulk of the plant's products will be for the export market, where demand has been strong, a trend that is expected to continue in the years to come.
"Using the latest technologies and processes, the UniOleon plant will be able to produce high-value derivatives used in food appliances, a sector with strong growth," Najib said in his speech.
By 2020, the plant is expected to have a gross national income impact of RM30.69 million.
United Plantations executive director Datuk Carl Bek Nielsen said the long-term impact will be on the image of Malaysia as a sustainable palm oil producer.
As it is now, the group's plantations have all met the criteria of the Roundtable on Sustainable Palm Oil.
"This project goes all the way down the value chain of palm oil, opening up new possibilities into the food segment."
"It involves knowledge transfer to Malaysia in an area previously untapped by Malaysian palm oil growers and strengthens the image of Malaysia as a sustainable palm oil producer," said Nielsen.
He added that by 2015, top food producers like Nestle and Kraft will use only sustainable products and Malaysia will be able to meet their requirements.
On palm oil prices, Nielsen said the price movement will depend a lot on issues such as world demand.
"But I do not see a drop in the demand for vegetable oil and Malaysia and Indonesia currently supply 72 per cent of this demand," he said.
He added that the price of palm oil will not affect its investment as "our business is long term and Oleon can definitely provide us with that value".
Oleon, headquartered in Belgium, is an international oleo chemical company with manufacturing locations there, Germany and Norway.
It has sales offices in Europe, Asia and North America.