Malaysia’ KLK to build integrated plant to produce biodiesel components

Kuala Lumpur Kepong Bhd., Malaysia’s third-largest listed palm oil producer, will invest RM706 million (US$230.9 million) to develop the country’s downstream palm oil processing sector, Prime Minister Najib Razak said. KLK’s investment is the latest of the Malaysian government’s Economic Transformation Program projects, which are designed to make its economy more competitive, he said. KLK plans to build an integrated plant to produce methyl ester sulphonate and fatty alcohol, which are key ingredients in biodiesel production. The company will also build facilities to produce fatty ester, used for food production, and high-grade tocotrienols, forms of vitamin E used in health supplements and personal care products. “The government’s support is certainly a major catalyst in promoting Malaysian players to take on a leadership role in driving world-class technology, particularly in palm-based products,” Lee Oi Hian, KLK chief executive said. The company expects to complete all four projects in two to three years. KLK’s plans come after Indonesia, the world’s top palm oil producer, announced a revision to its export tax system on crude palm oil and palm oil products last month, in a bid to boost its refining capacity. Indonesia said it will reduce the maximum export tax on palm oil to 22.5% from 25% now and to 13% from 25% for refined palm products, from Oct. 1., a move that may boost Indonesian refiners’ margins, allowing them to offer lower prices than Malaysia, Dow Jones reported. (September 8, 2011)