Kuala Lumpur, July 15 - Malaysian's top palm oil company Sime Darby will spend 330 million ringgit ($102.5 million) to build a refinery to process crude palm oil, its chief executive said on Tuesday.
The refinery, located in Malaysia's busiest port in central Selangor state, is expected to be completed by mid-2010, Sime Darby Chief Executive Ahmad Zubir Murshid said in a statement.
"The strategic move will enable Sime Darby to have the flexibility to sell our palm oil products according to market demand," said Ahmad Zubir.
The new plant will process 2,000 tonnes of crude palm oil per day, bringing Sime Darby's annual total refining capacity to 1.5 million tonnes in Malaysia.
Soaring global demand for refined palm oil and a strong supply of crude palm oil in peninsula Malaysia made it necessary to construct the refinery, Ahmad Zubir said.
Sime Darby's annual crude oil production is 2.4 million tonnes in Malaysia. In peninsula Malaysia alone, Sime Darby's total production is over 1 million tonnes.
"We also have plans to expand our refining capacity in Indonesia, China, Europe and Africa to match our upstream expansion plans," Ahmad Zubir said but did not elaborate.