Oct 8 - London-listed palm oil producer New Britain Palm Oil Ltd said on Thursday it had signed a five-year deal to supply palm oil to Italy's Ferrero SpA, whose brands include Kinder and Nutella.
New Britain plans to build a new plant on Papua New Guinea to process the oil, which is expected to be ready for operation by the end of 2010, executive director Alan Chaytor told Reuters.
He said that as the firm also has its own plantations, mills and port facilities, it would be able to segregate the palm oil through the whole production process to ensure sustainability standards were met.
"(Ferrero) is committing to a long term purchase and allowing us to build the infrastructure necessary to deliver this in a segregated format," said Chaytor.
While both companies declined to give volume and financial details of the contract, Ferrero said the palm oil it planned to source from New Britain would make up about a quarter of its palm oil requirements.
New Britain, Papua New Guinea's largest oil palm plantation operator, is also building a palm oil processing facility in Liverpool, northwest England, a new plantation near Kimbe, capital of West New Britain in Papua New Guinea, and new methane capture ponds.
Ferrero and New Britain are members of the Roundtable on Sustainable Palm Oil (RSPO), which was created in 2004 to develop an ethical certification system including commitments to preserve rainforests and wildlife.
Critics of the scheme say global supply chain complexities mean that non-certified oils are often blended in with certified products, a problem that Chaytor said would be avoided in this agreement with Ferrero.