Sime Darby Boosts Palm Oil Refining Capacity in Malaysia and Europe

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Researched by Industrial Info Resources (Sugar Land, Texas)--The industrial conglomerate Sime Darby Berhad (KUL:SIME) (Kuala Lumpur), Malaysia's largest company by capitalization, is boosting its position in the downstream palm oil business with the construction of a $103 million palm oil refinery in North Point, Port Klang. The plant is scheduled for completion by mid-2010. The company, which now straddles the edible oils and biodiesel sectors, is responding to a global increase in demand for refined palm oil products.

The plant will process about 2,000 tons of crude palm oil per day. A kernel-crushing plant with storage tank facilities will add about 660,000 tons per year to the plant's capacity. In total, the company has 140 oil palm estates in Malaysia with an area of 329,470 hectares and 42 palm oil mills with an average processing capacity of 49,870 tons per day. The company has a total of 524,626 hectares of plantations when including its Indonesian plantations.

The new plant will bring Sime Darby's total refining capacity in Malaysia to about 1.5 million tons per year, which is more in line with annual production of crude palm oil of more than 1 million tons per year for the production of edible and biofuel oils. The company's total crude palm oil capacity is 2.4 million tons per year.

The group's biodiesel production capacity was established in 2007 with its merger with the Golden Hope Group, whose Banting plant came into operation in 2006, followed by the Carey Island plant in 2007. The latter uses Malaysian Palm Oil Board technology. These were followed in 2008 by biodiesel plants at Bintulu, Sarawak and Unimills in the Netherlands.

The 200,000-ton-per-year biodiesel plant in Zwijnderecht, The Netherlands, was commissioned in April 2008 and is equipped with state-of-the-art equipment that enables it to process rape seed oil, soya bean and palm oil feedstock and to produce blends of biodiesel using the range of feedstocks. The company has invested $53 million in Zwijnderecht and other locations in Europe to strengthen its position in the oils and fats downstream business in Europe. Unimills is a technology and market leader in margarine hardstocks in Europe.

Developments include a 10,000-ton tank yard, an innovation center with a new laboratory and pilot plant facilities and an enzymatic arrangement plant with a capacity of 100,000 tons per year. There are plans for new palm oil processing factories to be set up in Europe, including a new refinery and bulking facilities to complement the existing plant in The Netherlands.

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