Sime Darby Plantation to collaborate with China’s COFCO on palm oil ventures

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KUALA LUMPUR (Aug 21): Sime Darby Plantation Bhd (SD Plantation) has signed a memorandum of understanding (MoU) with COFCO Group Co. Ltd (COFCO) to collaborate on a number of palm oil related ventures.

The MoU includes a joint research on the health benefits of palm oil, developing capabilities to manufacture specialty oils and fats, and establishing joint sales and marketing activities to promote high value differentiated palm products in China.

“Through these initiatives, both SDP (SD Plantation) and COFCO hope to create greater demand for certified sustainable palm oil and increase trade volumes between the two companies,” SD Plantation said in a statement today.

The MoU signing was held at the China World Summit Wing in Beijing, and was witnessed by Malaysian Prime Minister Tun Dr Mahathir Mohamad, who was in China for a five-day official visit.

“Sime Darby Plantation is excited with the prospect of a close collaboration with COFCO, a leading agriproduct merchandiser and food production company in China. This memorandum of understanding truly reflects our aspiration to be the leader in promoting the health benefits of palm oil and to produce certified-sustainable, high value palm oil products for the global market,” Tan Sri Datuk Seri Mohd Bakke Salleh, SD Plantation’s executive deputy chairman & managing director said.

Under the terms of the MoU, SDP and COFCO will conduct further research on the health benefits of products like palm tocotrienol, red palm olein, and palm kernel oil. In addition, both companies intend to develop specialty products such as premium shortening and bakery fats for the Chinese market, and to explore possibilities to co-manufacture these healthy oils and specialty fats in Malaysia.

Mohd Bakke also added that China is a key market for Malaysian palm oil and that the group’s cooperation with COFCO is viewed as a significant milestone in enhancing the commercial relationships of both countries.

As of writing, SD Plantation’s share price was up 4 sen or 0.77% to RM5.21 with about 1.47 million shares traded, giving it a market capitalisation of RM35.3 billion.