IOI Corp, Malaysia’s second-largest palm oil producer, will invest one billion ringgit ($292.4 million) to boost its refineries to meet strong global demand for palm oil, the New Straits Times reported, citing its chairman.
IOI shareholders yesterday approved the company’s 1.2 billion ringgit rights offer, the bulk of which will be used to expand and upgrade its refineries and specialty fats plants in Malaysia and the Netherlands.
“About 1 billion ringgit will go to expanding our refineries in Pasir Gudang (in the southern Malaysian state of Johor) and Rotterdam,” said IOI’s Executive Chairman Lee Shin Cheng.
IOI, which owns palm oil estates in Malaysia and Indonesia, is hopeful that palm oil prices will rise to between 2,200 ringgit and 2,500 ringgit per tonne in the next few months, he said.
Palm oil prices on Malaysia’s derivatives market have been trading at about 2,000 ringgit to 2,200 ringgit in the past two months.
“Palm oil, being a very affordable vegetable oil, continues to see strong demand. That’s why we’re expanding capacity,” said Lee.
Malaysia is the world’s second-largest palm oil producer after Indonesia.
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