Sime Darby Oils International Ltd (SDO), a wholly-owned subsidiary of Sime Darby Plantation Bhd, says the collaboration with Guangxi Beibu Gulf International Port Group Ltd (BGP) presents an opportunity for its palm oil products to be sold and distributed in major consumer areas in mainland China.
“With the growing demand for palm oil products and the increasing trade volumes between China and Malaysia, we anticipate that this partnership will promote growth of sustainable supply chain and spur greater demand for palm oil in China," said SDO managing director Mohd Haris Mohd Arshad in a statement.
It was reported yesterday that the parties had inked a memorandum of understanding (MoU) worth RM2.5bil to leverage the port and logistics of BGP in the Beibu Gulf Economic Region to establish a shortening trading distribution center in the Qinzhou Free Trade Zone of Guangxi Zhuang Autonomous Region in China.
The partnership would also explore utilizing existing bonded warehouses as a refined palm oil trading and distribution center in the Qinzhou Free Trade Zone and applying to become the delivery warehouse of the Dalian Commodity Exchange.
SDO and BGP also intend to fully utilize the preferential policies under Guangxi Free Trade Zone for the said refined palm oil trading and distribution center.
Both companies are also looking at marketing health products such as tocotrienol and red oil extracted from palm oil into the domestic market of China.
The MoU aspires for a combined target trading volume for shortening and refined palm oil of about 500,000 tons a year.
SDO, the world's largest producer of certified sustainable palm oil, said a successful collaboration with BGP would be another milestone for SDO as it builds its position as the preferred supplier of certified-sustainable, high value palm oil products for the global market.
Under the MoU, both companies intend to collaborate for a period of one year, after which an extension of the collaboration may be considered subject to mutual agreement.