JOINT-VENTURE firm Assar Refinery Services Sdn Bhd will invest between RM60mil and RM70mil to build an integrated palm oil refinery in Senari, Kuching.
Assar Refinery Holdings Sdn Bhd is the majority shareholder in the joint venture. Its strategic partners are the Sarawak Land Consolidation and Rehabilitation Authority (Salcra) and Cargill Holdings (M) Sdn Bhd.
Salcra will be the principal supplier of raw materials to the proposed refinery while US-based Cargill will be the main buyer of the processed products.
The shareholding agreement for Assar Refinery Services and the sale and purchase agreement for the raw materials and finished products were signed by the parties concerned in Kuching yesterday in the presence of the Plantation Industries and Commodities Ministry's parliamentary secretary Ng Lip Yong.
The signatories were Assar Refinery Services directors Syeed Mohd Hussein and Ghazali Ismail, Salcra general manager Vasco Sabat Singkang, Cargill Tropical Oils Asia managing director Richard Tan and Cargill International Trading Pte Ltd managing director Paul Hickman.
The proposed refinery, the first in southern Sarawak and the third in the state, is expected to be completed in 2006, according to Assar group chairman Tan Sri Bujang Nor.
It will have a designed capacity to process 1,000 tonnes of crude palm oil (CPO) and 200 tonnes of palm kernels a day.
Initially, it is expected to process 300,000 tonnes of CPO and 60,000 tonnes of palm kernels a year.
The joint-venture company said the establishment of the refinery was in line with the Sarawak governments drive to promote value-added downstream activities in the palm oil sector.
Sarawak assistant minister of Land Development Francis Harden, who represented deputy chief minister and Salcra chairman Tan Sri Alfred Jabu at the agreement signing, said the refinery would help plantation companies in southern Sarawak to make significant savings in transportation costs.
These companies now send their CPO and palm kernels to Bintulu for processing.
Salcra currently owns 45,000 ha of oil palm plantations and four processing mills. Its aim is to increase its estate holdings to 100,000 ha by 2010.