PORT DICKSON: The acquisition of Shell Refining Company Bhd here by a Chinese refinery is a good example of a mutually beneficial bilateral cooperation under the Belt and Road initiative, says China’s ambassador to Malaysia.
Dr Huang Huikang, when visiting the plant here, said the acquisition had given the refinery a new lease on life with China’s investment and technology transfer.
His visit coincided with the very first day the refinery officially used its new name, Hengyuan Refining Company Bhd, after filing the proposed name change with Bursa Malaysia in early February.
“The refinery industry is required to upgrade itself for sustainable development and to fulfil the market needs based on national regulations.
“China’s technology and capital, combined with the existing management team and infrastructure in Malaysia, will give birth to a new refinery industry,” Dr Huang said.
Malaysia Hengyuan International Ltd, ultimately owned by China’s Shandong Hengyuan Petrochemical Co Ltd, completed the purchase of a 51% equity stake in Shell Refining Company for US$66.3mil (RM296mil) in December.
It marks the first overseas merger and acquisition by a provincial-level refinery in China.
Speaking to reporters, Hengyuan managing director and executive director Maarten Stals said staff at the refinery were positive about the change because Hengyuan had not taken over the operations and was not putting in people to take over their positions.
The same management team remains, with the 300 staff and 250 contractors still keeping their jobs.
Stals added that the refinery looked forward to using Hengyuan’s knowledge and experience to develop its projects, as Hengyuan had been meeting the Euro 6 specification for a long time in their home refinery.
Euro refers to a European Union fuel standard to define fuel quality.
“We are currently evaluating the project to use Euro 4 specification for motor vehicle gas, which we anticipate will start to be used in 2018 according to the market requirement,” Stals added.
Later, Dr Huang also visited Kibing Group (M) Sdn Bhd in Seremban, which is a wholly-owned subsidiary of Zhangzhou Kibing Glass Co Ltd with an authorised share of 400 million yuan (RM258mil).
The high-end glass products manufacturer signed an agreement to purchase the asset of Samsung Corning Precision Materials (M) Sdn Bhd on Jan 26, 2015.
Dr Huang said the investment has a long-term positive impact, setting a good role model for win-win cooperation on an equal footing.
Dr Huang is on a nationwide tour to visit projects with Chinese investments and his stops also include Selangor, Malacca, Pahang, Kedah and Johor.
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